ACC Under Contract for Final Piece of Highland Mall Land- ACC Newsroom

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ACC Under Contract for Final Piece of Highland Mall Land

For answers to frequently asked questions, see FAQs – ACC’s Highland Mall Real Estate Transactions (PDF).

The Austin Community College District is under contract to purchase the remaining tract of land at Highland Mall – the former J.C. Penney building and surrounding parking lot – for $15.9 million, including closing costs and fees.

The acquisition will include approximately 17.3 acres of land and more than 225,000 square feet of space in a two-story building and a smaller retail site located directly along Airport Boulevard. The deal is expected to close in August.

“The role of the board is to ensure a solid foundation for ACC’s future, so we can continue providing quality, affordable education,” says Dr. Barbara Mink, chair of the Board of Trustees. “Increasing educational and workforce training opportunities is key to economic development in Central Texas. Highland Mall allows us to expand our programs and services in a central location while consolidating college administration.”

The Board of Trustees will consider the preliminary official statement for the issuance of revenue bonds Monday night (June 6), which would clear the way for the transaction to be financed. ACC went under contract May 26 and is purchasing the former J.C. Penney tract from RedLeaf Properties, LLC, which acquired the other pieces of Highland Mall before selling them to the college.

“The Highland Mall acquisitions made financial and strategic sense as we grow to meet the dramatic increases in enrollment mandated by the state’s Closing the Gaps initiative,” says Dr. Stephen B. Kinslow, ACC president/CEO. “Highland Mall plays a key role in the college’s Master Plan, and the J.C. Penney purchase is the final piece of the puzzle.”

ACC’s intentions for Highland Mall include additional instructional space, consolidation of administration, a Continuing Education center, a convocation center, space for nonprofit affiliates, a conference center, and a wellness and professional development center. The site has many advantages, such as access from major roadways, proximity to public transportation (including a new Capital MetroRail stop on Airport Boulevard), and ample parking.

ACC is currently growing by some 4,000 students a year, with a record 45,056 credit students enrolled in spring 2011. The Master Plan calls for ACC to accommodate enrollment growth through expansions of existing campuses and new construction.

When the J.C. Penney deal closes, ACC will own 100 percent of the land at Highland Mall (approximately 80.8 acres) and three of the four anchor buildings (more than 642,000 square feet). The acquisition history includes: 

  • May 2010: Closed on Dillard’s women’s store property; 18.5 acres and 194,000 square-foot building. $4.71 million, including costs and fees.
  • December 2010:  Closed on Macy’s property; 12.8 acres and 223,000 square-foot building. $5.7 million, including costs and fees.
  • May 2011: Closed on land under the core of the mall; 32.2 acres. Buildings on this land are subject to a ground lease through 2070 with the company operating the mall. It is anticipated existing mall businesses will continue operations according to the terms of their subleases with the ground tenant. $14.8 million, including costs and fees.
  • August 2011: Expected to close on the J.C. Penney property; 17.3 acres and two buildings totaling more than 225,000 square feet. The second building in the J.C. Penney transaction is a strip center, and the businesses will continue to operate per their lease terms (leases run approximately five more years). Estimated $15.9 million, including costs and fees (will be finalized at closing).

“This was a series of complex transactions with a number of potential obstacles – including multiple original owners and legal challenges at the mall,” says Matt Whelan, principal of RedLeaf Properties. “Together we have accomplished a lot in just over a year’s time, and it has been an honor and a pleasure to be part of this project that will have such a positive impact on the college and the community.”

RedLeaf retained the right to reacquire portions of the properties; these areas do not include the buildings or land ACC will use for educational purposes.

By working with RedLeaf, the college was able to take advantage of the company’s expertise in commercial real estate and extensive due diligence work already performed on the Highland Mall site. This allowed ACC to move forward much more quickly, secure the properties at less than their appraised values, and maintain focus on the college’s educational mission.

ACC expects to begin renovation work on the Dillard’s, Macy’s, and J.C. Penney properties in the next three years. The college will engage the community as it further develops long-term plans for the Highland Mall site.

“The future of Highland Mall is now secure,” says Austin Mayor Lee Leffingwell. “ACC’s role at the mall ensures that the ultimate redevelopment will be thoughtful and appropriate for the surrounding community.”

In addition, ACC is finalizing plans for the construction of new campuses in Elgin and north Hays County.

posted in: ACC Highland Updates, ACC Homepage Announcements, ACC Newsroom, Official ACC Press Releases

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