Austin Community College moves forward without Rackspace at Highland campus

The building Rackspace was supposed to occupy at ACC Highland has undergone asbestos abatement.

The building Rackspace was supposed to occupy at ACC Highland has undergone asbestos abatement.

A lease agreement between Rackspace and Austin Community College was never completed after the technology company sold last year to a private investor, and ACC said it is moving forward with designs for Highland campus improvements without Rackspace.

Now, the building Rackspace was supposed to occupy has been stripped of asbestos, and its steel beams sit quietly while construction occurs next door on RedLeaf Properties' new mixed-use development, which is expected to be completed later this year.

"I think it's becoming clear [Rackspace's] new ownership is revisiting their strategic vision for things," ACC's executive vice president of finance and administration Neil Vickers said. "The college is not willing to wait for them."

Rackspace, whose headquarters are located in a converted San Antonio mall, was privately acquired by investment management company Apollo Funds in August for $4.3 billion. Rackspace provides businesses with expertise and customer service for cloud platforms.

Co-founder and chairman of the Rackspace board said in a news release the transaction was “the result of diligent analysis and thoughtful strategic deliberations by our board over many months. Our board, with the assistance of independent advisors, determined that this transaction, upon closing, will deliver immediate, significant and certain cash value to our stockholders."

He said the acquisition would provide the company with more flexibility to manage the business for long-term growth and enhance product offerings.

Rackspace spokesperson Monica Jacob confirmed in an email no lease with ACC was ever signed.

"The acquisition of Rackspace by Apollo has not changed our position on the importance of having a presence in Austin," she said.

Community Impact Newspaper reported in April 2015 the contract was supposed to last 10 years with two five-year renewal options, according to Bill Blackstone, former Rackspace director of Austin operations.

ACC's Vickers said design work was completed ahead of the anticipated lease signing. He said ACC is hopeful to begin construction in the coming months, although the college system isn't sure exactly how the space will be used. Vickers said he hopes ACC can partner with another company or companies that align with the college's innovative, technology-driven vision t0 fill the space.

"That was the intent with Rackspace, and that’ll be the intent for any future partners," he said.

Vickers said he hopes construction on the building will parallel the work going on during phase two of the Highland campus. Phase two is slated to wrap up in less than three years and includes new art studio and classroom space, the new bioscience incubator, new faculty offices and a regional workforce innovation complex.

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