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Council authorizes 30-year lease extension for Austin Studios

Friday, June 19, 2009 by Jacob Cottingham

City Council voted 6-0 Thursday to reauthorize the lease of 20 acres at the Mueller development to the Austin Film Society for 30 more years. Council Member Randi Shade amended the resolution to provide enhanced oversight of any subleasing deals that AFS may enact. The property houses Austin Studios and has been managed by AFS since 2000. The 30-year lease will begin Dec 31, 2012.


There was a sense of urgency to the proceeding because AFS is in negotiations for a sublease of some studio space with Soundcheck, a Nashville-based company. AFS pays the city $100 a year for the lease and manages all the tenants at the studios. The organization will use the proceeds to operate and maintain the premises, and will submit an annual report and budget to city council.


Rebecca Campbell, Director of AFS, told In Fact Daily that “after four years negotiating the lease, we wanted to make sure the city manager now had the authority to finalize and execute it so we could keep our business in order.”


A number of citizens in the entertainment industry spoke to council about their concerns with subleasing space to Soundcheck. While most speakers encouraged the idea of an extended master lease for Austin Studios, they urged council to approve negotiations without execution. Mark Hays, who works at Music Lab, told council that “our concern is that there’s going to be favorite status given to an out-of-state company to directly compete with companies that already exist in Austin — if there’s not more discussion made of the sublease agreements on this.”


Shade recognized the importance of extending the lease on Thursday. “You can’t engage in negotiations with a lease agreement if you don’t have a lease past three years.” She said it was her understanding that the Soundcheck sublease would be for a five-year span. AFS has a meeting scheduled for June 25 to discuss the potential deal with the public. 


If a sublease would provoke improvements to a studio of $50,000 or more, AFS must now go before staff to get approval. Shade made an amendment to put that decision in front of council, rather than staff. The amendment passed with Council Member Sheryl Cole off the dais.


Mayor-elect Lee Leffingwell wanted to know if there is a local hiring component to the current leases. Campbell told him “that tends to take care of itself at the state level,” referring to grant money offered by the state government. Leffingwell noted that NBC’s Friday Night Lights has a local hiring agreement. “The fact of the matter is, the city of Austin is subsidizing the Austin Film Society… normally when we do a subsidy a local hiring component is a requirement, so I think that’s something we should pursue,” he said. The crowd applauded.


Mayor Pro Tem Brewster McCracken compared film crews to tourists, saying they come to the state, spend money and don’t use many of the city’s services. “Traditionally, that’s been viewed as one of the benefits,” he said.


Campbell told In Fact Daily the decision left the local hiring component a bit vague. “I think their intent is clear to look into encouraging local hiring, but the details of that have to be hashed out. Hopefully we’ll have that ready at the July 23 meeting.”


She said the challenge is “to craft it in such a way so that it encourages local hiring without tying the hands of those who need to come here and shoot.” She said there are a variety of ways to measure the local impact, whether through payroll, number of people hired or other mechanisms.

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