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Sixth Street plans could create cushion for new incubator music venues

Monday, May 23, 2022 by Chad Swiatecki

While new mega-capacity venues such as the Moody Center (capacity 15,000) or the Moody Amphitheater (5,000) attract high-ticket tours from established performers, the smaller clubs that can hold 300 people or less are often the most threatened by the city’s hot real estate market as rising rents clash with profit margins that typically top out at 4 percent. And in a city that advertises itself as a hotbed for incubating new artists, those small, vulnerable spaces are the ones most needed to preserve the city’s creative cultural fabric.

As the plans for Dallas-based Stream Realty Partners to reimagine the city’s Sixth Street entertainment district come into public focus, its messaging around making creative spaces a priority in its plans could lead to more of those incubator-style clubs returning to the district that years ago was an epicenter for the city’s music scene.

Cody Cowan, executive director of the Red River Cultural District, which contains the city’s greatest concentration of music venues, said the company’s timing is advantageous given the need city leaders have recognized in preserving and fostering creative spaces.

“One of the most important places in the music community are those rooms that are 300 capacity or less because those are the places that are discovery spaces, where bands can strike out on their own and we can get a new Black Pumas. They’re the ones that are going to be the most essential in the coming years,” he said.

“Large venues are spoken for because it’s part of a business plan that isn’t local, it’s global. The 200- and 300-cap room is not somewhere you’re going to see Bob Dylan or Kacey Musgraves perform … you’ve gotta have the places for talent that is unknown to cut its teeth. Those are the spaces that create the things people see as funky or cool about the culture as a whole.”

Thus far representatives from Stream have said that they need the city to raise the 45-foot height limits on properties they hope to redevelop, with the north side of the street between Neches and Sabine representing its most concentrated stretch of the more than 30 properties purchased over the past three years.

Caitlyn Ryan, Stream’s senior vice president and head of its Austin office, said the company’s main priority is reducing the concentration of single-serving “shot” bars throughout the district and bringing in more restaurants, live music venues and arts spaces that can attract a more diverse customer base throughout the day and night. Ground-floor arts spaces underneath office and hotel uses are a common touchstone for the company in its presentations.

“Sixth Street doesn’t have a bar problem; it has a ratio problem,” Ryan said. “Now it’s just 90 percent bars and only 10 percent restaurants. If we can even that out to add some more restaurants down there, and some more live music concepts, some more reasons for people to show up there on Monday through Friday or anywhere else during the day … that’ll be what we consider successful.”

A code amendment to lift the building heights would be the first step the city could take for Stream’s plans to move forward, with the extra height adding more occupancy revenue to pay for redevelopment costs.

Matt Kwatinetz, managing partner for Q Partners, a consulting firm that has advised cities including Austin on redevelopment projects involving creative spaces, said Austin’s recently created cultural trust could become an ownership partner in some of Stream’s projects, using public dollars to preserve ground-floor space for creative use and give below-market rental rates to carefully vetted operators.

Other possible tools include creating an overlay district for Sixth Street and the Red River Cultural District that sets parameters including incentives for including creative spaces in new projects. The city could also use its economic development corporation to make low-interest bonds available to developers, giving them lower borrowing costs in exchange for the public benefit of creating deed-restricted allowances for creative spaces.

“It’s really important for somebody, whether it’s a nonprofit or the city or someone like the cultural trust, to create the ability for the market to do its thing in those parameters that preserve those cultural spaces. Someone has to defend and preserve them, and the advantage is the increased value that gets created on the other stuff because we know the draw of tourists and visitors creates other revenue. There needs to be protection for the businesses creating that other revenue,” Kwatinetz said. “It’s very hard to sustain a music scene with one venue. You need a cluster, and the city and property owners are advantaged by doing the right thing to preserve those clusters.”

Photo by vxla, CC BY 2.0, via Wikimedia Commons.

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