- The Washington Times - Sunday, November 9, 2003

AUSTIN, Texas - This college town known for its music and laid-back lifestyle is trying to develop a more business-friendly environment. Mired in a sluggish economy and facing budget deficits, the city’s mind-set has shifted as local leaders pine for economic success.

“At some point, Austin will come to terms with itself,” said Austin demographer Ryan Robinson. “If we can’t create jobs of some sort, that quality of life becomes much more of a muted element.”

The business and conservative faction has grown more vocal, although the state capital remains primarily liberal, analysts say. The two camps — conservatism typified by developers and liberalism personified by environ-mentalists — generally are accepting of each other’s objectives.

Even so, Austin’s population of about 670,000 is struggling with various aspects of economic development, while clinging to its quixotic personality.

A major concern is tax incentives for mixed-use projects throughout the city, not just in the core business district. Other thorny issues include an effort to support local retailers and shun chain stores, and a reversal of a no-smoking ordinance at bars and music nightclubs.

The growing pains come as Austin — like other cities across the country — faces a budget shortfall, creating fears about cuts in public services.

“[Austin] was a slacker’s haven,” said Jesse Sublett, 49, a rock musician and mystery novelist who has lived here since 1974, except for a few years spent in Los Angeles. “It’s still more so than most other places, but it’s definitely more serious.”

In a city where development, in effect, is restricted over parts of an aquifer in southwest Austin, politicians have encouraged builders to look elsewhere.

“The idea was to steer growth where it made the most sense both environmentally and financially,” said City Council member Daryl Slusher.

“Smart growth” policies developed in 1997 spurred several projects in the ailing downtown, but also backfired. Intel Corp. more than two years ago abandoned a site after the government waived millions of dollars in fees. Austin officials declared its “smart growth” system dead in June, after a new administration took office, but recently granted sales-tax rebates to a local developer for a proposed $130 million retail and apartment project in north Austin.

Endeavor Real Estate Group’s Kirk Rudy touts 1,100 permanent jobs for the planned complex and a “risk-free” deal. The city would reimburse the company a quarter of its property-tax payments over 20 years if the project meets certain benchmarks.

“It’s not going to happen without a public investment,” he said.

Another issue is a disdain for corporate America.

Local retailers near a planned outdoor shopping village in the central city rallied against incentives for Borders Books & Music. The chain pulled out a few months ago as a result.

The effort was led by a grass-roots organization called Liveable City, which co-opted the ubiquitous city slogan, “Keep Austin Weird,” to “Keep Austin Weird: Support Your Local Businesses.”

The campaign — its tag line reinforced with bumper stickers — implores Austin residents to patronize homegrown businesses instead of national outlets.

Steve Bercu, the owner of Book People, said sales at local stores flow more directly into Austin’s economy through wages and back-office functions. Maintaining individuality is key, he said. “We, like everybody, want our place to be unique.”

Austin, founded in 1839, was admired for its idyllic location on the banks of the Colorado River. Home to state government and the flagship campus of the University of Texas, the city long sought “clean industry” that produced little pollution and steady employment.

Locals, intent on preserving the town’s relaxed lifestyle, historically have resisted expansion. In the 1970s, many were content to work at low-paying jobs and enjoy the city’s culture and cheap Mexican food. The music scene was vibrant and outdoor activities abounded, led by Barton Springs, a spring-fed pool near downtown.

But a few technology companies and research consortiums had a presence too, dating to the 1950s. When Michael Dell’s mail-order computer company found success more than four decades later, Austin was transformed.

Semiconductor chip production plants flourished, and dot-com ventures sprang up in the city’s hilly western corner. The county’s population soared 41 percent in the 1990s, enhanced by a well-educated work force.

But the U.S. economy and the stock market began tumbling in 2000.

Now Austin is retooling and questioning its priorities, illustrating a strain felt among its midsize city peers nationwide.

The yawning budget deficit has caused tension. Flat population growth has contributed partly to declining sales-tax revenue. The city has chopped about $50 million in spending for the next fiscal year, meaning layoffs, the elimination of community programs, reduced library hours and higher property taxes.

One local business segment facing fewer restrictions, however, is the entertainment industry, much to the dismay of some. Political officials in October rescinded Austin’s smoking ban at taverns, restaurants and music venues after placing the ordinance on hold for five months. The city now will require businesses to buy a $300 annual smoking license.

The new mayor, Will Wynn, opposed the smoking ban. He contended it could have turned away smoking customers and hurt profits at nightspots, tarnishing Austin’s reputation as the “Live Music Capital of the World.” Advocates of the ban cited tobacco’s health risks and environmental concerns affecting both workers and patrons.

Longtime music venue owner Clifford Antone favored the smoking ban. But Mr. Antone, who has backed blues musicians for more than a generation, chides Austin for not supporting the music business enough. “The city has never really helped,” he said, referring to tax abatements for new clubs or relaxed noise and fire regulations.

Endeavor’s Mr. Rudy, who moved to Austin for college in 1979, said the town was like a young teenager: “exuberant” with extreme highs and lows.

“We’ve matured a little bit,” he said. “Now … we have to make some grown-up decisions. Who do we want to be?”

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