Dig Deeper Texas

Rackspace is going to move into Windsor Park Mall, no thanks to the city of San Antonio.

MySA.com: Business

Under the deal, Windcrest will pay San Antonio for 30 years on the 221 acres it gave up. San Antonio is guaranteed to receive at least $4.1 million, but it could receive as much as $34.5 million in a split of property and sales taxes.

San Antonio gave Microsoft Corp. a 10-year, 100 percent tax abatement worth $20.7 million and voted to provide $5.2 million from the CPS Energy economic development fund for its $550 million data center in Westover Hills. But the only incentive the city provided to Rackspace was the boundary change.

In addition to the $22 million state grant, Rackspace is receiving incentives from Windcrest, including a 14-year tax abatement on the property.

Windcrest officials also are purchasing 111 acres south of the mall and plan to select a developer to create a $225 million mixed-used residential and retail complex.

Rackspace plans to invest $100 million in the Windsor Park Mall location. It also plans to move its 1,300 local employees to the mall and to hire 3,000 more employees with an average salary of $51,000 within the next five years.

So we give Microsoft $20 million for 75 jobs and nothing for a home-grown company that is planning to hire 3,000 more employees. Rackspace is adding executives as well.

Rackspace beefs up executive ranks - San Antonio Business Journal:

Rackspace hired Kiprian Miles, the former vice president and chief information officer of Golfsmith International, as the company’s new vice president of information technology.

The company also hired Thomas Hatton as Rackspace’s newly created vice president of talent development position.

How many executives is Microsoft sending here? Why do we believe that Microsoft is going to generate more economic development than Rackspace? Why is it the state can come up with money to keep Rackspace here and the city and county can’t. According to Nelson Wolff

MySA.com: Business

“It’s wonderful for Rackspace to make a statement that they would like to be the Dell of San Antonio,” Bexar County Judge Nelson Wolff said. “It shows their community spirit.”

Community spirit? The state coughed up $22 milllion to keep Rackspace in San Antonio. I suppose it is community spirit since Rackspace could have just as easily move to Dallas and still keep the state money.

This is typical San Antonio. Something developed locally couldn’t possibly be worth our money be it politicians or companies. But come up with a name like “Microsoft” and we’ll throw all kinds of money just for the honor of the company associating its name with San Antonio even though San Antonio was considered a prime data center location before Microsoft ever announced plans to build here.

I bet we could have paid Microsoft for the right to call it the “Microsoft Dome” and it would have cost us less.

Technorati Tags: Rackspace, Windsor Park Mall, economic development, Microsoft, data center, Nelson Wolff, Texas Enterprise Fund

Filed under: Microsoft, Nelson Wolff, Rackspace, Texas enterprise fund, Windsor Park Mall, data center, economic incentives