Bexar County approves incentives for $40M Rackspace building agreement

Developer Industrial Commercial Properties LLC agreed to purchase property

File: Rackspace

SAN ANTONIO – As an industrial developer prepares to take the keys to the former Rackspace headquarters building, it got the support of county officials this week.

Bexar County commissioners approved an incentives agreement between the county, the city of Windcrest and Cleveland, Ohio-based developer Industrial Commercial Properties LLC at a Commissioners Court meeting Tuesday. Windcrest Mayor Dan Reese announced the company’s intention to purchase the 62-acre property in September, saying that the company had been working with local officials to come to an agreement that would be beneficial for the parties involved.

The agreement, approved by Windcrest City Council last week, outlines a $21.5 million purchase price for the property and $18.5 million for the interior and exterior renovation work. The pact also provides a framework for the Windcrest Economic Development Corporation to take ownership of the land, which ICP would then lease for seven years. Through direct activity or through leasing to others, the group hopes to bring at least 600 jobs to the site and $10 million in sales tax revenue.

The county is kicking in $2.8 million in incentives as part of the deal, according to Bexar County Economic Development Director David Marquez, who said the amount is what Rackspace paid to the county for early termination of its lease in the building.

Rackspace announced last year it would move out of the former Windsor Park Mall by the end of 2022 and sell the site, moving into a much smaller space on San Antonio’s North Side.

ICP Executive Vice President Keith Brandt told the court that the former mall-turned-office is a perfect example of the redevelopment work in which the firm specializes. What eases the project, he said, was the fact that a large amount of square footage inside the building was left untouched by Rackspace. That allows for an easier interior finish-out as tenants identify their size requirements.

He also said that redeveloping excess parking that surrounds the building would lead to a boost in sales taxes. He identified six to eight parcels that would see potential development.

The sale is expected to close on Dec. 15.

You can read the full the story in the San Antonio Business Journal.

Editor’s note: This story was published through a partnership between KSAT and the San Antonio Business Journal.