Tellabs Dumping 127,000 SF onto Round Rock Market

ROUND ROCK-The latest corporate shutdown in Central Texas snatches more than 400 jobs from Round Rock’s economy and throws a chunk of manufacturing space on the local market. Tellabs Inc., a telecommunications equipment maker, said it will shut its Round Rock manufacturing facility as part of a corporate restructuring that will cut 1,000 jobs.

The Round Rock property consists of a 127,000-sf building situated on 75 acres just east of Interstate 35. The building houses manufacturing and administrative functions. The company, based in Naperville, IL, has had operations in Round Rock for about 20 years and the average employee tenure was 10 years.

The job cuts and closing are fallout from the general cratering of the telecommunications market that has struck companies from AT&T Corp. to XeTel Inc., based in Austin. Tellabs said the cuts will allow it to align expenses and assets with reduced spending by communications carriers.

The company has begun to consider what to do with the property, which it owns. It could sell or lease it, Robin Urbanski, a spokeswoman, tells GlobeSt.com.

Either way, the closing adds to the growing inventory of space in the Round Rock market, according to Jerry Heare, an industrial specialist with NAI/Commercial Industrial Properties Co.

Furthermore, Tellabs had been an important player in Round Rock’s economy. “Tellabs has been a stalwart of economic foundation of Round Rock, even long before Dell Computer came in and took over,” Heare says. “And it represented some diversification. So that’s got to be a disappointment to the community.”

The space will have significant impact “at least in the Round Rock area,” he says. He estimates Round Rock has up to 600,000 sf of industrial space for lease or sublease.Round Rock Mayor Robert Stluka tells GlobeSt.com that the city is sad to see Tellabs go, but he understands the business reasons behind the decision. The company told him, he says, that other US manufacturing locations have other operations that make them more valuable to the company.

Stluka says Round Rock, beginning to implement a new economic development plan, will include the Tellabs site in its efforts. “We’re out hustling new business to come into Round Rock,” he says. “In that light, we’ll have this piece of property to put on the market as well when we talk to these other companies.