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Business

What Does the Future Hold for Local Businesses on South Congress?

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Jorge Sanhueza-Lyon
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KUT News
One of the consequences of Austin's growth is higher rent prices. That's why some area businesses are considering relocating.

On South Congress, skyrocketing rents are forcing some local businesses to relocate. What does that mean for the area’s future? 

Kitty Bird is standing on the side of Burnet Road, waving a big sign that reads, “Honk if you love fair trade.”

“If anything, they see fair trade, they see our sign, and they come in next time when they need a gift,” Bird said. “And that’s worth it.”

Bird is the director of Ten Thousand Villages, a nonprofit store that sells handmade crafts from artisans around the world. She’s trying to attract new customers since moving the business away from its longtime home on South Congress Avenue.

“We decided it was time to expand and, once we did that, we started talks with the landlord, and they realized just how much they could get for what market rate was,” she said. “Unfortunately we couldn’t afford market rate, so we had to look elsewhere, and Burnet Road here next to Allendale and Crestview and Rosedale was just the perfect spot.”

But, as Bird has learned, leaving that bustling shopping district comes with its challenges. Business at the Burnet location is nowhere near what it was before the move.

“Just take February for instance,” she said. “We have 8,000 people walk through the door last February. This February, a little over 2,000.”

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Credit Jorge Sanhueza-Lyon for KUT News
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Some are concerned higher rents will push out locally owned mom-and-pop businesses along the busy South Congress corridor.

While high operating costs force some businesses to relocate, that space never stays empty for long. Jorge Rangel is a commercial real estate broker who represented TOMS shoes and Torchy’s Tacos.

“They both wanted to be on South Congress for all the same reasons other retailers want to be there: because it retains a level of authenticity that is synonymous with Austin,” Rangel said.

But some business owners say they feel a change up and down the street. Paul Kleypas is the store director at St. Vincent de Paul. The thrift shop opened on South Congress in 1981.

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Credit Jorge Sanhueza-Lyon for KUT News
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The St. Vincent De Paul thrift shop on South Congress owned its own building, so didn't have to face the rising rent prices. The business is still relocating though, as its primary clientele has moved elsewhere.

“It was a time when the clients that we needed to serve were heavily located in this part of town,” Kleypas said. “Over the last 30 years, this area has very much gentrified, so the need for us to be here has changed.”

In a few weeks, the store will move to a facility on Braker Lane. Kleypas is looking forward to having more space, more parking and being closer to the clientele he wants to serve. Luckily for him, this wasn’t a rent issue. They own the building and were able to sell it to help fund the move.

“I think businesses that are now coming in, the bar’s been raised to where it’s expensive to be here,” he said. “There’s not a lot of opportunity for small mom-and-pop businesses here anymore.”

So, is there any hope for local businesses to ride that wave of change? Brandon Hodge, president of the South Congress Merchants Association, believes the change is more like a ripple, adding that the business district is changing, albeit slowly.

“It bodes well that with the uptick that we’ve witnessed on South Congress in the last 15 years or so, that so many merchants who helped make it what it is have actually weathered the storm,” Hodge said.

Hodge thinks it’s possible for old and new merchants to exist symbiotically. He points to the South Congress Hotel as an example.

“They came to us and said, ‘What would you like to see?’” he said. “And to see big-money development actually have that kind of consideration for those around them and the community they will be joining is really refreshing, and I hope that that will continue.”

Hodge says for now, local merchants are taking it day by day, riding the ripples of change.

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