County may nominate firm as Enterprise Project
Thursday, October 23, 2014 by Mark Richardson
Executives of Rackspace, a provider of cloud-based computer services for businesses, are asking Travis County officials to nominate their company as an Enterprise Project under the state’s Enterprise Zone Program. Travis County Commissioners held a public hearing Tuesday to take input on the company’s nomination request.
The designation could bring the company up to $1.25 million in state sales tax rebates over the next decade. Rackspace is not requesting tax incentives directly from Travis County, and its nomination would not affect Austin or Travis County sales tax revenues.
Rackspace is a San Antonio-based company that plans to lease space in Austin Community College’s Highland Mall campus in North Austin. The company intends to locate its software development, systems administration and business operations in what used to be a department store.
The Texas Enterprise Zone Program designates census blocks with a poverty rate of 20 percent or more (according to the latest Census) as a state enterprise zone. The census tract containing Highland Mall has a 22 percent poverty rate. Locating there would put Rackspace in line for a number of economic benefits.
Rackspace plans to spend $32 million to develop the site and add 500 new jobs to its current 600 employees over the next decade. Program regulations specify that at least 25 percent of those hired for new jobs must be residents of the Enterprise Zone or economically disadvantaged.
The company also cited the area’s possible location as a hub for the city’s proposed rail plan. Austin voters will consider a transportation bond Nov. 4 that would authorize $600 million toward a rail system that would have a terminal at ACC Highland campus. There is already a Capital MetroRail station on Airport Boulevard next to the ACC Highland site (which is separate from the city’s proposed rail line).
“In 2006, we entered the Austin market with a small group of sales individuals with the purpose to enter into kind of a very high-tech-rich area,” said Bill Blackstone, director of site operations for Rackspace in Austin. “Over the last eight years we’ve seen rapid growth, and we now have 600 employees in the local area that are within Travis County.”
Blackstone said Rackspace began to run out of space earlier this year at its current location at Rundberg Drive and I-35 and began looking around the city for locations.
“We were introduced to the ACC project at Highland Mall,” he said. “In the early part of this year, ACC produced a public RFP process looking for a partner to help redevelop the Dillard’s portion of Highland Mall. They were looking for a corporate partner to be able to not only occupy the space, but also then help them with curriculum development, etc.”
Blackstone said the company plans to work closely with ACC to assist with its programs and provide opportunities for students.
Commissioners will post an item to vote on nominating Rackspace to the Texas Enterprise Program at their regular meeting next Tuesday.
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