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Economic Development Department outlines plans for $12M creative space bond, creation of Austin EDC

Monday, September 14, 2020 by Savana Dunning

The Economic Development Department outlined its plan for a $12 million creative space bond and a city-owned economic development corporation that could help it along at a joint meeting of the arts and music commissions Friday.

The city launched a request for information on Aug. 27 as the first step in an effort to create city-owned creative spaces through the $12 million bond approved by Austin voters in 2018. EDD’s Redevelopment Division Manager Christine Maguire explained to the commissioners that the request was designed to promote the bond project and solicit ideas from creative sector groups. The RFI is an optional part of the application process, and is the precursor for the official request for qualifications to creative space operators. The deadline  to participate in the RFI is Sept. 21.

Maguire said the plan is for the project to be city-owned but not city-operated, to mitigate the funding limitations of a fully bond-funded project. While the department plans to negotiate the purchase/lease agreement with any property owner of the potential site, it will solicit a third-party operator to manage the creative space and another to construct and design the space.

Several representatives from local creative sector organizations spoke at the joint commission meeting, several proposing their organizations to be considered for the bond, including Austin Texas Musicians, EQ Austin and the Austin Tejano Music Coalition. Dan Redman, founder of the Mosaic Sound Collective, which offers space and resources to local artists, said that the true metric for the bond’s success should be how it supports existing organizations.

“If our proposal for Mosaic is approved, it will allow us to expand our space, fund our programming and support more creatives, nonprofits, and support future creatives through our collaboration with other organizations,” Redman said. “I believe the true metric of success for this bond is in supporting existing organizations that are already serving the community, plus supporting musicians, artists and the community.”

Arts Commissioner Bears Rebecca Fonte requested clarification on whether the city plans to fund an already established organization, acquire an established creative space or develop a new space altogether. Although the bond is not meant to fund established organizations, Arts Commissioner Maria Luisa “Lulu” Flores asked that the commissions not discourage established organizations from submitting operation proposals.

As the operator search is being conducted, the city will solicit a broker to search for potential sites for the creative space. Maguire said the Economic Development Department’s working group will focus on locations that had seen significant displacement even before the Covid-19 pandemic. Once the candidate pool is narrowed down, the city will privately share the potential site ideas with the candidates, under a nondisclosure agreement, for them to create proposals for building amenities and site improvements. The winning proposal will be awarded a contract to manage the property while the city negotiates either a purchasing or lease agreement with the property owner and manages the design and building process through another third-party partner.

Proposals will need to fulfill certain city requirements for the space, following the recommendations of the arts and music commissions. After the bond was approved by voters in 2019, the two commissions submitted recommendations for the creative space, with requirements for diversity and inclusion, outreach and amenities.

The commissioners also listened to a proposal for an economic development corporation to manage city real estate deals that some City Council members argue could aid in city projects to rescue art spaces and house the homeless.

Consultant Matthew Kwatinetz told the commissions that an EDC could aid the bond project efforts through a cultural trust and leverage the $12 million bond into $100 million while saving the city in brokerage fees for the site.

Many commissioners noted that $12 million was a very small sum for the city to work with. Arts Commission Chair Jaime Castillo asked Kwatinetz if leveraging the bond for additional funds is legal, considering all the restrictions surrounding the use of publicly approved bond money. EDD Deputy Director Sylnovia Holt-Rabb clarified that the idea to leverage the bond money is on the back burner while the Law Department reviews the concept.

City Council already has plans to address regulatory and incorporation documents later this month. In the meantime, Mayor Steve Adler and Council members Jimmy Flannigan, Leslie Pool and Kathie Tovo are bringing a resolution to the next Council meeting, called Save Austin’s Vital Economic Sectors (SAVES), directing the city manager to explore private and public funding options to support at-risk live music and arts venues, restaurants, bars and child care services.

On Council’s discussion forum, Council members Alison Alter, Ann Kitchen and Paige Ellis also asked to co-sponsor the resolution. Alter mentioned the incoming assistance in child care subsidies that’s already in the works, as well as adding a request that the city manager draw insights from the city’s Economic Advisory Panels and mine Covid-19 relief grant application data, such as those for the Creative Space Disaster Relief Fund, which closed in June.

Arts Commissioner Rick Van Dyke asked whether the $12 million bond could be used as rent assistance for musicians and artists, to which Holt-Rabb replied that the legal limits of the bond would not allow that. However, Holt-Rabb said the 2021 budget has some money earmarked for financial assistance for existing creative spaces.

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