Google Gets the Green Light to Build Multi-Billion Dollar Megacampus in San Jose

  • The San Jose city council has approved Google's big plans for a mega campus that's been in the works for the last four years.
  • Construction may begin as soon as next year, but the campus will still take around a decade to fully build.
  • It's Google's first mixed-use campus and aims to be a model for other tech campuses as soaring real estate prices drive growing alienation toward tech companies.

San Jose city officials on Tuesday night officially approved a plan for Google to build a massive campus in the heart of California's third-largest city.

For its "Downtown West" project, Google will develop 80 acres of land in downtown San Jose, including 7.3 million square feet of office space for 20,000 workers and thousands of housing units. It's Google's first mixed-use campus and will be one of its largest when completed. The San Jose city council unanimously approved the company's plans Tuesday evening and several council members held back tears while doing so.

The approval comes as Google aims to model a shift away from closed-off tech campuses to stem the growing alienation toward tech companies, whose success has contributed to a shortage of affordable housing and big cultural shifts in Silicon Valley and other tech hubs. Google, which is doubling down on bringing workers back to offices amid the weakening pandemic, is also planning another massive, town-like hub just 10 miles up the road in Mountain View.

"There's tremendous mistrust of the government and suspicion of Big Tech and it could have been easy for many of our community members simply to succumb to slogans and  simplistic thinking but thousands rolled up their sleeves," San Jose mayor Sam Liccardo said at Tuesday's meeting. "Rather than jump in one camp or another, community members pushed and prodded, and urged the city and Google to stretch and reach higher."

Liccardo continued, thanking community groups, Google, and parent company Alphabet's finance chief Ruth Porat and SVP Kent Walker, who he said "we're committed to seeing this through." 

"We'd like to thank the City and community for years of engagement and true partnership," said Google's San Jose Development Director Alexa Arena in a statement Tuesday night. "Together, we have created a foundation for an equitable and environmentally focused place that represents the best of San Jose and Google."

The Downtown West campus will include 4,000 housing units, 1,000 of which will be designated for a range of "affordable" housing. In the city of San Jose, "extremely low-income" qualifiers — the bottom range of low-income housing — earn 30% of the average medium income. Exact housing prices haven't been determined yet, officials said.

Downtown West will also include up to 300 hotel rooms and 800 residences for short-term lodging for Google's corporate guests. While Google will own all 80 acres, more than half of the project will be allocated for residential and public space and include features like parks, restaurants, retail space, entertainment space and ecological viewing stations.

Construction on the project could begin as early as next year but is expected to take between 10 and 30 years to fully build.

A four-year journey

Downtown West's approval comes after four years of planning, adjusting and earning buy-in from community and housing advocates after facing early and intense pushback for displacement concerns. Within one week of the news breaking in 2017, home prices in a three-mile radius of the site jumped 7%, growing to a 25% rise six months later, according to real estate experts.

On Tuesday night, while San Jose city council meeting was still being held, the company reached a last-minute deal with NHL team the San Jose Sharks, which was the most vocal opponent of Google's plan, complaining about the lack of proposed parking spaces for its home at the nearby SAP arena. In exchange for modifications, the Sharks agreed not to sue the city or Google. 

The Santa Clara County Airport Land Use Commission rejected the project in December, citing concerns about building heights in the airport's path but the city council's unanimous vote overrode the commission's rejection.

Google's chief legal officer and Global Affairs SVP Kent Walker joined Calif. governor Gavin Newsom last week as he hosted the signing of Senate Bill 7 at the Downtown West site, which stands to benefit from the bill that speeds up large real estate developments.

Not including office space, Google will pay more than $1 billion for infrastructure features such as parks, walkways, and preservation of historic sites. It'll also pay approximately $265.8 million in land and infrastructure fees as well as $200 million in "community benefits," which includes anti-displacement and job readiness programs. A company spokesperson said it's too early to estimate the costs of the offices.

"We're especially proud of the community fund that was created with local social equity organizations to give underserved communities a voice in where community investments should be made," Alexa Arena said in a statement. Arena said the company had conducted more than 100 community feedback sessions.

Arena said late last year that, after years of back and forth with the community, the company's goal was for "much less the corporate campus" and more "a resilient neighborhood."

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