City enticing Sigma to move

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San Antonio-based Sigma Solutions Inc. is close to a deal to relocate its headquarters to the city's core.

City Council approved an ordinance Thursday that awarded Sigma Solutions a $500,000 economic development grant to move downtown. The incentive comes as the city works to reinvigorate the urban core by getting more companies to locate in the area.

Sigma Solutions is under contract to lease space at the former Broadway Bank building at 425 Soledad St., said John Flores, vice president of marketing and business development for the company. It's not certain when the deal will close, but Flores added that as soon as it does, the company would begin the move.

Per the ordinance, the funding will be disbursed over a three-year period. Sigma Solutions is required to lease the property for at least 10 years and to hire an additional 20 employees over the three-year period. Flores expects that the company will fulfill its employment commitment even before making the move, growing from about 40 workers currently to 60.

Sigma Solutions is moving because it has outgrown the space near the airport that it has occupied since the early 1980s. It won't lease the entire 70,000-square-foot space but will move into three floors there, he added.

Plus the company wanted to be a part of the urban revitalization occurring downtown, Flores said.

“It's an opportunity to reinvigorate the whole downtown area, especially around technology.”

When it comes to downtown, there's a deliberate push to bring technology companies to the area, said David Barnett, a strategist at the consulting firm The Simon Group. Already there are various startup companies with offices at the Weston Centre's Geekdom, a collaborative workspace for tech-centric businesses. Other tech companies located in the downtown area include Web and mobile application development firm Sweb Development and the colocation and data center CityNAP.

Downtown makes sense for IT firms because it has a robust Internet and electrical infrastructure, Barnett said. Plus the historic buildings give IT companies a chance to create unique, funky workspaces, he added.

“We have a large nerd and geek community,” he said. “A tech-type of person wants to be in an urban environment. They want to live and collaborate with like-minded people.”

Despite the push, the downtown office market has struggled. During the second quarter, the vacancy rate for downtown office space was 34.3 percent, more than 13 percentage points higher than the city average, according to data from commercial real estate firm NAI REOC San Antonio. Also adding to the difficulties are issues that companies encounter, such as minimal dedicated parking and dated office stock. But the city's push for more residential development downtown helps counter that, said Ben Brewer, president of the Downtown Alliance.

“As we grow the residential population in and around downtown, it becomes more attractive for companies to locate downtown where they now have a good employment base to draw from.”

Sigma Solutions helps businesses optimize their data center operations. In July, Toronto-based Pivot Acquisition Corp. inked a deal for Sigma Solutions. Pivot has its U.S.-based headquarters in Austin. To retain the jobs and company in San Antonio, the city approached Sigma Solutions about the incentive package before the acquisition was complete, according to council agenda documents. Sigma Solutions will remain a separate company and operate as a subsidiary of Pivot, Flores said.