Real Estate

After months of complaints, Enzo night club is being sued by the Monarch apartments.  This is not surprising, but the suit could be unfounded if Enzo has been operating in compliance with existing laws.  According the article, city police and fire officials believe they have been.  Behind the scenes, various advocacy groups are discussing the bigger question: are existing compatibility laws failing a mixed-use downtown?

Outside of the established entertainment districts of E 6th Street and the Warehouse District, there’s unrest brewing between downtown residents and night clubs.  These two groups evolved in the same playground over the past decade.  Now, both seem uncertain about the rules and who’s playing by them.

Can’t we all just get along?

One of my favorite books is Freakonomics – a book that challenges our core economic motivations.  I’m a perfect example of irrationality.  I am a downtown property owner.  I believe that scarcity creates value.  Using purely economic instinct, I should support the anti-height and anti-density sentiment we’re used to seeing from ANC, since the expected result would be less real estate for my properties to compete with.  However, I have qualitative interests that go beyond simple economics.  So, I do support height and density initiatives designed to create more housing in downtown.

In similar fashion, a club owner might want to limit the creation of new bars in downtown Austin in order to preserve their existing fiefdoms.  Why desire more competition, right?  I know many bar owners, but I’ve never once heard them say “there’s too many bars”.  It makes sense, as they don’t want to be blocked from opening future concepts/locations.

There’s also the argument for economies of agglomeration, which helps to explain why destination entertainment districts thrive.

Responding to exogenous forces

Remember when the City of Austin banned smoking inside bars?  If you do, you might recall the uproar from bar owners suggesting that would kill their business.  In the long run, bars adapted.  The response was to take business outdoors to rooftop decks and open air lounges.  This phenomenon paralleled the residential boom in downtown, and created new Outdoor Music Venue challenges for lawmakers (to be discussed in another article).  Look around.  Now, there are more bars than ever in downtown Austin.

Another reason for the surge of bar development: parking.  CBD bars don’t need onsite or adjacent parking.  By requirement of the law and/or lender, onsite parking isn’t as important to a bar’s success than it is for retail and restaurant uses.  So, it’s no surprise we’re see more bars.  They’re simply easier to build, finish out, and operate.  CBD zoning enables this.

Still tippin’

According to the Texas Bar Nightclub Alliance (TBNA) there are more alcohol retailers in downtown Austin’s 78701 zipcode than any other zip code in the United States!

I went to the TABC and pulled all of the permits in 78701, and found approximately 290 permits.

Big whoop, Jude.  What’s your point?

At what point are there so many night clubs that they collectively begin to erode the quality-of-life for residents and visitors of downtown?  I think the answer has to do with compatibility, more than raw numbers.

Have you seen the vision for Congress Ave?  It’s mixed-use. These pics from the holiday stroll should help you visualize it.  Downtown Austin is more than just bar-centric nightlife.  Night clubs outside of the established entertainment districts (E 6th & Warehouse) need to play nice with their neighbors.  And residents need to support the ones that do!

I support the Downtown Austin Plan’s recommendation for conditional use permits for new downtown Austin night clubs outside the entertainment districts.  It’s a softball pitch for stakeholders to foul out the bad players.

Jude, stop being lame.

Meh, get off my proverbial lawn.  Few new night clubs add to our city’s brand and goodwill.  IMO, we’re at the tipping point of problematic “bar creep” outside of the entertainment districts and into areas envisioned for more mixed-use.

Maybe I’m growing up, and through the course of business I see more families in downtown Austin than ever before.  I see, in aggregate, the billions of dollars homeowners have invested in their downtown residences.

Unlike E. 6th Street (aka. “dirty 6th”), W. 6th Street was not a major destination until there were 1,500+ high rise doors and $500,000,000 in residential multi-family/condo property tax base surrounded it.  Rainey Street wasn’t a destination until 1,000+ high rise doors and $250,000,000 in residential multi-family/condo property tax base surrounded it.

Entertainment “districts” are a piece of the Downtown Austin CBD pie.  Not the whole pie.

-Jude