Are SXSW's Economic Benefits Limited To Downtown Austin?

Mar 17, 2017

Conrad Bejarano is sitting in the back room of his store, I Luv Vintage, at Guadalupe and 29th streets, with his son, Sebastian. They’re cutting out pictures from old magazines and making buttons.

"You smash that, swing it around and you get a souvenir button of Richard Gere and Jodie Foster," he says. 

South by Southwest is a weird time for locally owned stores outside of downtown, Bejarano says.

“The locals, they keep away from anything South By," he says. "So you have to make it up on the tourist end because all the locals would go away. So the business you would normally have is gone, and you’re dependent on all the advertisement and hype of SXSW. [If] you talk to people who aren’t associated with South By, business is horrible.”

“If you’re not geographically close by, it’s not a benefit.”

But it’s hard to get tourists to leave downtown.

Bejarano, who also owns Spider House Café and Ballroom just behind I Luv Vintage, says public transit stops running too early and isn’t convenient enough. He says the city doesn’t make it easy for local businesses to benefit from the festival.

“They do pretty much everything in their power to stop South By, as far as for the locals. So anything where business, like small businesses, are just trying to bring people in because everybody goes away, they’ll do everything to basically shut you down.”  

Dean Lofton with the Austin Independent Business Alliance agrees. “If you’re not geographically close by, it’s not a benefit.”

This year, the organization partnered with the Austin Chronicle to organize an event called Austin by Austin. It focused on local business districts outside downtown, like the North Loop and lower Burnet Road areas.

Conrad Bejarano, owner of I Luv Vintage on Guadalupe and 29th streets, says he rarely sees a boost in sales during South by Southwest.
Credit Stephanie Tacy for KUT

On Saturday, businesses in these areas offered discounts, live music and food and drinks. The business alliance provided shuttles to take people from downtown to the neighborhoods. When her group approached local businesses with the idea, Lofton says, even they were resistant.

“They were like, ‘Why would we do something during South By? It’s always dead,’” Lofton says. “And we were like, 'That’s exactly our point. We want you to benefit from these people who are coming here and we want to take this opportunity to be able to show it to you.'"

Lofton says the event is an opportunity to showcase the unique side of Austin. It also allows locals who don’t want to deal with the chaos of downtown to experience a little bit of the festival.

Many of the businesses that participated are continuing to offer discounts through this weekend.

“You don’t really have an Austin experience when you come to South By. You have an awesome South By experience, but that’s not Austin year round,” Lofton says. “So, we wanted people to have a glimpse of that.”

“If people talk about [SXSW] money coming in and being really useful for the community, it sort of smacks of trickle-down economics."

There are some areas of Austin where SXSW crowds never go – mostly residential areas, like Dove Springs, where Austinite Sam Anderson-Ramos grew up.

He says places like the Pleasant Valley Shopping Plaza on the corner of Pleasant Valley Road and Stassney Lane remain unchanged during SXSW; most of the stores here are empty, with many of the windows boarded up.

Anderson-Ramos says SXSW isn’t a factor in the day-to-day lives of families in the predominantly Hispanic neighborhood.

At a recent community meeting in Dove Springs, he says, nobody talked about the festival. "They’re interested in tenants’ rights, and they were talking about rezoning issues and development issues and things like that and 'Where’s our green spaces?' Nobody said anything about South by Southwest. They don’t need that, they need revenue.”

Anderson-Ramos, who teaches writing at St. Edward’s University, says it’s difficult to understand how the hundreds of millions of dollars brought in by SXSW benefit his neighborhood.

“If people talk about that money coming in and being really useful for the community, it sort of smacks of trickle-down economics a little bit,” he says. “Presumably, if someone spends money buying fancy ramen somewhere, a little portion of that, like a penny of it, will end up putting a cross walk in Dove Springs. But that doesn't seem realistic or, if it does happen, that's not enough. "

Last year, a study found Austin was the most economically segregated city in the country. Ramos questions how a festival like SXSW, which is expensive to attend, reaches out and connects with all residents.

“Where the money is would tend to be where the Caucasians are, and I don’t think SXSW is any different. Austin certainly isn't that different. Probably, if the W hotel is benefiting from SXSW, I would imagine those people tend to be white or already wealthy. So, in that sense, unless they’re rerouting that money into neighborhoods that are more marginalized or racially diverse or at least not majority-white in the city, then I think it’s probably not doing much for people of those particular races.”

Sam Anderson-Ramos
Credit Martin do Nascimento / KUT

Last year, SXSW’s economic impact on the Austin economy was $325 million, according to an estimate by a firm hired by the festival. It especially profits the hospitality industry. SXSW estimates most of that goes to businesses and those who worked during the festival, who do live in all of Austin’s neighborhoods. That cash flow has grown every year, as SXSW has grown.

“That’s sort of been the lesson, that the more business you have coming in, presumably, the better off the city is going to be," Anderson-Ramos says. "I’ve been alive here since 1982, and I haven’t seen anything  get better. I have seen things get more expensive, and I’ve seen the schools stay the same and I’ve seen trash on the streets stay the same and empty lots stay the same.”

Anderson-Ramos says he fears change and improvement means Dove Springs and neighborhoods like it could get less affordable for the people who live there now. 

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