San Jose will regret letting one company own so much of downtown.
First of all, SV is littered with large lots that were intended to be transformative developments but never happened. Yahoo owned a huge lot by Levi's stadium (it was one of the most valuable assets it listed at time of sale), and Cisco STILL has giant chunks of Coyote Valley. Both lots were intended to be transformative campus projects. Neither happened.
My guess is the same will happen with Google. They've already said they have no intention of starting construction for something like eight years (not sure why people think construction is "pending"), and between now and then a lot can happen. There is a very good chance Google hits a rough patch and no longer needs a megacampus in addition to MTV and NYC where it already has big offices. But maybe they offer to develop if the city of San Jose were to offer tax concessions? How can the city say no when half of downtown is now in the hands of one company?
Short of their headcount rising to 500k, I don't see how they can ever fill the space. They are also going crazy in other cities - the new marquee skyscraper in Austin will be a Google building (yes I know they are not the only tenant)...right next to the other skyscraper with the Google logo on it. Likewise in other cities.
I predict that the San Jose campus will be ditched. Given that HSR to San Jose may never happen or at best be delayed for years, there's no reason for Google to continue with the project (which was sold as a big "transit" focused campus). The land will be sold for a profit though.
In San Jose, they tore down a bunch of restaurants, razed a bunch of houses that people were living in to build more office buildings, then decided "nah" and stopped building the office buildings. So now we have a bunch of land that the city gave to Google for cheap that they're just sitting on, that can't be used to build houses again. The LendLease houses were an integral part of why city council approved the plan.
Is Google just desparate to expand in the Bay area? I guess its nearby to commuter rail, so there is some infrastructure, but unless San Jose starts doing many upzones, or Google includes over 10k units of housing, this will boost rent and property prices in the area.
if Google follows through on building a campus there
I wouldn't count on that. They just bought (final) some $600 million worth of real estate in North Sunnyvale.
Those parcels in San Jose were originally acquired for the ballpark that never happened, either. I suspect they offered them to Google at far below their value, as with the A's.
You joke but they already did that in San Jose. Years of the city fighting to get the project reviewed and approved and Google simply stopped just short of ground breaking and is now “reevaluating” it.
tech companies are already building campuses near the new housing
Where are you seeing such construction?
(And if you're rooting for the land between San Carlos St and Santa Clara St. east of the railway to be an employee laden Googleplex, take a good look at 280 during rush hours now even without events at the Arena).
Google is buying those parcels because the city of San Jose is corrupt and selling at a fraction of their value, just like they tried to do when those were earmarked for an A's ballpark. That doesn't mean they will use it for dense office space.
Unfortunately, the Valley is still obsessed with sprawling, inefficient campuses. I'd love to see Google build a good height building -- 50+ stories -- on the land they're buying up in north Sunnyvale, but the chances of that happening are unfortunately slim to none.
From the article:
"In a new document, the city of San Jose says that Google could pay upwards of $100 million to buy roughly 21 acres of land for its proposed mega-campus, without any subsidies."
Imagine a gigantic apartment building in San Francisco. Let's say some 400-unit monster. Then picture a campus with four of those buildings.
Then realize that such a campus could not house all the Google employees in the area. Then realize that such a campus could not house just the Google cafeteria workers in the area.
That land is trapped on the Bay side of 101 with only two ways out (Shoreline and Amphitheatre Pkwy)... both of which are already gridlocked during commute hours.
Residences there will be fine for Google workers (and the few other businesses on the bay side of 101), but it will be a nightmare for everyone else.
I think that's why the purchase price was so cheap.
I could see Google putting in a short-throw underground railroad spur or hyperloop to their campus eventually.
And yet most Bay Area techies continue to discuss these trends as something that could happen but probably won't
The train left the station years ago, Google seems to be the only company doubling-down on Commercial Real Estate in the Bay Area and they will surely also soon start to backpedal...what demand is there for their San Jose megacampus? This in addition to buying up old Cisco properties, Moffett Field, other new construction, and now the proposal of yet-another "company town" in Mountain View? Someone needs to have a talk with whoever there thinks Commercial Real Estate is a good hedge in 2020.
This is like one of those arbitrage opportunities that disappear as soon as they become public knowledge. Now that the owners think of the building as a "kingmaker," they'll demand such an exorbitant price (in stock) from startups that want to rent it that only a desperate one would take the deal. So paradoxically the one thing you can be sure of is that the next Google won't be coming out of this building.
I'm somewhat playing devil's advocate here, but isn't it better to drop new FAANG campuses in already large, expensive cities where housing will only get a couple percentage points more expensive than in, say, an affordable mid-sized city where their presence could totally destabilize the local housing market for decades?
This is what I always thought was problematic about putting a Google campus in a place like Boulder, a smallish college town with geographic constraints to new housing. Adding over 1,000 Googlers with $200-$500K total comp might as well be a tsunami for a town that size.
I think the author is correct in thinking that Google will cause him discomfort by creating this campus. Everyone in this area not employed by Google will have to move because Google is basically buying the land, directly or through its employees.
Some of Google's money will flow to locals not directly employed by Google, but will this offset the increased cost of their living expenses?
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