The first public-private partnership in Austin Community College history took a first step forward July 7.



Rackspace Hosting, a cloud management technology company, could soon move into the old Dillard's space in Highland Mall, pending negotiations between ACC and Austin-based development team Live Oak-Gottesman. If the deal is successful, Rackspace intends to relocate 570 employees to the new Highland campus by late 2015, according to ACC.



ACC board members voted to authorize negotiations during their July 7 board meeting after receiving two proposals for repurposing the four-story, 194,000-square-foot former Dillard's location.



"This is a one of a kind [project] in the country that will put ACC on the map," ACC President Richard Rhodes told board members prior to their vote. "This [partnership] will give our students opportunities we couldn't provide on our own, and it puts us in a leadership position nationally to show what can be done in a mall when partnering with other entities."



Austin's technology companies have already expressed interest in this partnership and other ACC programs underway to boost the number of area qualified tech workers, Rhodes said. This partnership specifically provides opportunities for paid internships, earn and learn programs, scholarships and possible student incubator space, he said.



"There are significant benefits to the institution and the community," he said.



The Live Oak-Gottesman proposal was one of two submitted for consideration after ACC requested concept proposals back in April. According to ACC, the former Dillard's space is the last section of the old Highland Mall that needs redeveloped for college use, meaning the lease with Rackspace could come attached with an anticipated move-out date.



A portion of the lease paid by Rackspace, currently based near San Antonio, will go back to Live Oak-Gottesman to repay building renovations. Live Oak-Gottesman is also affiliated with RedLeaf Properties, an Austin real estate investment team that will repurpose the old mall parking lots into mixed-use development.



The public-private partnership requires two public hearings, one for the concept and another for the final contract, before becoming official. Neil Vickers, ACC vice president of finance and budget, told board members those hearings could be held Aug. 4 and 22, while Sept. 7 is the target date for approving the contract.



"If we fail to negotiate, we would be coming back to the board at that point and be back to starting from scratch," Vickers said.



Multiple board members expressed enthusiastic interest for the potential project and partnership.



"There is something to be said for a submittal that's well prepared, shovel-ready and ready to move forward," trustee Vic Villarreal said. "This is a one-of-a-kind, perhaps first-of-its-kind, transformation of a mall into a space and now a partner space, perhaps."



Board members voted 6-0-1, with trustee Guadalupe Sosa abstaining because she said there should have been more time to allow project submissions. Trustees John-Michael Cortez and Tim Mahoney were absent.



The Live Oak-Gottesman project concept must be posted to the ACC website in the next 10 days, according to the rules of the public-private partnership.