Google has been gobbling up bigger and bigger patches of Silicon Valley for as long as we’ve reported on the company, but it may be pulling back from its biggest development yet — after razing small parts of San Jose to the ground.
CNBC reports that following the first demolition phase, Google has halted construction on its “Downtown West” campus, which was slated to turn 80 acres of downtown San Jose, California into 7.3 million square feet of offices, 4,000 housing units, 50,000 square feet of retail and cultural space, and 15 acres of parks. The city believed the project could reach a value of $19 billion and offer 20,000 jobs after more than a decade of work.
Google isn’t denying the report, with spokesperson Bailey Tomson providing this statement to The Verge:
As we’ve stated, we’re working to ensure our real estate investments match the future needs of our hybrid workforce, our business and our communities. While we’re assessing how to best move forward with Downtown West, we’re still committed to San José for the long term and believe in the importance of the development.
While that statement could mean anything from “we’ve had a minor pause” to “we’re not interested in doing it anymore,” Tomson also pointed us to this San Jose Mercury News story which suggests that Google is merely changing the timeline, and where quoted business leaders and development directors seem hopeful that it’s merely a pause.
CNBC seems a little less hopeful, pointing out that Google is currently trying to reduce its office space rather than growing it, to the point it’ll incur costs of half a billion dollars this quarter. The company cut 12,000 jobs in January. Google’s chief contractor also appears to be out of work for an indefinite period: it has laid off over 60 employees, with sources informing the publication they haven’t been told when construction might continue.
“While sources are optimistic that a campus will be built at some point and said Google representatives have expressed a commitment to it, they’re concerned the project may not reach the scale promised in the original master plan,” CNBC writes.
San Jose Mayor Matt Mahan downplayed the CNBC story to local reporters today, saying he’d just gotten off a call with Google to confirm nothing had changed beyond reassessing the timeline for construction, according to a video recording provided by his office to The Verge. He did not, however, say anything about how long the reassessment might take or when Google might resume.
“That, as far as we understand, is still their commitment”
“Google remains fully committed to San Jose in the long term, and San Jose is fully committed to Google,” said Mahan. “Google has a 30-year development agreement on its 80 acres around Diridon Station, and they have a lot of flexibility built into that plan.” Later in the briefing, he added that the project was always designed to go faster or slower depending on Google’s hiring needs, and that the City of San Jose can’t dictate when a property owner builds new office space.
“Over time, as the economy expands and Google’s growing again and they’re hiring again, you’re going to see them move forward Downtown West, I think, and as that, as far as we understand, is still their commitment,” he said.
San Jose economic development director Nanci Kline confirmed the halt to construction to The Silicon Valley Business Journal, but said that out of the layoffs at Google contractor Lendlease, only one person was cut from the Google Downtown West team.
The San Jose campus was controversial from the start and even spurred protests: Google spent four years convincing the city, making numerous concessions and pitching the whole campus like a new neighborhood, before the project was approved in 2021.
Update, 10:44PM ET: Added comments from San Jose Mayor Matt Mahan and San Jose business development director Nanci Kline.
