Thursday, February 3, 2011

How One Institution is Seizing a Unique Building Opportunity

Built in 1971, the Highland Mall was the first real mall in Austin, Texas. Since then, newer malls with shinier versions of the same stores have opened in more affluent neighborhoods in the city, creating a major decline for the once popular Highland Mall. That’s where Austin Community College came in to turn demise into opportunity.

Less than a week into 2011, the college announced it had purchased Macy’s, one of the last remaining anchor stores in the mall. “It’s not a great location for a retail mall anymore, but it’s a great location for us,” explains Ben Ferrell, executive VP for finance and administration at ACC.

For $5 million, ACC has expanded its property ownership by 13 acres, including 12 acres of parking. In May 2010, the college purchased a Dillard’s at the mall for $4 million. Without Macy’s, the mall will be 71 percent vacant. Many of the remaining stores in the shopping center are involved in lawsuits trying to break their leases and it could only be a matter of time before ACC owns all the space. “If the price is right and we weren’t buying a lot of trouble, then yes, we would be interested in considering additional facilities there,” says Ferrell.

The purchase fits into a districtwide facilities master planning effort that has been in the works since 2007.

“The plan in part of that was to do land banking for near- and long-term purposes,” says Ferrell. “We kind of keep a scan going on constantly for opportunities because the district has been growing rapidly for a long time.”

ACC had 44,000 credit students and about 10,000 continuing ed students enrolled last fall in eight campuses throughout the city.

It will be two to three years before ACC does anything with the Highland Mall buildings, but Ferrell says the college envisions using the space to enhance continuing education and consolidate district administration offices. If the entire property falls into the college’s hands, it will be redeveloped into a mixed urban use area, providing a boost for both the college and the community. —K.D

Originally appeared in the February 2011 issue of University Business

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