Rackspace headed to ACC Highland campus

Jul 9, 2014
Austin American Statesman

Austin Community College says it will enter a public-private partnership with tech company Rackspace Hosting that will move 570 of Rackspace’s Austin employees into ACC’s Highland campus, formerly Highland Mall in North Austin

Rackspace — a cloud management company based in San Antonio — plans to open its Highland offices in late 2015, in a space that formerly housed Dillard’s women’s store

Rackspace, which is proposing a 20-year-lease, said it plans to expand its workforce at the Highland site, although the company cited no projected headcount figures. Rackspace currently has more than 5,700 employees in 16 offices globally and nine data centers. The partnership is expected to include paid internships for ACC students, as well as enhanced technology training and other educational benefits, while allowing Rackspace to benefit from being by the college

ACC’s board of trustees voted Monday to authorize contract negotiations with Live Oak-Gottesman, an Austin commercial real estate development firm. Live Oak-Gottesman will renovate the four-story, 194,000-square-foot former Dillard’s space, funded by a portion of Rackspace’s lease payment. Rackspace is currently located off Interstate 35 near Rundberg Lane

The proposed timeline calls for construction to begin early next year and wrap up by December 2015. The estimated cost of the renovation is $28 million

The lease rate for Rackspace will be negotiated over the coming months. The current proposal is that the rate would cover all renovation costs, plus generate an estimated $2 million for the college over the life of the 20-year lease

The 1.2-million-square-foot former Highland Mall was Austin’s first indoor mall, but it fell into decline amid population shifts and the departure of anchor stores to newer suburban shopping centers

ACC acquired the Highland Mall property, which sits on more than 80 acres, in phases during 2010, 2011 and 2012. The college identified the former Dillard’s anchor store as the last section that would likely be developed for college use. ACC sought a partner organization to use the facility in the interim and solicited proposals from developers this spring

Located next door to ACC’s administration building, the Highland campus will be one of ACC’s largest campuses, with the capacity to serve 6,000 students in its first phase. That phase, which will have about 200,000 square feet of instructional space in what was once Highland’s JC Penney store, will open for fall classes in August

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