Googles 80 hektar store San Jose mega-campus er sat i bero, da virksomheden regner med økonomisk afmatning

I juni 2021, Google vundet godkendelse to build an 80-acre campus, spanning 7.3 million square feet of office space, in San Jose, California, the third-largest city in the country’s most populous state. The anslået økonomiske konsekvenser: 19 milliarder dollars.

Timingen kunne ikke have været værre.

relaterede investeringsnyheder

Vil du investere i AI-boomet? Veteran tech fund manager navngiver 4 aktier at eje

Ganesh Rao

for en dag siden

Meta and Disney begin cutting jobs. Here’s a rundown of all Club names planning major layoffs

Paulina Likos

for en dag siden

Et tiår langt tyremarked inden for teknologi var lige ved at gå sin gang, og det følgende år ville markere værste for teknologiaktier siden 2008 financial crisis. Rising interest rates and recessionary concerns led advertisers to reel in spending, shrinking Google’s growth and, for the first time in the company’s history, forcing management to implement dramatic cost cuts.

Byen San Jose kan nu være paying the price. What was poised to be a mega-campus called “Downtown West,” with thousands of new housing units and 15 acres of public parks, is largely a demolition zone at risk of becoming a long-term eyesore and economic zero. CNBC has learned that, as part of Google’s downsizing that went into effect early this year, the company has gutted its development team for the San Jose campus.

The construction project, which was supposed to break ground before the end of 2023, has been put on pause, and no plan to restart construction has been communicated to contractors, according to people familiar with the matter who asked not to be named due to non-disclosure agreements. 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.

The Mercury News, one of Silicon Valley’s main newspapers, tidligere rapporteret at Google revurderede sin tidslinje. Kilder fortalte CNBC, at virksomheden begyndte at signalere til entreprenører i slutningen af ​​sidste år, at projektet kunne stå over for forsinkelser og ændringer.

I februar afskedigede LendLease, den ledende udvikler af projektet, 67 medarbejdere, inklusive flere community engagement managers, ifølge arkiver set af CNBC. Senior udviklingschefer, en chef for forretningsdrift og andre ledere var blandt dem, der blev sluppet.

Sidste måned fjernede Google også byggeopdateringer fra sin hjemmeside for projektet, ifølge intern korrespondance set af CNBC.

A LendLease spokesperson said in an emailed statement that the company remains “committed in the creation of thriving mixed-use communities in the Bay Area, including the Google developments,” and still has a “significant team to aid in delivering these communities.”

Alfabet-ejede Google er i gang med sine mest alvorlige omkostningsbesparelser i sine næsten to årtier på det offentlige marked. Virksomheden sagde i januar, at det var det fjerne 12,000 arbejdspladser, der repræsenterer omkring 6 % af dens arbejdsstyrke, for at regne med en aftagende salgsvækst, efter at antallet af medarbejdere voksede før og under Covid-pandemien.

For omkring et år siden, Google annoncerede at det ville investere næsten 10 milliarder dollars i mindst 20 centrale ejendomsprojekter i 2022. På det tidspunkt havde virksomheden allerede afsluttet en stor del af sin flerårige landvinding i downtown San Jose til det fremtidige campus.

Things changed in a hurry. On Alphabet’s fourth-quarter indtjening call, i februar, sagde finanschef Ruth Porat, at virksomheden forventede at pådrage sig omkostninger på omkring 500 millioner dollars i første kvartal for at reducere globale kontorlokaler, og hun advarede om, at andre ejendomsafgifter var mulige i fremtiden.

Mens teknologiindustrien generelt kæmper for at tilpasse sig en post-Covid-verden, der ser ud til at være mere hybrid og mindre centreret omkring store campusser, er Google på et særligt usikkert sted på grund af sit massive engagement, økonomisk og på anden måde, til at ændre landskabet i et større byområde.

“We’re working to ensure our real estate investments match the future needs of our hybrid workforce, our business and our communities,” a Google spokesperson said in an emailed statement. “While we’re assessing how to best move forward with Downtown West, we’re still committed to San Jose for the long term and believe in the importance of the development.”

Google brugte flere år på at planlægge San Jose-komplekset og investerede betydelige ressourcer i at vinde lokalsamfundet. Modstanden i nogle hjørner var så hård, at i 2019, aktivister chained themselves to chairs inside San Jose’s City Hall over the decision to sell public land to Google. A multiyear effort to address community concerns ended with support from some of the project’s stiffest early opponents.

For at vinde over fællesskabet, Google udpeget mere end halvdelen af ​​sin campus til offentlig brug og tilbudt en $ 200 millioner samfundsydelsespakke, der omfattede fordrivelsesmidler, jobformidlingstræning og magt for lokalsamfundsledere til at påvirke, hvordan disse penge ville blive brugt.

While some community benefits have already been delivered, the bulk is to be given out upon the development of the office space. Google also promised to build 15,000 residential units in Silicon Valley, with 25% of them considered “affordable,” a critical issue in an area with one of the highest homeless populations in the country, according to regeringens statistik. Omkring 4,000 af disse boligenheder skulle bygges i Downtown West.

“We all originally knew that it’s going to be a long-term plan,” San Jose councilmember Omar Torres, who represents the downtown area, told San Jose Spotlight in February. “But yes, it’s definitely concerning that a lot of the money is coming when the cranes are in the air.”

The demolition phase of the project took out a number of historic San Jose landmarks and forced the relocation of others. A 74-year-old dancing pig sign for Stephen’s Meat Products had to be moved, and only a small part of an old bakery building remains.

Patty’s Inn, an 88-year-old beloved pub, didn’t survive the teardown.

“This is a dive bar, but I never thought of it as a dive bar. It was just Patty’s Inn,” Jim Nielsen, an executive at RBC Wealth Management and longtime patron of the bar, fortalte Mercury News at the time. “It’s tough to see these places go away because they can’t be replaced.”

Det nye campus forventedes at bringe omkring 20,000 arbejdspladser til byen.

CNBC besøgte stedet et par gange i april i løbet af den normale arbejdsdag for at se jordstykker, hvor gamle bygninger er blevet erstattet af kraner, traktorer og andet entreprenørudstyr i et indhegnet område. Ingen arbejdede på stedet.

Byggeprojekter af denne skala tager lang tid. Google havde oprindeligt sagt, at det sandsynligvis ville tage mellem 10 og 30 år at bygge campus ud, så det stadig har en betydelig pude til at genoptage udviklingen.

LendLease said in 2019 that it struck a $15 billion deal with Google to spend the next 10 to 15 years redeveloping the company’s landholdings in San Jose as well as nearby Sunnyvale and Mountain View, where Google is headquartered.

“LendLease will play a key role in helping deliver at least 15,000 new homes on our land,” David Radcliffe, Google’s real estate lead at the time, said in a press release.

But Radcliffe left Google in late 2022 after 16 years at the company. He was replaced by Scott Foster, who previously led global real estate for financial firm RBC. Sources familiar with Google’s real estate projects described Foster as someone who is expected to be more conservative in spending and more likely to slim down the scale of the campus, especially amid cost-cutting efforts.

Da byggeriet på stedet i øjeblikket er gået i stå, sidder San Jose uden en forventet ankerlejer i et tomt område af byens centrum. Snesevis af leverandører og entreprenører, der forventede arbejde, fokuserer på andre projekter, mens de venter på at høre, hvad der derefter sker.

Stemningen er vidt forskellig fra, hvad den var for mindre end to år siden, da guvernør Gavin Newsom stod ved siden af ​​Google Senior Vice President Kent Walker ved et arrangement i San Jose forud for et byrådsmøde, der skulle afgøre, om projektet blev godkendt. Newsom anvendte anledning til skilt SB 7, et lovforslag om at fremskynde byggeri af boliger og udviklingsprojekter.

Newsom and officials cited Google’s proposed mega-campus several times as an example of the state’s economic “comeback” from the Covid pandemic.

HOLDE ØJE: Alphabet remains ‘fabric of the internet’