Wednesday, October 13, 1999

The Cyber Scene in Austin ~ By Will Kreth

The Cyber Scene in Austin ~ by Will Kreth

Is it more than novelty that drives the once-decaying downtown cores of the US to become "wired"? What kind of "techtopia" do we really seek in re-concentrating digital 21st Century businesses into late-19th-Century vertical office and warehouse spaces found in the "revitalized areas" of most cities? Does it merely mean the local messenger sandwich shop suddenly adds pesto and arugula to a sub, or does it mean more?

These were the kind of questions I found myself asking at "Plug and Play," the October 13th luncheon held by the Downtown Austin Alliance (DAA). The guest speaker was Sharon Greenberger, VP of Economic Development at the Alliance for Downtown New York (ADNY). As co-founder and former Director of the Information Technology District (ITD) for the ADNY, Greenberger was instrumental in making the cold, dark canyons of the I-can-hear-my-echo-after-5PM area around Wall Street seem more inhabitable to software companies, by wiring buildings up with broadband Internet access and encouraging support services and retail to follow them to the area. Today, hundreds of new tech companies inhabit the once-empty office spaces.

While this isn't exclusively a big city phenomenon, it does have its roots there. San Francisco's Multimedia Gulch and New York's Silicon Alley, are both downtown "technology districts," led by entrepreneurial necessity, local political "skid-greasing," and general acknowledgement. In fact, anywhere cheap office space is found in abundance - combined with an available creative workforce - you're sure to find some new tech neighborhood traction. In San Francisco in 1994, it was the $0.60 per-square-foot sewing factories filled with Chinese-American seamstresses that would be displaced by latte-chugging X'ers slinging Java and HTML. In NYC, the corridor of new Web shops along or near Broadway (from the Flatiron District down into SoHo) would become known as Silicon Alley. After awhile, the ghostly skyrising Financial District Skeletor buildings of Lower Manhattan (that never quite recovered from the '87 Crash, the '91 Recession, and the rise of client-server) were next in-line to change. And whether the new equity-class of knowledge-workers gather for lunch (to recruit and flirt) on the lawns of SF's South Park oval, or NYC's Historic Battery Park, the neighborhoods they haunt are certainly no longer haunted.

Now it appears downtown Austin is trying to emulate the seismic shift that ultra-urban software development has brought to these cities. Many people know that Austin's software Mecca already has a catch phrase attached to it, in the nom de tech of "Silicon Hills." This refers to the concentration of high-tech companies to the west of downtown, nestled in the ridges and canyons that are the gateway to the Texas Hill Country. As scenic as the hills are - heaven help you if you want to take public transportation to get there from downtown. In short, without a car: you're screwed. And even though light-rail lines are a possibility in about, oh, 15 years - there isn't any current plan to extend light rail to the west of town, where so many of the new jobs are located.

Looking at the success of places like S.F. and NYC, perhaps it's not surprising that last year the office of Austin Mayor Kirk Watson christened the increase in software companies and support services in downtown as the "3-D" - the "Digital Downtown District." However, this proclamation was the cause of consternation for some, because it was tied to the announcement that Computer Sciences Corporation (CSC) would be building a new building on a choice plot of city-owned land. The building they'd have to tear down? A beloved Austin nightclub known as Liberty Lunch. While the dust has settled somewhat from this change, it's a sign that many parties are deeply interested in trying to keep the best of Austin's lively culture while embracing the future.

After the luncheon, I talked with Lucy Buck, Associate Director of the DAA, and
she said the City of Austin has made progress in beginning to think "outside the
box." "Things have changed," said Buck. "The core-values of the Austin are
evolving; and the power structure is thinking less and less about local
turf-wars, and thinking more about Austin's place in competing against regions
and markets around the globe." Realizing that with about a 98% Class A office
space occupancy rate in downtown, a new ordinance was passed to allow a tax
break for home-based businesses. Noting the tight downtown rental market, Buck said she sees properties that were basically considered "unrentable" (on the market for as long as seven to eight years) now finally renting out - retrofitted with high-speed Internet access and Ethernet LAN's. And the DAA is trying to do something unheard of: they're asking landlords to take equity stakes in some of the cash-strapped start-ups, in lieu of long-term leases. Whether the barter culture of "might get lucky" equity for tangible assets in the present can impress conservative landlords remains to be seen. Buck remains optimistic that the changes underway are both inexorable and healthy.With estimates of approximately 100 people moving to Austin every day, the face of the city is rapidly morphing into an as-yet-unknown amalgam. One thing everyone can agree on, however, is that they don't want Austin to become Silicon Valley. And if the only way to check sprawl is to bring business back to downtown, then the base of support for these initiatives is probably larger than meets the eye.

Well, that's all this week from Austin, where both the weather and the people
are always warm, sometimes hot, but never cold!