Rackspace confirms that Windsor Park is the preferred location of it's expansion of 6,000 workers if it stays in San Antonio
Eyeing more Rackspace
Web Posted: 04/25/2007 10:45 PM CDT
http://www.mysanantonio.com/business...e.2bd6308.html
L.A. Lorek and Rachel Stone
Express-News Business Writers
San Antonio's fastest-growing technology company, Rackspace Managed Hosting, might move its headquarters to the Windsor Park Mall.
Or it might move out of state.
Other states are actively recruiting Rackspace, which has 1,612 employees including 1,250 in San Antonio, said Lanham Napier, Rackspace's chief executive officer.
"I don't think it's a situation where we want to move the whole company out," Napier said. "But for the next 1,000 Rackers, we've got to decide are they going to be in San Antonio or are they going to be somewhere else?"
In January, the Windcrest Economic Development Corp., backed by a consortium of investors in Texas, Louisiana and California, bought the Windsor Park Mall. The deal was officially announced late Tuesday.
County records show that the backers invested at least $15.3 million to acquire the 1.2-million-square-foot property from three owners.
The investors put up all of the funding and will take over the property in case it doesn't sell, said Windcrest city administrator Ronnie Cain. Windcrest is in "preliminary stages" of negotiating with several companies that could buy the site, including Rackspace.
The land that the mall sits on is in the City of San Antonio. That means the cities of Windcrest and San Antonio would have to work out the details about how to provide any tax abatement incentives to Rackspace or another company.
"We're going to be as supportive as we can to redevelop that area," said Robert Peche, San Antonio's economic development director. He declined to provide any further details.
Rackspace executives have talked with the cities of San Antonio and Windcrest, as well as Bexar County and state economic development officials about incentives to keep the company from relocating out of Texas, said Mario Hernandez, president of the San Antonio Economic Development Foundation. He declined to give specifics on those incentives.
The Windcrest EDC could use funds provided under the state's economic development sales tax law to structure a variety of incentives, from outright funding to property tax relief for the mall's new owner.
"It's a priority of the city, county and state to keep them here," Hernandez said.
The Windsor Park Mall site is Rackspace's preferred location in the San Antonio area, Napier said. It offers a campus-like setting that could accommodate more than 6,000 employees, which Rackspace eventually could have, he said. Rackspace is getting close to outgrowing the 200,000-square-foot building it leased two years ago on the Northwest Side, Napier said, and the privately held company cannot afford the time or cost to construct a new campus, he said.
"We've got these space requirements today," he said. "We need access to an existing building and we can start moving people in."
In addition to the mall, the City of Windcrest and its investors are trying to close on the purchase of 17 acres near the mall, just north of Walzem Road. The 17-acre tract is inside the city limits of Windcrest.
The Windcrest EDC has had difficulty drawing developer interest in the vacant acreage because of the decrepit mall, Cain said.
"Windcrest has been trying to develop (the acreage) for years," said Ray Watson, the EDC's executive director. "People weren't interested because they wanted to know what was going to happen with the mall."
Windsor Park Mall, which opened in the late '70s, was a shopping destination with major retail anchors such as Dillard's. But it started losing tenants in the late '90s. The mall's last tenant, Mervyn's, closed in 2005.
Graham Weston, chairman of Rackspace, owned the portion of the mall where the Montgomery Ward store used to be, but he sold it several months ago for an undisclosed price, said Annalie Drusch, Rackspace spokeswoman. Weston was out of town Wednesday and unavailable for comment.
In 1998, three Trinity University students founded Rackspace, which provides Web hosting services to businesses. The company survived the dot-com collapse, and has grown quickly from the 200 employees it had in 2002. Last year, Rackspace's revenue topped more than $220 million.
Napier said the question is whether Rackspace can make Windsor Park Mall the right long-term home. "For the next 5,000 Rackers, is San Antonio the best place to do that, or do we need to move to another talent market?"
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