Computer Sciences Corp. ready to negotiate sale of downtown building

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 the 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 Evins, 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.

Evins 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.

Five of the six 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.

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source: bizjournals.com