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A theorem concerning corporate headquarters
November 1, 2012 6:37 PM   Subscribe

If you are Rackspace, then your corporate headquarters are located inside a dead shopping mall in a suburb of San Antonio. (SLNYT)
posted by IvoShandor (64 comments total) 8 users marked this as a favorite

 
From the link:

"he also had a grand vision of creating a tech mecca comparable to Austin’s so-called Silicon Hills, located 60 miles east of the mall"

(it's north people, Austin is NORTH of San Antonio)
posted by roboton666 at 6:42 PM on November 1, 2012 [2 favorites]


If you're Rackspace then you'd better stop dropping my damn VPN connection.
posted by charred husk at 6:43 PM on November 1, 2012 [5 favorites]


They also have a daily shuttle that does a round-trip from their North Austin office to the San Antonio Mall-mecca, with a stop in the middle at a shopping complex near my house in South Austin. My wife and I were driving by the mall on the way back from a trip to San Antonio today, and I noted that it was where Rackspace lived, and if I worked there I'd get to take the hour long shuttle down every day. She was unimpressed.
posted by jeffkramer at 6:49 PM on November 1, 2012


I happen to have been to the facility and have a family member that works inside. The space is truly amazing, and while you can see the shopping mall bones of the place, it really is nothing like what it once was.

(and the slide is FUN).
posted by deezil at 6:52 PM on November 1, 2012 [4 favorites]


Hopefully it's like Dawn of the Dead, where the employee workspace is a loft accessed by a ladder and trap door, and employees can walk into the stores and take anything they need for free.
posted by KokuRyu at 6:55 PM on November 1, 2012 [5 favorites]


That's pretty cool. I can think of a couple of malls that would be great for this sort of reuse.
posted by limeonaire at 7:01 PM on November 1, 2012


dude is worth 1.2 bil and lives in a fucking double-wide? wtf.
posted by elizardbits at 7:02 PM on November 1, 2012 [6 favorites]


What's a SLNYT?
posted by KokuRyu at 7:07 PM on November 1, 2012


KokuRyu: "What's a SLNYT?"

Single Link New York Times.
posted by fireoyster at 7:10 PM on November 1, 2012 [1 favorite]


Double-wides are perfectly functional. He and his wife probably don't give a shit what people think. Old money.
posted by sonic meat machine at 7:10 PM on November 1, 2012 [10 favorites]


I don't give a shit what people think either but if I were worth 1.2 billion goddamn bucks I'd have a supervillain lair in a dormant fucking volcano, not a double wide down by the river. His judgement is clearly not to be trusted.
posted by elizardbits at 7:13 PM on November 1, 2012 [11 favorites]


Poor Rackspace. We had our email with them for a while (Hosted Exchange) but they just cannot compete with Google's business offering at $10/user/month.

I do not know why every small business in the country doesn't user Google for email.
posted by Aizkolari at 7:26 PM on November 1, 2012 [3 favorites]


... he negotiated to buy the mall for a bargain-basement $27 million. Rackspace also received $72 million in tax abatements and development grants from the State of Texas and the City of Windcrest, a struggling suburb adjacent to the mall. As a precursor to the deal, Windcrest had assumed taxing authority on the property from San Antonio. Windcrest, which has a population of 5,600, had been losing $100,000 in tax revenue annually since the mall closed in 2005.

woahwoahwoahwoahwoah...wait WHAT? The state of Texas and a 'struggling suburb' just paid 72 MILLION to a THRIVING BUSINESS owned by a BILLIONAIRE to buy a brand new headquarters for himself for only 27 MILLION? Why are the local residents not building a guillotine right now, exactly? ~^
posted by sexyrobot at 7:28 PM on November 1, 2012 [5 favorites]


He should move to an abandoned amusement park.
posted by dirigibleman at 7:29 PM on November 1, 2012 [1 favorite]


"What's a SLNYT?"

Single Link New York Times.


No way! I've honestly always thought it was Single Link Not YouTube.
posted by eugenen at 7:32 PM on November 1, 2012 [2 favorites]


woahwoahwoahwoahwoah...wait WHAT? The state of Texas and a 'struggling suburb' just paid 72 MILLION to a THRIVING BUSINESS owned by a BILLIONAIRE to buy a brand new headquarters for himself for only 27 MILLION? Why are the local residents not building a guillotine right now, exactly? ~^

Economics much?

Content: because bringing a positive economic force to a community is a Good Thing. All this let's-literally-cut-the-heads-off-of-successful-business-owners (really?) is super-funny and all that, but it's not employing people. Rackspace is. I'm not sure why you'd view tax incentives to drive economic growth as such a devilish plot....

PS just kidding, it's not funny -- or clever, or novel.
posted by wrok at 7:36 PM on November 1, 2012 [5 favorites]


"he state of Texas and a 'struggling suburb' just paid 72 MILLION to a THRIVING BUSINESS owned by a BILLIONAIRE to buy a brand new headquarters for himself for only 27 MILLION?"

In many states (16), if your employer gets a tax break for putting their factory/HQ/facility/warehouse there (or for not moving it out), when they withdraw your state income taxes from your paycheck, they get to just KEEP YOUR TAXES and not remit them to the state:
"Why do state governments do this? Public records show that large companies often pay little or no state income tax in states where they have large operations, as this column has documented. Some companies get discounts on property, sales and other taxes. So how to provide even more subsidies without writing a check? Simple. Let corporations keep the state income taxes deducted from their workers’ paychecks for up to 25 years."
Development grants are at least honest and aboveboard.
posted by Eyebrows McGee at 7:36 PM on November 1, 2012 [2 favorites]


Wait why isn't this post about Deadmalls.com. I mean, come on DEAD MALLS people.
posted by Potomac Avenue at 7:44 PM on November 1, 2012 [3 favorites]


woahwoahwoahwoahwoah...wait WHAT? The state of Texas and a 'struggling suburb' just paid 72 MILLION to a THRIVING BUSINESS owned by a BILLIONAIRE to buy a brand new headquarters for himself for only 27 MILLION? Why are the local residents not building a guillotine right now, exactly? ~^

Well, the $27 million was presumably from one private entity to another. And then Texas and the local city coughed up $72 million in 'tax abatements and development grants.

Tax abatements are just forgiving future tax debt, so giving a company an abatement, for some time, to locate there can be a huge win. You weren't taxing them anyway, so continuing to not tax them for some period of time probably isn't going to make that much difference.

With the company located in a town, local property values go up, increasing tax revenue. And it can also charge sales tax, and income tax on the profits of local businesses that serve those employees. In exchange for not taxing the business, in other words, you grow your town's tax base, possibly very substantially.

Developments grants are iffier -- it really depends on what they were used for. Presumably, they were used to fix the mall up to suit the new ownership, or build out local infrastructure to support it. (but they also mention a payment of $5 million from Rackspace for infrastructure, so the grants may not have been used there.) Presumably, they'll retain some of the value of that money spent, though what percentage, I don't know.

The town says their tax receipts have been going up 10% a year, which is absolutely fabulous. We don't know where they started, so the $72 million may not yet be a smart investment, but if they keep growing at that rate, it absolutely will be, eventually. In our horribly dysfunctional economy, growth like that, without any sign of financial bubble, should be cause for envy.

Government spending, even government borrowing, can both be very good things, if used intelligently. Sadly, we typically don't borrow intelligently at all, which is wrecking us. In this case, though, it looks like a really good investment.
posted by Malor at 7:50 PM on November 1, 2012 [9 favorites]


Does this mean that most of the work areas don't have windows? I'm not sure I'd like that.
posted by Chef Flamboyardee at 7:58 PM on November 1, 2012


So to move away from the Bill & Ted version of the French Revolution... I present you this.

Edit: Abandoned malls can be pretty interesting things.
posted by Blue_Villain at 7:59 PM on November 1, 2012


They also have a big office right in the middle of one of the worst neighborhoods in Austin (35 and Rundberg, one of the main open-air hard drug markets among other things), I actually thought that was their headquarters. I guess they like building offices in crappy places in Texas.
posted by DecemberBoy at 8:04 PM on November 1, 2012


21 posts in, and I'm the first person to make the Dead Shopping Centre/Zombie link?
For shame.
posted by Mezentian at 8:04 PM on November 1, 2012


21 posts in, and I'm the first person to make the Dead Shopping Centre/Zombie link?

Um, Dawn of the Dead isn't about morning funeral services.
posted by chrominance at 8:06 PM on November 1, 2012 [7 favorites]


There are more photos in this Express-News article on the Rackspace HQ.

The City of Windcrest has predicted that the tax revenue generated by Rackspace taking over the abandoned mall (tax income from Rackspace; sales tax income from employees eating at neighboring fast food joints, etc.) will allow the city to eliminate residential property taxes in a few years.

(BTW, Austin is neither north nor east of San Antonio -- it is northeast!)
posted by Ranucci at 8:08 PM on November 1, 2012 [4 favorites]


dude is worth 1.2 bil and lives in a fucking double-wide? wtf.

I'm sure most of that is tied up in the Hanso sword stashed in the rear closet.
posted by bonehead at 8:10 PM on November 1, 2012 [6 favorites]


sexyrobot: "woahwoahwoahwoahwoah...wait WHAT? The state of Texas and a 'struggling suburb' just paid 72 MILLION to a THRIVING BUSINESS owned by a BILLIONAIRE to buy a brand new headquarters for himself for only 27 MILLION? Why are the local residents not building a guillotine right now, exactly? ~^"

In addition to the previous points made: Residents of certain Texas cities (those with more than 3,000 in population and some other unimportant attributes) can vote to create what are called Economic Development Corporations. There are two types: 4A and 4B. 4A EDCs can "cultivate industry." 4Bs can "cultivate industry and build communities." Each (or both, if voters authorize both) are funded by portions of the local sales tax. Texas cities can levy up to 2% sales tax above the 6.25% state rate. Most cities that have EDCs* allocate 1% to general revenue, and 0.5% to each of the two EDCs.

Now, here's the big point: The money paid into the EDC legally cannot be used for any other purpose. It must be used for exactly these types of projects or it sits in the bank (not credit union; Texas cities cannot put money into credit unions). EDC taxes must also be re-authorized by the voters every 5-10 years, otherwise the EDC stops receiving funds and will eventually close down. So they are, nominally, controlled by the voters, both directly and through the City Council.

* Questions of whether cities with EDCs should allocate that money elsewhere, such as regional transit are left as an exercise to the reader.
posted by fireoyster at 8:11 PM on November 1, 2012 [4 favorites]


They also have a daily shuttle that does a round-trip from their North Austin office to the San Antonio Mall-mecca

I have a friend who takes that shuttle (and comments about it to friends) on a regular basis. I did not know the place she was going was inside a mall.
posted by immlass at 9:03 PM on November 1, 2012


Dude's no stranger to the concept of repurposed buildings. He's Graham Weston, of the Loblaws Westons -- the very folks who turned Maple Leaf Gardens into a grocery store.
posted by Sys Rq at 9:09 PM on November 1, 2012 [1 favorite]


All this let's-literally-cut-the-heads-off-of-successful-business-owners (really?) is super-funny and all that, but it's not employing people.

Let's say you did cut their heads off -- what would happen? Absolutely nothing. The employees would go to work, same as they do every day, and the company would keep running as if nothing happened. Owning everything and telling your underlings to figure out how to make you more money isn't exactly a high-value activity.

Trust me, society won't collapse if we stop giving backrubs to the 1%.
posted by AlsoMike at 9:21 PM on November 1, 2012 [4 favorites]



Wait why isn't this post about Deadmalls.com. I mean, come on DEAD MALLS people.


Awww man, I live nearby to the best dead malls of ever: The Great Mall of the Great Plains. It's still covered in cheesy 90's decor, and there's enough stores to stay open, but the rest of it is completely dead. And there's Metcalf South, which is still open but all the stores are closed, execpt for a Topsy's, which sounds so goddamn depressing I'm giggling.
posted by hellojed at 9:49 PM on November 1, 2012 [1 favorite]


it's not employing people

Funny thing about that: the way "employing" works as a transitive verb — where the activity is performed by the boss, and the beneficiary of the activity is the worker — is the opposite of the way jobs work.
posted by RogerB at 9:49 PM on November 1, 2012 [5 favorites]


The town says their tax receipts have been going up 10% a year, which is absolutely fabulous.

Fantastic is a better term, as in the "not true" sense of the word, as far as I can tell.
Windcrest total tax receipts, from the FY11-12 budget [PDF], in $K:
2008-09: $3,668.4
2009-10: $3,774.0 (2.9% increase)
2010-11: $3,753.1 (0.6% decrease) [proj., based on year to date]
2011-12: $4,051.3 (7.9% increase) [est.]

There has been an internal shift in tax source from property taxes to sales taxes, which is usually considered regressive, although to the degree they represent out-of-town Rackspace employees, who typically earn more than the average Windcrest resident, it may not be so regressive as usual.

Of course, if Rackspace was charged at the current mill rate for their property (assuming the value of the mall purchase plus the improvements made), it would pay $554K, representing a 36% increase in property taxes, or 14% in overall taxes.

Windcrest is on the way to balancing their budget, though. They fired 12% of their permanent staff in the last couple of years, for instance. I'm not sure how they managed to cut the fire department budget in half, though -- firing the fire inspector only goes so far. (The building inspector maybe could have done fire inspections, except that he was fired, too, and replaced with a part-time contract worker.)
posted by Homeboy Trouble at 9:52 PM on November 1, 2012 [6 favorites]


I wish he'd buy North Star Mall and turn it into a dead mall.

And there's Metcalf South, which is still open but all the stores are closed, execpt for a Topsy's

Bwhaha Metcalf South. Even in the 80s it was a sad dead place with just a few stores. You'd come out of a store and turn and look down a wide, half dark hallway of oblivion. It was like shopping in the Overlook Hotel, though it had an Orange Julius stand. Also lol.
posted by fleacircus at 11:06 PM on November 1, 2012


Heh. Used to work in that mall back in the 80s. It was only mildly skeezy then. When I moved back to the area circa 2000 it was downright scary. Good on Rack space for repurposing it.
posted by davidmsc at 11:08 PM on November 1, 2012


If you're honestly interested in how development incentives are almost always a scam, check out David Cay Johnston's books. Engaging, enlightening, and absolutely infuriating. He explains how companies often get to pawn off their costs onto taxpayers who either end up paying more or getting less.

It wouldn't be quite so bad if they were required to keep their end of the bargain and didn't almost always find themselves back at the trough in short order. What's most infuriating about this deal ia how most of the employees live outside the city, so they don't even get the revenue they would bring in, instead being stuck with nothing but lunch.

I wish my city would pay for three quarters of the capex on my office. Or even my client's offices. It would make it a lot easier to compete against those damn fools that don't get giant subsidies.
posted by wierdo at 11:43 PM on November 1, 2012 [1 favorite]


There's a lot of this mall redevelopment going around, actually. Austin Community College received a lot of attention for their master plan for the former Highland Mall. It's sort of fascinating that malls, which represent something of the antithesis of New Urbanism, are now succumbing to it as they die -- partly because they represent sufficiently large areas to handle with a master plan as New Urbanism more or less requires (it's sort of pointless in disconnected, tiny doses).
posted by dhartung at 11:52 PM on November 1, 2012


I wish my city would pay for three quarters of the capex on my office. Or even my client's offices. It would make it a lot easier to compete against those damn fools that don't get giant subsidies.

Yeah a funny part of this deal is how the mall isn't actually in Windcrest (pop ~5k). Maybe there's a small town nearby you could bully.
posted by fleacircus at 2:36 AM on November 2, 2012


Zales, hee hee
posted by humboldt32 at 2:36 AM on November 2, 2012


The funny thing is how malls end up being better at some new purpose than what they were made for. There is another company near me that did the same thing with a smaller mall, and it seems like a nice place to work. Another dead mall became a state government outpost kind of thing- many of the various service agencies relocated there, and it turns out it is perfectly suited for it. Lots of room, good parking, one-stop-shopping, etc.
posted by gjc at 3:18 AM on November 2, 2012


How great can it be to work for a multimillionaire who is too cheap to live in a proper house, and whose first thought to furnishing a workplace for employees is to provide card tables and folding chairs?
posted by KokuRyu at 4:59 AM on November 2, 2012 [1 favorite]


Well, it sounds a lot better than what Tim and Eric did given the same scenario.
posted by Strange Interlude at 5:00 AM on November 2, 2012


and whose first thought to furnishing a workplace for employees is to provide card tables and folding chairs?
For almost two years my 'office' was a conference room with four plastic tables and four folding chairs. It was myself and one other IT person sharing with the two admins who answered the phones all day long.

My first day in the office, before I had even met my new boss, I was sitting at my 'desk' and they had an 8:00 meeting in the conference room. I was so new that I wasn't on the department list yet, and because of the nature of the meeting only department members were allowed to attend. So I had to leave, my own office, because I wasn't officially in the department that I was in.

At least if there was a half-vacant mall with an Orange Julius I could have gotten some coffee.

In the two years that followed that meeting I saved the company nearly $100m, as opposed to the $10m/year that I was supposed to (purchasing was always measured in 'savings', no matter how much we spent to get there. /shrug). I asked them if they could at least provide a chair with decent back support, and they ordered me one of those lumbar support things that you'd put in the car.

So yeah, office decor is one of the things I take into consideration when on interviews these days.
posted by Blue_Villain at 6:11 AM on November 2, 2012 [2 favorites]


woahwoahwoahwoahwoah...wait WHAT? The state of Texas and a 'struggling suburb' just paid 72 MILLION to a THRIVING BUSINESS owned by a BILLIONAIRE to buy a brand new headquarters for himself for only 27 MILLION?

Twenty years or so ago there were two major construction projects going on in St. Louis. The de novo construction of the Transworld Edward Jones dome and the restoration of Union Station into a hotel / upscale mall complex. While the Union Station project was, square foot wise, much smaller and the buildings were already there the two projects ended up with about the same price tag, so while Rackspace bought the building for $27 mil. That's not what they paid for the facility.

Also, if this outrages you, you're leading a sheltered life. I watched town B give Wal Mart (almost exactly not like high paying jobs in the tech sector which will increase your tax base) a sweetheart deal on taxes to abandon it's current store in a town just up the road (a mile or two) where it was already getting a sweetheart deal on taxes. The difference being that the instead of taking an abandoned building off the books, the Wal Mart deal created abandoned retail space.
posted by Kid Charlemagne at 6:12 AM on November 2, 2012


How great can it be to work for a multimillionaire who is too cheap to live in a proper house, and whose first thought to furnishing a workplace for employees is to provide card tables and folding chairs?

Tales of extreme frugality are part of the mythos of the tech industry. The Amazon Door Desk, which started off a bit iffy, after all, why do you have expensive engineers assembling their own desks, and quickly became ridiculous.

Check out this"lean" startup with very fancy door desks. You don't really save much when you have to strip paint off your $20 recycled door.

Of course stuff like this isn't unique to the tech industry. My mom told me a story that one of her departments was processing very few requests. She found that they had to stamp each response, but the department only had one stamp. People spent hours waiting for the stamp and even concocted a complex stamp scheduling system. She simply bought everyone their own stamp.

Re-purposing buildings is really not uncommon in cities. I can't even count the number of buildings that were once grand banks, with 50 foot high ceilings that are now drug stores. Only in places where new construction is cheaper than remodeling would this be news.
posted by Ad hominem at 6:49 AM on November 2, 2012


so while Rackspace bought the building for $27 mil. That's not what they paid for the facility.

That's a good point that isn't always mentioned in stories like this. It was a fixer-upper. The previous owner(s) failed at whatever they were trying to do with the property to the point that they would rather have $27m than keep the property. Then the Rackspace guy had to spend money to convert the property and move his operation. It probably did cost less than moving into a pre-furnished space, but probably not by all that much.

There are lots of scenarios all over where someone sells their albatross cheaply to someone else who thinks they can do better. That's one of those human nature things, I think.

I don't like the idea of communities doing tax abatements to lure business either. But I also don't like the idea of abandoned property and losing business to other areas. I'd like for there to be laws that prevent monkeying with property taxes like that, but until that happens, we have to make the best of it.

I'm sure the community will recoup some or all of that $72 million they invested.
posted by gjc at 6:54 AM on November 2, 2012


Re-purposing buildings is really not uncommon in cities. I can't even count the number of buildings that were once grand banks, with 50 foot high ceilings that are now drug stores. Only in places where new construction is cheaper than remodeling would this be news.

This is one of the problems that creates sprawl. I can see both sides of it- why put a headquarters in a city enter when there is no upside to it? Things cost more, you have to make compromises, and refits cost more than newer, cheaper building methods.

The problem, as I see it, it that urban planning is really hard to do right. Especially when you have the mistakes of previous generations to contend with.
posted by gjc at 7:04 AM on November 2, 2012


why put a headquarters in a city enter when there is no upside to it? Things cost more, you have to make compromises, and refits cost more than newer, cheaper building methods.

I think there are deeper reasons as well. I don't think it is a coincident a guy who's family owns shopping centers all over the world decided to buy a shopping center for his company. I think he probably has unique knowledge of how to deal with that kind of space, and which firms to hire for mall rehab work. It is also kind of funny, and if rackspace fails as is, he can reopen the mall.
posted by Ad hominem at 7:10 AM on November 2, 2012


Symantec Corporation used to house their call center in a Dead Mall in Eugene Oregon, there was an escalator to nowhere in there.

check it out
posted by NiteMayr at 7:18 AM on November 2, 2012


I was there three weeks ago. All the stories are true.

On a tour of the office, we stop at the slide. 'Hey spamguy, you should go down,' my boss urges me. Trying to pose as a mature adult and not the eternal six year-old I actually am, I turn him down. On the inside I am crying to go.

After repeated pressurings I finally agree. I hop in and lift my feet to reduce friction. Immediately the rubber soles of my shoes stick to the ceiling and my body turns around. I tumble the rest of the way down, hitting the slide walls at every opportunity.

I am now identified at my office as the guy who fails at sliding by my boss, the company CTO, and our Rackspace rep. Dammit.
posted by spamguy at 7:22 AM on November 2, 2012 [7 favorites]


Check out this"lean" startup with very fancy door desks.

That link is hilarious. Cargo-cult "leaness" by designer "frugality".
posted by bonehead at 9:22 AM on November 2, 2012


Check out this"lean" startup with very fancy door desks.

They spent $40 for per desk for the door, another $10 per desk for some 2x4s, and maybe $80 total for various finishes and varnishes. The labor was their own, and presumably free. That's supposed to laughable?

Sounds economical and fun, and the results are both practical and attractive. I wish I could get something like that for under a hundred bucks.
posted by jsturgill at 9:27 AM on November 2, 2012


The labor was their own, and presumably free

The labor isn't free. It comes at the cost of working on their product.
posted by Ad hominem at 9:43 AM on November 2, 2012


The labor was their own, and presumably free.

Labor is never free, yours or anyone else's. There's an opportunity cost if nothing else. If your $75/hr (total comp.) junior engineers are building desks rather than designing products, that's a huge cost.

Still, they're nice desks.

If you did it as a semi-recreational team-building type thing it might even be a justifiable expense. But for most companies it's probably a hell of a lot cheaper just to order desks from a furniture place and have them assembled by laborers who specialize in doing that.
posted by Kadin2048 at 9:50 AM on November 2, 2012 [3 favorites]


Just to clarify, I see things like this all the time. Very often a company will balk at spending X on a component because it is too expensive but then engage developers, QA and PMs to clone the component. The TCO is much higher. You are just doing budgeting magic to trade one type of expenditure for another.

I'm not denying they look nice, but I don't see building your own desks as any different.

I do have one issue, I think having the legs stick out is a mistake, I would trip over that 50 times a day.
posted by Ad hominem at 9:55 AM on November 2, 2012


Penzys Spices is looking to do the same thing with the old Northridge Mall in Milwaukee.
posted by look busy at 10:13 AM on November 2, 2012


Aren't startups and small businesses in general exactly the kind of situation where you make that kind of trade: outsized time investment in order to shave off costs? There's a reason starting a small business is often described as a special kind of hell, and it's not because you get to make very reasonable calls on where you spend your oh-so-valuable time.

The kind of energy expended on physical work like this is entirely different from the kind of energy expended working on code. There are even a few hours every day where it's nearly impossible to network effectively, but entirely possible to spend an hour sanding some doors.

Without any evidence to the contrary, I don't think it's correct to conclude that working on the doors in any way precluded them from working at peak efficiency on their core competency.

Besides, the whole project could, after the system was refined, be knocked out in a single weekend. A weekend spent hanging out with ones family and friends, having a good time, enjoying a necessary break from the work week that also directly added necessary assets to the business. Seems like a smart move, not an inability to perform basic arithmetic.

Hell, just being able to include it in one single puff PR piece probably more than outweighed any inefficiencies in the process or opportunity costs (which I'm not convinced existed in any meaningful way).
posted by jsturgill at 10:17 AM on November 2, 2012


Symantec Corporation used to house their call center in a Dead Mall in Eugene Oregon, there was an escalator to nowhere in there.

And now Symantec is in a purpose built building in adjoining Springfield, Oregon. It is a very nice building and at least half empty as they expand their business. They just recently completed a seismic retrofit to qualify for secure data center status for something or other.

In related re-purposing news, the cd factory next to the Symantec building has been re-purposed to the medical labs for the new regional hospital in Springfield, next to the re-purposed packaging/printing building for the cd cases that now makes sports apparel. And Springfield has a few more of these re-purposed buildings and industrial/commercial zones around.

This is all relevant because Springfield worked with the companies looking for new spaces, including some tax breaks, giving up near term taxes and exactions for long term employment benefits, infrastructure dollars and higher property tax revenues.

Oregon also has some really, really great land use laws that really help prevent sprawl and encourage reuse of old buildings and lots. Mostly an urban growth boundaries and generous credit for previous use in development/impact fees (mandated by state laws). After working in engineering/land planning in Arizona (the poster child for sprawl being bad-the only thing that makes it better than Texas is all the public lands that work as a de facto urban growth boundaries in many areas) it was a relevation to see how it could be done right, or at least semi sanely.

Also we don't have a sales tax here so no one really cares where the retail space is located after it is built-the only bite on that revenue is state wide and some (fairly small in relevant terms) development fees on new built square footage. Tax incentives can work to cure a lot of problems and still make everyone a winner.
posted by bartonlong at 10:19 AM on November 2, 2012


Aren't startups and small businesses in general exactly the kind of situation where you make that kind of trade: outsized time investment in order to shave off costs? There's a reason starting a small business is often described as a special kind of hell, and it's not because you get to make very reasonable calls on where you spend your oh-so-valuable time.

Sure, and It isn't a big deal. I'm not trying to make out like it is corporate malfeasance or something. I'm just saying it isn't really cheaper. Maybe more fun and cooler, but not cheaper.

It also reminded me of a crazy dotcom story that happened to me. I was a young programmer writing coldfusion code for way more than a 20 year old should be making. We just got new offices and for some reason the CTO balked at buying CAT5 cables. Maybe he was just playing games, maybe he was an idiot but he decided our sole sysadmin and I would make all the cables by hand.

We sat in a room with a spool of CAT5, two crimpers, whatever those jack pieces are called, and the worlds shittiest cable tester. Starting out, I was only able to make a handful of good working cables an hour. Cutting the cable, stripping the ends, putting the wires into the connectors, crimping them, then testing. Half the time I screwed something up and had to redo it. Our sysadmin was much better and got it down fast. He was making like 10 cables an hour. All the cables tested ok. For some reason we did this for days and days, made more cables than we could possibly need.

Fast forward a few weeks and people were complaining that they kept losing internet connectivity. By this time I was back to writing code but our sysadmin kept me in the loop. He became convinced the drops, installed by electricians, were bad. He bought a $600 fluke test unit and tested all the drops. By this time, he was at his wits end. He was very close to losing his job, he was frantically trying everything possible. Replacing NICs, drivers, reinstalling windows. I suggested perhaps our ghetto homemade cables were at fault, of course he believed this could not be so. We had tested every cable with a tester and they all passed. I was not one to lose an argument so I walked to the nearest Radio Shack, bought a patch cable, plugged it in to a computer, ran it to the drop, and everything worked flawlessly.

Turns out our POS tester must not have been very sophisticated. When we re-tested our cables with the new $600 Fluke tester it turned out our POS tester had passed hundreds of cables that wouldn't work. We had to replace all our homemade cables with store bought ones. We never had any more network issues.
posted by Ad hominem at 10:43 AM on November 2, 2012 [5 favorites]


Ha! A few years back when I was chaperoning a high school band trip to San Antonio, we pulled into the parking lot of that mall (like we had for several years previously) with the plan to drop 300+ kids off to eat at the food court. Unfortunately, that was the year the mall closed. I'm glad something went in there, but man, that put us in a bind with all those hungry band nerds.
posted by Doohickie at 10:49 AM on November 2, 2012


As a team-builder I can see building desks or tables sure, but thirty minutes at a used office furniture store will see you outfitted with desks, chairs, cabinets for similar or less. Sure it will be ugly faux wood or grey melamine, but looks aren't important right?
posted by bonehead at 10:55 AM on November 2, 2012


Surely looks are important. The office pictured in the article looks bright and open. Coders have giant, clean, beautiful surfaces to work on. That will make them happier and more productive, for a pittance compared to their salary and the value you hope they'll be bringing in.

The space would also be amenable, with the nice shiny door tables, to an impressive walkthrough or visit from a major client or similar. For the same ballpark cost as the used furniture place.

Going with crappy used office furniture costs you all that, plus one or more puff pieces, plus a potentially shorter lifespan for the furniture. Seems like a bad trade compared to the door tables.
posted by jsturgill at 11:26 AM on November 2, 2012


See, the thing is that a lot of us believe that city governments should not be competing in a race to the bottom to be the best bidder for corporate perks. We believe that the role of government should be to provide the best service and protection to its citizens.

When City X and City Y both bid against each other, that creates a Zero Sum game and one city loses. Well, great, right? Competition inspires improvement. Both winner and loser learn lessons that will help them adapt for the next competition. Both winner and loser will be trained to provide cheaper bids next time. Wonderful! Both cities are better able to meet the objective of the competition. What was that objective again? Oh, right, the objective is to be a better shill to provide cheap spaces for business corporations.

That's funny, we're engaging government in a lean, mean iterative training program to make them better, cheaper, and more adaptive to their corporations.

I want governments to adapt and evolve, but when you're training a complex system (be it biological, AI, organizational or social) you need to pick the right fitness criteria or else you end up with shit. The fact is that the majority of state and local governments in the US are newly, constantly on the verge of bankruptcy and always answer that by cutting long-held services from ed to parks to libraries to truly essential stuff like police and fire... and meanwhile competing to provide sweetheart deals to corporations to undercut other localities... That tells me that the standards by which local governments work together and are held accountable are totally broken.
posted by Skwirl at 2:54 PM on November 2, 2012 [1 favorite]


We had to replace all our homemade cables with store bought ones. We never had any more network issues.

Well, cables are so cheap these days, just a couple of bucks, that's it's silly to make them yourself. You're competing with super-specialized machines that make squillions of the dumb things, so you can't possibly hope to match their quality, and you're hardly saving any money, typically only two or three bucks a drop. If the cable doesn't work, you may lose a bunch of additional hours, in addition to the time you invested making it. Not a good trade to save three bucks. (When cables were $30 each, it wasn't nearly as bad an idea.)

But making a desk, when you're short on money but long on manpower, makes perfect sense. Many of those small startups are barely paying their staff anything at all, the absolute minimum possible to keep them fed and housed, usually in pretty ghetto conditions, trying to survive long enough to build a marketable product. And getting a desk of the size and quality of those door units would cost at least $500, where they can build them for $80 plus labor. Multiply that times ten desks, and that's $4000 -- which is a small server they can run their code on, or minimal pay for a couple of person-months, enough to keep them alive, and at the keyboard, trying to make their stock options pay off.

This is completely stupid for pretty much any functioning business, but almost by definition, startups are not yet functioning. If you put in a week of labor by two people to build desks, and in exchange you get 8 additional work weeks before running out of money and collapsing, then you're ahead by six weeks, and that might be the time you needed to finish the demo for the VC people.
posted by Malor at 11:42 PM on November 2, 2012


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