The Teacher Retirement System of Texas has paused its controversial plans to move into the Indeed Tower in downtown Austin.
The investment staff was in the process of moving into the brand new three-floor space earlier this month but came under fire from local officials and TRS members after the hefty rental price was revealed. At TRS’s Thursday meeting, the board discussed the blowback, noting that it got 3,506 comments on Facebook on its upcoming move to Indeed Tower. The retirement system also noted that 21 news stories had been written about the issue.
The board voted to approve a plan at the meeting for the TRS board to negotiate a lease renewal at its current location while beginning the process of subleasing its space at the Indeed Tower.
One comment from a TRS member was highlighted in the board’s presentation. “It is shameful that our money is spent for the luxury of those who are entrusted with our future while retired teachers must go without what they deserve,” the comment said. “Needless to say, we are all furious. Do something about it.”
TRS maintained that the move to Indeed Tower was predicated on a few things, including the need for more space for its investment team and a desire to attract talent from other parts of the country. The presentation showed that TRS has projected that adding members to its investment team could “save $1.4 billion in fees and carried interest.”
But, according to the presentation, things have changed at the current office location — 816 Congress Street — that have made it a more suitable place for TRS’s investment team to stay.
More space at 816 Congress has become available, which wasn’t the case when the Indeed Tower deal had been negotiated previously. And, according to the presentation, the 816 Congress landlord has agreed to work with TRS on an expansion.
Rent at 816 Congress would be lower than the TRS’s new digs: $34 per square foot, as compared to Indeed Tower’s $38.50 per square foot.
“If we stay at 816 Congress, the cost to refit the space is lower than the Indeed Tower,” said Eric Lang, senior managing director of external markets for TRS at the Thursday meeting.
These factors made staying at 816 Congress more palatable, although subleasing the Indeed Tower space wouldn’t be without challenges, the presentation showed.
[II Deep Dive: Lawmakers to Texas Teachers: Austin, We Have a Problem]
According to Lang, TRS would have to pay the costs of subleasing the space. TRS would also have to seek approval from the landlord before subleasing.
“Our lease will start whether we have a subtenant or not,” Lang said during the meeting.
But, the board agreed, looking into a sublease would be worth it. The board approved a resolution that will allow TRS to negotiate a seven-year contract at its existing space and to pursue the sublease.