Esther's Follies, Royal Blue Grocery and a Spanish-immersion preschool get city help to stay put

A nearly 50-year-old Sixth Street theater, a 20-year-old downtown grocery and Austin's first Spanish-immersion preschool are getting city incentive payments meant to keep them open. The Austin City Council approved the agreements on Thursday's consent agenda, along with a fourth that pays for free nonprofit office space in a new affordable apartment building.

The four deals come from the city's Place-Based Enhancement Program, which the city describes as a Chapter 380 incentive for local, creative and legacy businesses. For residents, they show where the city is choosing to spend incentive money while the general budget is tight.

The four agreements

According to each item's recommendation for action:

• Esther's Follies (26-2710): up to $182,664 over five years. The theater at 525 E. Sixth St. was founded in 1977, seats about 200 people per show and runs five shows a week. The money is for facade and interior upgrades and for digitizing its archive of costumes, scripts and video, per the staff memo.
• Royal Blue Grocery (26-2808): up to $82,077 over five years for its Third Street store, open 20 years. Staff wrote that high downtown office vacancy and fewer hotel stays during Convention Center reconstruction have made basic capital improvements cost-prohibitive.
• Escuelita del Alma (26-2806): up to $84,390 over five years. The preschool opened in 2000 on Congress Avenue and moved twice. The second move came in 2022, after the Texas Department of Transportation took its I-35 frontage-road site by eminent domain for the Capital Express project. It bought a new property for nearly 230 students that carries a higher tax bill, according to staff.
• Waverly North (26-2709): up to $864,210 over 10 years. The historic adaptive-reuse project at 3710 Cedar St. will have 76 income-restricted apartments. In return, it will give a nonprofit that provides eviction-prevention services free office space, the memo says.

Together the four agreements total up to $1,213,341. Only $66,530 is available this fiscal year. Every later payment depends on the council putting money into the Economic Incentive Reserve Fund in future budgets, and on each business meeting its performance terms, according to the Oct. 22 agenda.

What was said

No one pulled the items. Mayor Kirk Watson spoke on all four from the chair before the consent vote. He called them place-based investments that help keep Austin affordable, preserve its culture and support legacy businesses. On Esther's Follies, a venue where he joked he has been made fun of more than once, he said: "This is exactly the type of investment we ought to be making" in the arts. He described Royal Blue as part of the pedestrian-oriented retail a working downtown needs.

The consent agenda passed without objection, with Council Member Natasha Harper-Madison absent.

What our records add

Earlier awards passed unanimously, too. The council approved the program's first two awards, to Balance Dance Studios and The Hideout, 11-0 on consent in November 2025. In March 2026 it approved up to $107,803 for The Vortex, also 11-0. None of the Place-Based Enhancement agreements in our records has drawn a no vote.

Waverly North has been before the council before. The staff memo lists a February 2025 resolution supporting its tax-credit application and June 2025 votes to change the site's land-use designation and rezone it to multifamily. Its developer, O-SDA Industries, also received an Austin Housing Finance Corporation loan the same day for a different project, Rowen Vale. We covered those loans here.

What's next

City staff will now negotiate and sign the agreements. Payments are made only after each business meets its agreement's terms, and each year's payment depends on that year's budget. The program takes applications on a rolling basis, according to the city.