NW Austin drawing startups, big names in technology sector

Steve Schaffer said he remembers when he founded Offers.com in Northwest Austin six years ago. It was the most convenient location for his workers, less expensive than downtown, had ample parking and it was easy to find small office spaces for rent, he said.

“Nobody’s ever said, ‘Why aren’t you downtown?’” Schaffer said.

Another benefit of Offers.com’s Loop 360 location, Schaffer said, is its view of the hills.

“Everybody loves that,” he said.

Since the start of 2015, Austin has topped “Best of” lists from Forbes, The Brookings Institution and The Wall Street Journal for its ever-growing tech market. Apple Inc. recently solidified its Northwest Austin presence by purchasing the complex it had been leasing on Riata Vista Circle.

“We are the envy of every other market in the country as far as tech growth,” said Julie Huls, president and CEO of Austin Technology Council, a nonprofit with 280 company members.

Michele Skelding, senior vice president of Global Technology and Innovation at the Greater Austin Chamber of Commerce, said Austin contains more than 4,700 high-tech companies representing about 25 percent of the regional payroll.

“The dominant part of that story is the Northwest Austin tech hub, a virtual who’s who of the tech world,” she said.

‘The flag in the ground’NW Austin drawing startups, big names in technology sector

Expert opinions differ on how the Northwest Austin tech boom started. Huls said it could have begun in 1983 with Microelectronics and Computer Technology Corp., or MCC, a consortium of 20 high-tech firms that researched and developed materials for semiconductors and optoelectronics.

According to the Texas State Historical Association, Austin won a national bid for MCC’s headquarters after offering the corporation a subsidized lease on property in Northwest Austin.

Others argue IBM established the region as a tech hub when it opened its office on Burnet Road in 1967, spurring nearby development.

David Gibson is a senior research scientist at the Innovation, Creativity, Capital, or IC2, Institute at The University of Texas. He said if there is one decisive establishment that started the Northwest Austin tech boom, it was likely the J.J. Pickle Research Campus.

“To me, that was the flag in the ground,” he said.

UT acquired use of the campus in 1946 as a war and military research laboratory, according to the TSHA. The university contracted to buy the site from the U.S. government in 1949 and completed the purchase in the 1970s.

The campus has been home to 70 laboratories in its history, according to the TSHA.

Fostering innovation, growth

The Pickle campus today serves as a research and innovation center for all types of engineering and sciences.

The campus includes the West Pickle Research Building, which is home to the Austin Technology Incubator, a UT program that helps tech startups find investors. Biotechnology startup Alafair is in the incubator program and operates out of the West Pickle building.

Alafair Chief Operations Officer John Joyoprayitno said the arrangement allows Alafair access to UT’s conference room and support staff. He said Alafair is one of several biotech startups in Northwest Austin.

“It’s a whole lot more affordable than it is downtown—that’s for sure,” he said.

As UT continues to produce and nurture startups, Northwest Austin also draws big names, such as Apple, which is currently building its 1-million-square-foot Americas Operations Center, set for completion in 2021, according to the chamber.

Operations Center buildings at 5501 Parmer Lane passed final inspection in 2014, according to city officials. The larger portion of the project, at 5505 Parmer Lane, has not yet been inspected, a city staffer said.

HomeAway Inc., one of the world’s largest online marketplaces for vacation rentals, opened its fourth office in the Austin area at The Domain in 2014. At the time of the opening, founder Brian Sharples hailed the location’s easy access to public transportation, hotels, dining and shopping.

Suffusing the city

Based on the chamber’s data, Skelding said 60 percent of Northwest Austin companies are in the tech industry compared with 34 percent of downtown companies.

“There’s not enough building space [downtown]. ... And the prices are much higher,” she said.

But other experts argue, despite the cost difference, Northwest Austin is not the lone hub of technology and innovation in the city.

“The place has amazing history, and it’s evolved, but so has the rest of Austin,” Gibson said.

He said technology companies will likely continue to pop up all over the city.

Chris Skyles, partner of SkylesBayne Commercial Real Estate, said East Austin in particular could begin to attract smaller tech companies looking for a creative, hip location. But, Skyles noted, much of Austin is not zoned for high-rise office buildings.

“I think that Northwest Austin and downtown will continue to be the leaders for some time,” he said.