I want to follow up on this post by M1EK on the Austin Children's Museum planned move from downtown to Mueller.
I'm personally disappointed with the move. My wife has taken my son to ACM several times, usually with other moms, and grabbed lunch or gelato afterward or ridden the 'Dillo, which he loves. I live south, so we probably won't go to Mueller very often.
But I think the ACM's move nicely illustrates the principle of agglomeration economies, which are one of the main advantages big cities offer over small ones.
Mueller is developing a robust agglomeration of child-oriented services. ACM will be near the Dell Children's Hospital, pediatricians' offices, the planned Rathgeber Village, and a nice community pool and playgrounds. ACM will benefit tremendously from being part of this cluster. And this isn't even counting the benefit of being closer to more customers, particularly the gold mine of children in Pflugerville and Round Rock. More visitors will allow it to offer more attractions, drawing even more visitors, and so on. ACM will enjoy these spillover benefits for "free," sort of -- these benefits will simply be bundled with the rent it pays.
Downtown's Second Street is a different kind of agglomeration. Its trendy shops and bars cater mainly to adults. While ACM no doubt benefits from some spillover traffic, I imagine that on net ACM produces more spillover benefits than it receives. It draws people downtown who might not otherwise come downtown, enlarges the market if just slightly for the other restaurants and shops downtown (including the library), and generally makes the downtown experience more enjoyable. ACM can't capture these benefits unless it receives heavily subsidized rent. It was supposed to move to Block 21 and receive a rent break from Stratus, but the subsidy apparently wasn't deep enough. It may well need "negative" rent -- i.e., direct cash payments, to make downtown as attractive for it as Mueller.
Again, let me emphasize that I think downtown is a net loser from ACM's move. I'm simply skeptical that its loss will be as big as the gain ACM will enjoy simply by changing address.
