Almost a year and a half ago, Austin Mayor Steve Adler announced plans for a crowdsourced investment fund to save live music venues. Locals, he said, could buy into and preserve favorite venues that might be knocked down as development and rental rates increase.
But progress on the idea has been slow, as the city struggles with exactly how that might work.
“Conversations are getting more and more serious, but there are still some questions, structurally,” Adler said Friday. “The challenges are everywhere because no one’s ever done this before.”
The vision is to use mini-bonds to supply a $10 million fund, backed by both philanthropic and investor money at low interest rates, to help iconic venues stay afloat. But the city still needs to figure out how to structure the fund so that crowdsourced and philanthropic money would guarantee the bonds, Adler said.
In 2016, the city won a Neighborly Bonds Challenge, a national program that evaluated innovative proposals for investment in local projects from public agencies. The program awarded the city $100,000 of legal, administrative and marketing services to make the program happen.
Since then, Neighborly has been working with the city staff to get an idea in place. Last year, the program worked with cities in Vermont, Kansas and Massachusetts to use mini-bonds to build a school and bike paths and to purchase a new firetruck, said Pitichoke Chulapamornsri, Neighborly’s director of business development. But it has never tried anything with music venues.
“It’s going to be a relatively new structure for the bonds, so we are excited to continue to work with the city on that,” Chulapamornsri said.
In November, Austin requested a year extension of its deadline to issue the bonds by the end of 2017. The goal is now to issue them this year — or at least have a clear game plan, Chulapamornsri said.
Emails exchanged between staff members in the mayor’s office a year ago said the goals remained to set up a nonprofit and identify key donors, create a process to define and vet iconic venues, meet with investors, and work with the city finance staff. It’s unclear whether any of those things has happened. Frank Rodriguez, the mayor’s aide who was handling the project, left the office in October.
The mini-bond program was considered an early step in a Music and Creative Ecosystem Omnibus plan Adler began promoting in 2016 to develop ideas to save local music venues. A 2015 music census said Austin was nearing a tipping point as the “Live Music Capital,” with musicians and venue owners struggling to stay afloat in a city quickly becoming more expensive.
Music venue owners said they remain hopeful about the prospect of the investment fund but are not holding their breath.
“Of course we would like to see it happen, it just seems like there is an awful lot of talking and not much doing (at) City Hall,” Stephen Sternschein, owner of Empire Control Room, said in an email.