Austin: CSC ready to negotiate sale of downtown building

[arbeiter]

Monday, December 10, 2007 - 3:22 PM CST
Computer Sciences Corp. ready to negotiate sale of downtown building
Austin Business Journal - by A.J. Mistretta

Silicon Laboratories Inc. may be able to complete the consolidation of its offices now that Computer Sciences Corp. is ready to sell its leasehold interest in the second of two buildings that it developed downtown.

After inking an agreement with the city in 1999, Computer Sciences Corp. built twin mixed-use buildings at 200 and 400 West Cesar Chavez on either side of Austin's City Hall. But the information technology company never fully occupied the office space in both buildings and ended up offloading the building on the west side of city hall to Silicon Labs (NASDAQ: SLAB) in 2005. Austin-based Silicon Labs moved hundreds of its employees, including product development and its executive team, to the offices at 400 West Cesar Chavez last year.

Last week, the Austin City Council decided not to exercise an option laid out in the original development agreement that gave the city right of first negotiation to leasehold interest in the roughly 220,000-square-foot building at 200 West Cesar Chavez. That opens the door for Computer Sciences Corp. to negotiate with others to take the property. Silicon Labs has made no secret of its intentions to relocate all of its employees from offices in Southwest Austin to downtown. Fred Evans, redevelopment project manager with the city's Office of Economic Growth and Redevelopment Services, says the city has been notified CSC has an offer to acquire the property.

Shannon Pleasant, director of corporate communications for Silicon Labs, says the council's decision was a key step in allowing negotiations between the two companies on the building, but she stopped short of saying Silicon Labs was committed to taking the property. She says more information on a potential deal could be released this week.

Evans says if Silicon Labs does end up acquiring the building, their increased presence would be a welcomed addition to the downtown office scene. "They've already been great to work with on Block 2," he says.

Four of the five stories that encompass the building are dedicated to office use while the ground level is retail that makes up part of the emerging Second Street District.

[arbeiter]

^^^ this isn't a big deal other than that nobody seems to be asking: WHERE DID THE INCENTIVES GO?

Didn't CSC take a bunch of money to own and occupy part of the building for a fixed amount of time? Does that transfer over to Silicon Labs now?

These buildings were a huge mistake; they're office parks in the middle of prime land, and I remember being embarrassed during construction. But at least a high-dollar employer is consolidating downtown.

[mars-man]

Originally Posted by arbeiter

These buildings were a huge mistake; they're office parks in the middle of prime land, and I remember being embarrassed during construction. But at least a high-dollar employer is consolidating downtown.

I beg to differ. They'd be attractive buildings wherever they were, but their height and materials respond particularly well to their lakeside location. The only screw-up on the city's part, in my opinion, is bowing to the demand that city hall rise no taller than either CSC building.

[arbeiter]

maybe huge mistake was an exaggeration (the current downtown post office is better to call a huge mistake). i still think that if these parcels of land were developed a few years later, the height restrictions would have made them close to uneconomical to develop without incentives. I find them to be entirely too squat - and I don't mind the materials, but it just seems like a waste of land. I don't buy into that Austin ideology that we need everything to be short next to Town Lake.

[MichaelB]

While I did not like the fact that the city agreed to the height restrictions, remember there was no one else clamoring to build downtown at the time. It is time for the "20/20 hindsight quote here. There was a large need to try to get something rolling downtown. Kirk (Watson) was working to think out of the box.... it was not perfect.... but there wasn't anything happening and who could sit and bank on.... or wait to see.... if something else would happen. We had been stagnet too long. It was, as imperfect as hindsight may tell us, still a smart move to try to get something stimulated in the area. We are finally benefiting from the re-envisioning of that entire area.

[arbeiter]

you're right - the only thing we really won from the late 90's and early 00's in terms of downtown's development was the PR of downtown's possibility for being vital. Other than that, we only got Intel and CSC out of it - thankfully, people placed their blame more on Intel than on Austin's government for that debacle. We had to be 'easy' for a few years in order to get where we are today. If it had been 3 years later that it got built, that Convention Center Hotel wouldn't be so ghastly.

[MichaelB]

Originally Posted by arbeiter

If it had been 3 years later that it got built, that Convention Center Hotel wouldn't be so ghastly.

You are SOOOOO right! (at least I would hope!)

[arbeiter]

Although maybe not - there are some convention center hotels going up in certain cities (which shall remain nameless) that were built 3 years later and are just as ugly

[JAM]

SIlicon Labs to buy second building for future downtown expansion


By Shonda Novak
AMERICAN-STATESMAN STAFF
Tuesday, December 11, 2007

Silicon Laboratories Inc. plans to buy the second Computer Sciences Corp. building on Cesar Chavez Street as it consolidates its presence in a downtown undergoing dramatic change.

Silicon Laboratories, an Austin-based chip design company, became the first major employer to move downtown in more than four years when it bought the first CSC building at 400 W. Cesar Chavez St in 2005. It has 430 employees in that building, including about 90 who recently moved from two other locations in Southwest Austin.

Now Silicon Laboratories is negotiating to buy CSC's twin six-story building two blocks east, at 200 W. Cesar Chavez St., for an undisclosed price.

CSC had a 99-year ground lease from the City of Austin on the land, which gave the city first rights to buy the building. But city officials last week waived that right, clearing the way for CSC and Silicon Laboratories to continue negotiating. The building, with 220,000 square feet, is appraised on the tax rolls at $41.3 million.

CSC, an information technology services provider, has 450 employees in the building, where it plans to lease space from Silicon Laboratories for five years, said Jackie VanErp, vice president of CSC's financial services sector. She said CSC remains committed to its Austin headquarters and that it "will continue to have a significant employee presence in Austin."

Jon Ivester, Silicon Laboratories' vice president of worldwide operations, said the company does not have a detailed plan in place for how many employees will occupy the second building.

"We are clearly a growth company and we are committed to Austin as our headquarters, so naturally we would want to be prepared for expansion," he said. "Buying the companion building to the one we currently occupy is a great way for us to maintain a strong presence downtown."

Lindsey Starnes, global public relations manager for Silicon Laboratories, said employees "love being downtown," and in the growing Second Street retail district in particular. That part of downtown has been transformed into a popular area of shops, boutiques, restaurants and apartments.

The current and former CSC buildings sit on both sides of City Hall.

A new W hotel, high-end condos and a new home for "Austin City Limits" are destined for the block just north of City Hall.

Environmental groups and city leaders applauded Silicon Laboratories' move downtown in 2005, preferring to see it housed there instead of on sensitive watershed territory in Southwest Austin.

"So from our perspective, this is very positive," Assistant City Manager Laura Huffman said. "This is very definitely the kind of innovative company" the city wants to see grow downtown.


Find this article at:
http://www.statesman.com/business/co...1/1211csc.html

[M1EK]

Without these 'squat' buildings, the later tall ones wouldn't have come downtown, guys. You're forgetting that nobody wants to build a 20-story condo building when everything else is parking lots and warehouses - compare to a 20-story building next to a couple of 6-story buildings which are full of office workers who you might be able to convince to go condo-shopping.

[arbeiter]

Originally Posted by M1EK

Without these 'squat' buildings, the later tall ones wouldn't have come downtown, guys. You're forgetting that nobody wants to build a 20-story condo building when everything else is parking lots and warehouses - compare to a 20-story building next to a couple of 6-story buildings which are full of office workers who you might be able to convince to go condo-shopping.

I don't think they wouldn't have never come downtown. It was just part of the opportunity cost for getting there when we did, which was to be a bit more, shall we say, flexible in our standards. Either way, the CSC buildings won't look so bad when all of the blocks are finally developed.

[KevinFromTexas]

One thing I've always thought would have been cool is if they had engineered them so they could add height later to the existing building. This isn't impossible of course. Heck, there's even a building in Chicago that's around 400 feet that is having something like 25 to 30 floors added to it. It'll end up being over 700 feet tall once it's finished. The original architects and owners/developers had planned for this.

As for the CSC buildings, I sort of have a love hate relationship with them. They're a familiar face along the lake, but I do wish they weren't so suburban-esque.