Google has been gobbling up bigger and bigger chunks of Silicon Valley for as long as we’ve been reporting on the company, but it may be pulling back from its biggest development yet — after even small parts of San Jose with the ground.
CNBC reports that after the first phase of demolition, 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 residential units, 50,000 square feet of retail and cultural area, and 15 acres of parks. The city believed the project could reach a value of $19 billion and provide 20,000 jobs after more than a decade of work.
Google is not denying the report, and spokesperson Bailey Tomson provides this statement to The Verge:
As we’ve said, we’re working to ensure our real estate investments match the future needs of our hybrid workforce, our business and our communities. As we consider how best to move forward with Downtown West, we remain 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 bit of a hiatus” to “we’re not interested in doing it anymore”, Tomson meant us this too San Jose Mercury News story that suggests Google is just changing the timeline, and where quoted company executives and development directors seem hopeful that it’s just a hiatus.
CNBC seems a little less hopeful, pointing out that Google is currently trying to reduce its office space rather than expand it, to the point that it will incur half a billion dollars in costs this quarter. The company cut 12,000 jobs in January. Google’s general contractor also appears to be out of work indefinitely: it has laid off more than 60 employees, with sources informing the publication that they have not been told when construction can resume.
“While sources are optimistic that a campus will be built at some point and said Google representatives have expressed a commitment to it, they are concerned that the project may not reach the scale promised in the original master plan,” CNBC write.
San Jose Mayor Matt Mahan downplayed CNBC story to local reporters today, saying he had just had a call with Google to confirm nothing had changed beyond reconsidering the timeline for construction, according to a video recording provided by his office to The Verge. However, he did not say how long the reassessment might take or when Google might resume.
“That, as far as we understand, remains their commitment”
“Google remains fully committed to San Jose for the long term, and San Jose remains fully committed to Google,” Mahan said. “Google has a 30-year development agreement on its 80 hectares 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 move faster or slower depending on Google’s hiring needs, and that the city of San Jose cannot dictate when a property owner builds new office space.
“Over time, as the economy expands and Google grows again and they hire again, you’ll see them move forward Downtown West, I think, and as, as far as we understand, that’s still their commitment,” he said.
San Jose Economic Development Director Nanci Kline confirmed the halt in construction to Silicon Valley Business Journalbut 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 many concessions and pitching the entire campus as a new neighborhood, before the project was approved in 2021.
Update, 10:44 p.m. ET: Added comments from San Jose Mayor Matt Mahan and San Jose Business Development Director Nanci Kline.