Corporations drag down small businesses on Guad


Photo Credit: Alex Dolan | Daily Texan Staff

The culture that defines student life doesn’t happen just on campus, but also right across from it on Guadalupe Street, or The Drag. From conversations over coffees at Caffe Medici to taking in live music at Hole in the Wall, The Drag is a community gathering spot for students and Austinites alike.

The stretch of Guadalupe running parallel to campus has been fondly called The Drag for decades. The Drag has always adapted to changing times, from horse-drawn carriages in the 1800s to Dunkin’ Donuts in the 2000s. As Austin’s population grows, so do rent prices along The Drag, causing problems for smaller or locally owned businesses that line the street.

“Austin is booming,” business honors, finance and Plan II honors junior Alex Bouthillette said. “Everything is being regentrified. The Austin city planners are going for New Urbanism when they regentrify, trying to create a new, modern urban feel that captures Austin’s culture, but it’s fake in a way.”

Urban studies sophomore Ashley Yen said the “fake” Austin culture Bouthillette described has already taken over The Drag. Yen said businesses that try to emulate Austin’s quirkiness, like Space24Twenty, commercialize and appropriate local culture.

“Space24Twenty bothers me the most — the live music and bar venue should be more local and Austin-like instead of bringing somebody like Urban Outfitters thinking they can do this better than a local venue,” Yen said. “There could be an Urban Outfitters on any street in America, but you only get one Hole in the Wall.” 

To make room for Space24Twenty, Urban Outfitters bought out the leases of five neighboring businesses on the block between 24th St. and 25th St, including locally owned chain pizzeria Mellow Mushroom and Manju’s, a local clothing boutique that began in 1977 on The Drag. This isn’t the first time a larger business took over a local staple on The Drag — in 1990, Tower Records took over Varsity Theater, which had been on The Drag since the 1930s, causing a communal outcry.

“There’s a lot of turnover in these commercial areas and I’d be hard pressed to say that the franchises represent a challenge,” said urban policy professor Robert Wilson. “In principle, it would be nice to nurture locally owned businesses — I think that’s a great idea. But on Guadalupe, if you don’t have businesses serving the market, they’ll disappear.”

The lack of commercial real estate growth in Austin has started gradually driving up rent prices in denser areas said Nick Naumann, an associate at retail real estate company Weitzman. 

“On Guad, rents are prone to increasing partly due to lack of availability and partly a factor of the volume these certain concepts can do in these heavily trafficked areas,” Naumann said. “There are different owners on Guadalupe but I have seen rents from $40-$45 per square foot on certain properties.”

Bouthillette has also noticed the rising prices, and said sometimes smaller businesses can’t afford the higher rent on The Drag, leading bigger corporations to take over. The Drag has long provided Austinites, students and visitors alike, a place to communally congregate, acting as a touchstone between UT’s campus and the outside world. Sometimes, the mix of corporations and Austin’s culture falls short, especially in Yen’s eyes.

“It’s hard for local businesses to be compared to franchises,” Yen said. “They (franchises) have more everything. It’s just harder for local stores to have the same opportunity.”