By Kathryn Hardison and Paul Thompson – Austin Business Journal
Music venues are set to receive $15 billion in long-sought relief from the federal government, but they will have to share the funds with other struggling industries.
Congress on Dec. 21 passed a new $900 billion stimulus package that includes $15 billion in grant funding for entertainment venues, theaters, museums and zoos. Funds will be available for expenses including payroll, rent, utilities, mortgage obligations and personal protective equipment, among other needs. The deal also includes new small business relief and re-ups the PPP loan program with $284 billion in fresh funding. The stimulus package is now awaiting the signature of President Trump.
Austin’s music industry has been waiting for additional federal support since a bipartisan measure sponsored by Texas Sen. John Cornyn and Minnesota Sen. Amy Klobuchar — the $10 billion Save Our Stages Act — was introduced over the summer. But Austin’s lauded music industry hung in the balance amidst partisan gridlock in Washington, forcing venues such as Barracuda, Scratchouse and Plush to shutter.
Just days before the stimulus bill was approved, Austin-based concert promoter Margin Walker filed for bankruptcy and announced it was shutting down.
Cody Cowan, executive director of the Red River Cultural District, said that even with other industries tacked on to the relief bill, it’s an important step to save the music industry.
“It’s really exciting to be able to have this runway again,” Cowan said. “Even with the vaccine, we’re probably not going to see the industry come online until the end of next year, so you can see the value of this relief … it really is the bridge from now to then.”
Count local movie theaters among the businesses also on the brink of disaster before the $900 billion stimulus package was announced. Round Rock-based Flix Brewhouse, a chain with nine locations known for serving food and beer that it brews, announced in November that it would close “until further notice” with revenues down substantially and limited content with which to draw customers to its screens.
The prospect of a new stimulus deal was about the only thing keeping Flix Brewhouse from filing for bankruptcy, said CEO Allan Reagan.
“There’s a lot of pain when you can’t pay your bills,” Reagan said. “When revenues are down 90% year-over-year, that’s got bankruptcy written all over it.”
Reagan credited Sen. Cornyn, along with Texas 31st District Representative John R. Carter, for helping ensure movie theaters were part of the $15 billion package.
“Texas’ historic and world-class entertainment venues were some of the first businesses to close, and many remain shuttered nine months later,”Cornyn said in a Dec. 22 statement. “I’m proud to have led the charge in the Senate to ensure they have the resources to overcome lost revenue and mounting bills, and I urge the President to quickly sign this into law so Texans can enjoy their favorite artists at dance halls and live music venues for years to come.”
Reagan expects the $15 billion in funding to offer a shot in the arm for the flagging movie industry. However, even with a vaccine making the rounds there’s no expectation the industry’s fortunes will change overnight. Reagan still has painful memories from Flix’s efforts to re-open in September and October, and vows to take a conservative approach toward re-opening this time around.
“What I’ve learned in the last 10 months is that the coronavirus calls the shots, not individual human beings,” Reagan said.
Flix Brewhouse doesn’t expect movie theaters to become an economically viable business again until mid-summer, Reagan said. But even with that conservative estimate, Reagan offered one major caveat:
“I’ve got a perfect record of forecasting the coronavirus, in that I’ve never been right,” he said.
The city of Austin also offering relief
Programs launched by the city have been instrumental in keeping music venues around to see the federal money show up.
This summer, the city of Austin provided dozens of live music venues with grants totaling roughly $861,000 as part of its Covid-19 recovery effort through the Creative Space Disaster Relief program and the Small Business Relief Grant. There was also a $1.5 million program to give emergency dollars to musicians, among other Covid-19 relief efforts.
The latest lifeline has been the $5 million Live Music Venue Preservation Fund under the city’s Save Austin’s Vital Economic Sectors Act. Applications opened Dec. 11 for the grant program, which is a two-phase process. Applicants facing immediate risk of closure can access a $20,000 grant in the first phase, and eligible applicants can receive up to $140,000 in grant funding in phase two. Grant recipients must complete program requirements, including consulting with legal, accounting or real estate professionals.
By 4 p.m. on Dec. 21, 84 applications were submitted for phase one of the grant program, said Veronica Samo, spokesperson for the city’s economic development department. No funds have been dispersed yet, but Veronica Briseño, Austin’s Chief Economic Recovery Officer, told Austin Business Journal in November that she hoped to have some money to music venue owners by the end of the year.
Some music venues will be able to tap into the city’s Legacy Business Relief Grant, though details about that program were not available on the city’s website by press time.
Cowan said that the culmination of the city’s various programs have been able to keep more industry players afloat than he first imagined, noting the impact has still been significant. He expected closer to 40% of businesses in the Red River Cultural District to close by October, and by press time, he said the numbers were closer to 25%, with nearly 10 venues, bars or restaurants shuttered in the area.
“It sounds like they really took our call to action seriously to provide a Christmas present to the music industry,” Cowan said of the city. “If we get these dollars out, that allows us to make it to the the Save Our Stages (money), then we have a chance of retaining that workforce and re-employing people the fall of next year and beyond.
“It looks like we have a hard fight until next fall. I don’t think we should just assume that everyone’s going to stay in business, but I’d like to think that 80% to 90% of people are going to be able to access that money and stay.”
