Home of blues: A backstage view of Antone’s new 50-year lease

When Antone’s night club unveiled its new 50-year lease last month, the public learned only the broad strokes: a landmark agreement, a future blues museum, and $1.3 million in support tied to the city’s cultural preservation efforts.

But that lease was signed earlier this year, in February, following negotiations that began years earlier, Antone’s co-owner Will Bridges and Rally Austin CEO Theresa Alvarez told Austin Free Press in interviews. Rally Austin is an economic development nonprofit that helped craft the long-term lease.

Much of that time was spent hashing out how to utilize local hotel occupancy taxes, which legally must be spent to promote tourism. Behind-the-scenes haggling shaped the final deal, from the length of the Antone’s lease to the decision to invest most of the money in the Antone’s World Famous Museum of the Blues instead of rent subsidies.

In a downtown market where five- or 10-year commercial leases are rare, a 50-year lease for a locally-owned, live music venue is almost unheard of. Before landing at its current 5th Street location, Antone’s had been displaced six times since its 1975 founding. That’s one reason why the city created the Austin Cultural Trust, along with Rally Austin’s Iconic Venue Fund. It seeks to preserve cultural institutions through long-term investment and real-estate stabilization deals.

“What does a 50-year lease really do for you? It allows for that mental change where you’re able to plan long-term, Bridges said. “You’re able to think like a Paramount Theater or Austin City Limits. I call it switching from surviving to thriving. We’re using the club’s 50th (anniversary) milestone to get out of that day-to-day survival mode and into more of a preservation and development mindset.”

Alvarez said five-decade leases are seen as a way to provide economic certainty for some of the city’s creative and hospitality workers.

“When you stabilize a venue like Antone’s, you’re preserving an entire ecosystem of jobs for musicians, lighting techs, sound engineers, bartenders, everyone,” Alvarez said. “And once they’re stable, they can actually create new jobs.”

“House Rent Blues”

The local need for such cultural support dwarfs the available resources. When the fund opened in 2022, roughly 50 applicants requested an estimated $350 million in combined support for leases, purchases, and capital improvements. Only $27 million — from $12 million in 2018 bonds and a mix of hotel tax revenue and general fund dollars — was available. To date, only a handful of deals totaling almost $17 million have been completed, making Antone’s one of the most significant cultural-preservation investments the city has undertaken so far.

Antone’s stayed quiet about its historic lease signing in February, Bridges said, because Rally Austin and city legal staff were still ensuring that the deal met state requirements that hotel occupancy taxes be spent to promote cultural preservation and tourism.

Early discussions had focused on spending most of the public funds to cover some of the downtown rent that Antone’s pays. That followed the script of Rally’s $1.6 million investment in 2023 to help the Hole in the Wall cover a 20-year lease. Eventually, Rally Austin and city legal staff concluded that hotel tax dollars would be better spent allocating $800,000 to build the Antone’s World Famous Museum of the Blues, buttressed by $500,000 for rent, operations, and stabilization tied to cultural tourism.

The museum’s potential for daytime visitors, interpretive programming, and a long-term revenue stream aligned with requirements for spending hotel taxes.

“We realized the spillover effect of the museum was as impactful as the rent subsidy,” Bridges said. “It creates a whole new revenue model and brings people into the space during the daytime, something Austin really doesn’t have in the live music world.”

In the first concrete step, Antone’s and its landlord, a unit of Finley Co., signed a long-term lease. Then, Rally Austin could begin drafting performance agreement details on how the museum and stabilization funds would be spent.

“Because of the (hotel occupancy) tax restrictions, the conversation evolved into a museum,” Alvarez said. “That building itself has historic significance, and the history of Antone’s over the past 50 years makes it a natural fit for cultural tourism.”

“Having all those hotels in the area means people can discover a museum at Antone’s and go see the history of Austin music,” Alvarez said. “It drives both local and visitor tourism, and it helps tell the story of how Austin became the Live Music Capital of the World.”

Accounting blues

To comply with the $1.3 million, 20-year agreement, Antone’s must continue operating as a live music venue, maintain its cultural-preservation mission, and build the museum on schedule. The agreement includes annual reporting requirements, audits, and compliance reviews to ensure that hotel-tax monies fund cultural tourism.

One aspect that has not previously been reported is that — following several years of initial support — Antone’s will begin to repay money into the Iconic Venue Fund. The repayment will be derived from one-third of the museum’s revenue over 20 years. These revolving funds reflect Rally Austin’s goal of financing long-term cultural investments rather than one-time public expenditures.

Alvarez said that the Cultural Trust’s full $27 million has already been allocated across previously announced projects and a handful of others that are still in the works. Future assistance to arts spaces hinges on the city council replenishing the Iconic Venue Fund or voters approving more spending. Rally Austin is pushing for a $259 million 2026 bond package to fund the Cultural Trust, legacy businesses, and affordable creative workspaces. It estimates that the bonds could leverage private investment to generate some $1.5 billion in economic impact.

For all its fanfare, the Antone’s deal raises a larger question: How will the city measure the success of its cultural investments? While project performance agreements include reporting requirements and compliance reviews, the city has not publicly defined how it will determine if these investments deliver measurable gains in tourism, cultural engagement, or live-music jobs.

The Cultural Trust’s first $27 million has already been spoken for, with seven deals completed for local venues and creative spaces. Rally Austin staff continue to work on $10 million in other deals selected from the initial call for proposals in 2022. Without further funding from the council or voters, the Hole in the Wall, the Empire Control Room, and Antone’s might stand alone as rescued music venues.

Chad Swiatecki is a 30-year journalist who relocated to Austin from his home state of Michigan in 2008. He most enjoys covering the intersection of arts, business and local/state politics. He has written for Rolling Stone, Spin, New York Daily News, Texas Monthly, Austin Monitor, Austin Business Journal, Austin American-Statesman and many other regional and national outlets.