Austin Business Journal: Rackspace’s plan to move into Highland mixed-use project inches ahead

The deal that would see tech company Rackspace Hosting Inc. — more than two years in the making — occupy a revamped Dillard’s department store in the former Highland Mall is still in the works, now that the Austin Community College board of trustees recently approved the final language for the lease agreement.

However, “it’s important to note the lease has not yet been executed,” Jessica Vess, the community college district’s associate director of communications, told Austin Business Journal on Monday.

ACC is redeveloping the obsolete shopping center in North Austin into a campus and mixed-use project.

In the past week, news has surfaced that private equity firm Apollo Global Management LLC is reportedly buying a controlling interest in Rackspace (NYSE: RAX), the managed cloud technology company based in San Antonio with major Austin operations.

Vess didn’t address what impact the purported sale could have on the Highland Mall deal. Rackspace has a significant footprint in Austin with about 600 employees.

The deal for Rackspace to become a major part of ACC’s Highland campus has been a long time in coming together, dating back to 2014. ACC President Richard Rhodes indicated the proposal was imminent during a presentation to real estate professionals in January 2015. In May 2015 he told me that public-private partnerships are difficult and take time.

Vess reiterated that stance.

“Negotiation in this unprecedented collaboration has been steady and thoughtful,” she said. “We have learned that to do it right takes time. At the end of the day, the many ACC stakeholders involved including ACC students, faculty and staff and the community our college serves matter most.”

Tags: ACC, Austin Business Journal, Rackspace