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Stage is set for an Austin rebound

Kathy Warbelow

Five years ago, Rackspace Holdings Inc. opened an Austin sales office with a handful of workers.

The San Antonio Web-hosting company now has nearly 300 Austin employees - including engineers and software developers - and expects to grow to 1,000 workers within the next two to three years.

Austin's deep pool of talent has helped it attract dozens of new employers, large and small, in the past year.

Homegrown companies are expanding as well, ranging from the Alamo Drafthouse, a unique chain of dinner-and-a-movie theaters, to Cirrus Logic, a chip design firm that is building a new downtown headquarters for its workforce of nearly 400.

Those companies are energizing the Central Texas job market and helping set the stage for another Austin rebound.

In the past year, the region has seen job growth pick up, car sales accelerate and apartments fill up with newcomers from elsewhere in Texas and from other states.

Austin registers well on most economic measures, including new jobs, retail growth, and home price appreciation.

But the strength of its economy also shows up in other ways: In the past year, for example, both Fiat and Rolls Royce chose Austin for new dealerships.

Starwood chose Austin for one of its trendy upscale W Hotels, which opened last December downtown.

And in one of the biggest developments, Formula One racing is planning to come to Austin in 2012 - the first new U.S. city to join the international race circuit since 2007.

Hundreds of workers are building what is expected to become a $400 million racetrack, conference and entertainment complex in eastern Travis County.

There are some "secret sauce" elements to the Austin economy.

One is the University of Texas, which - along with five other colleges and universities - refills the talent pool with a flood of new graduates each year.

Another is a deeply embedded entrepreneurial spirit that helped create local giants such as Dell Inc., Whole Foods Market Inc. and Keller Williams Realty, the nation's second-largest real estate franchise firm.

That spirit continues to spur the creation of new companies in fields as diverse as medical devices, technology and financial services.

"What sets Austin apart is its entrepreneurial culture that welcomes new people and new ideas, with technology veterans who are willing to share their time and their expertise," says Karen Bantuveris, founder and CEO of Volunteerspot.com, which helps PTAs, booster clubs and other school and community groups organize volunteers using a simple online system.

Largest public and private employers in the area

1. Austin school district

2. City of Austin

3. Dell Inc.

4. Federal government

5. Freescale Semiconductor Inc.

6. IBM Corp.

7. Seton Family of Hospitals

8. St. David's HealthCare

9. State of Texas

10. University of Texas

Source: Greater Austin Chamber of Commerce