Council debates Zilker Café contract after single bid, staff to revisit alcohol and procurement approach

Austin City Council members opened an extended discussion on Aug. 26 about the Zilker Café concession after staff reported the solicitation produced a single compliant offer and procurement and parks staff recommended the contract for approval.

"This is a revenue generating contract, so it's not an expenditure of public funds," James Scarborough, the city’s chief procurement officer, told the council while describing the solicitation process. Scarborough said the solicitation was published online, notified 427 registered vendors, included three commodity codes (vending/concessions, food management services, and a miscellaneous services code), and lasted 39 days with a pre-offer conference and site visit. He said one offer — from Legacy Hospitality and Entertainment — was received and that the Parks and Recreation Department’s board recommended approval.

Multiple council members raised concerns about why other vendors did not bid and whether requirements or restrictions discouraged local small businesses from applying. Councilmember Paige Ellis — who had pulled the item for discussion — and others pressed staff on outreach, commodity codes used, and the solicitation’s preference language for local products.

Denisha Cox, from contracting, said the solicitation included a preference for operators that "support local diverse family and cooperative owned small and mid-sized agricultural and food processing operations." Cox added that bidders were required to submit a proposed menu subject to Parks review, but the menu preference was not a mandatory numerical threshold.

A recurring reason cited by prospective vendors for not bidding was the prohibition on alcohol sales at the café, Scarborough said. He said other concerns included the site’s seasonality, operational disruptions from major nearby events (such as ACL), and the minimum monthly fee and revenue-share requirements. Councilmembers said those constraints reduce interest from local operators and make it harder for locally owned businesses to compete.

Resident Chris Flores, who said she swims at Barton Springs and Deep Eddy, raised environmental concerns during public comment before the briefing. "My reason for coming to you today is about the Zilker cafe," Flores said, describing sewer and grease incidents near Deep Eddy Pool in 2023 and asking that the contract address environmental protection for salamander habitat near Eliza Spring.

Councilmember Ryan Alter and others urged patience to get the terms right for a long-term relationship at a high-profile public site. Treasury and procurement staff and the city CFO discussed alternatives: Ed Mannino, the city’s chief financial officer, suggested that some concession arrangements be treated as real-estate transactions (a leasing model) rather than the formal procurement process the city used. Mannino said real-estate treatment could allow more flexibility to market and structure agreements to prioritize local businesses.

City Manager T.C. Broadnax told council staff would reconvene with procurement, finance and Parks to evaluate next steps, including the possibility of withdrawing the item from the Aug. 28 agenda. "We will reconvene, discuss how we may wanna move forward, consider what we wanna do with the item that is currently scheduled for Thursday, and then follow back up with the council on next steps," Broadnax said.

Council debate also covered conditional-use permitting and past denials. Staff said a conditional-use permit request for alcohol at the site was denied by the planning commission in 2021, which councilmembers said has limited vendor interest. Councilmembers who supported allowing limited beer-and-wine sales said it could make the business financially viable and expand the pool of competitive bidders.

What’s next: staff will meet across procurement, Parks and finance to report back with options — including treating the concession as a real-estate lease, revisiting alcohol/CUP approaches, or adjusting solicitation terms — and may remove the item from the on-deck agenda while they return with recommendations.