By Edmond Ortiz
Staff Writer

Windcrest is in the home stretch in an effort to acquire the former Windsor Park Mall property and other nearby land. The deal could grow sweeter if the high-tech company Rackspace Managed Hosting agrees to come in and anchor massive redevelopment of the area.

Following a two-hour closed session Monday, City Council unanimously ratified an incentives package that Windcrest is offering to Rackspace. Council members also authorized Windcrest to continue talks with relevant parties involving a boundary change, grant agreement, restrictive covenants and a development pact.

The Windcrest Economic Develop-ment Company, a separate development consortium from the Windcrest Economic Development Corporation, bought the vacant mall property from three owners earlier this year.

Attorney Jim Plummer, who is representing the city of Windcrest in the negotiations, summarized for the audience the proposed terms being offered to Rackspace, the northwest San Antonio firm that has expressed interest in Windsor Park Mall as a potential site for relocation and expansion.

Rackspace would commit to growing to 6,000 total employees by the end of 2012 and implement a median salary of $51,000. Rackspace would pay taxes for the first two years of operation at a redeveloped mall property and then enter into a 14-year exemption period.

Rackspace would pay for infrastructure improvements in the area, including building a route linking Walzem and Eisenhauer roads in a land swath that Windcrest would gain. The boundary would follow the Interstate 35 frontage road and stretch toward Midcrown Drive. This land includes vacant non-residential property. Windcrest and San Antonio would split tax revenues there.

Aside from retrofitting the mall into a new corporate headquarters, Rackspace aims to transform 111 acres south of the mall into a mixed-use campus where its employees could live and play. The new development would be open to Windcrest and adjacent San Antonio residents to enjoy as well.

Rackspace would pay an upfront lease equal to the purchase price plus $5 million. If during this period that Rackspace decides to terminate the lease and relocate again, Windcrest can recapture tax revenue. The city would be able to recapture some tax revenue if Rackspace were not to achieve its workforce expansion goals at the aforementioned milestones.

Windcrest officials worked with counterparts from San Antonio and Bexar County and state legislators to work on the boundary change. According to Plummer, the covenants would restrict in the Rackspace area what are being called “uses obnoxious to the community.”

In addition to Rackspace reviewing the proposal, San Antonio City Council is scheduled to examine its city’s part of the deal Aug. 2. Bexar County Commissioners are slated Tuesday to again review the proposal.

While local officials remain optimistic that all parties will soon sign off on the deal, a problem had developed recently. The development group including investors from Texas, Louisiana and California – has had to extend its contract to market the mall and adjacent properties.

The investors indicated they would not commit any more of their capital toward the redevelopment project until the city of Windcrest and its economic development corporation would loan money for an extension.

There had been concern the Rackspace part of the deal would fall through, Plummer said. Council eventually agreed for the city EDC to use identified funds in its budget to grant the consortium an extension.

Plummer said if the developers sell the adjacent properties and/or if Rackspace gets the mall, money comes back to Windcrest. Otherwise, the consortium may put the mall back on the market. Contract extension negotiations are ongoing and the final dollar figure could end up between “a couple of hundred thousand dollars to $500,000,” Plummer added.

“It’s a hard decision to obligate the city and the EDC to that kind of money, but I feel strongly about this project. The council feels strongly about it,” Councilwoman Garlene Bach said.