Google’s massive San Jose campus is suspended

Google has been gobbling up larger and larger swaths of Silicon Valley for as long as we’ve reported on the company, but it may be pulling back on its biggest development yet — after Small parts of San Jose were razed to the ground.

CNBC reports that after the first demolition phase, Google halted construction on its “Downtown West” campus, which was to convert 80 acres of downtown San Jose, California into 7.3 million square feet of offices, 4,000 residential units, and 50,000 square feet. numerous retail and cultural space, and 15 acres of parkland. The city believed the project could be worth up to $19 billion It offered 20,000 jobs after more than a decade in operation.

Google does not deny the report, with spokesperson Bailey Thompson making that statement the edge:

As mentioned, we are working to ensure that our real estate investments match the future needs of our blended workforce, businesses and communities. While we evaluate the best way forward with Downtown West, we remain committed to San Jose for the long term and believe in the importance of development.

While that statement could mean anything from “we’ve paused” to “we’re no longer interested in doing that,” Thompson also directed us to this San Jose Mercury News story Which suggests Google is just changing the schedule, and as quoted business leaders and development managers seem to be hoping it’s just a pause.

CNBC He seems less optimistic, noting that Google is currently trying to reduce rather than increase its office footprint, to the point where it will incur half a billion dollars in costs 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: He has laid off more than 60 employees, with sources telling the publication that they haven’t been told when construction will continue.

“While the sources are optimistic that a campus will be built at some point, and said Google representatives have expressed their commitment to it, they are concerned that the project may not reach the scale promised in the original master plan,” CNBC He writes.

San Jose Mayor Matt Mahan played it down CNBC story to local reporters today, saying he had just ended a call with Google to confirm nothing had changed other than a reassessment of the construction schedule, according to a video recording his office provided to the edge. However, he didn’t say anything about how long the re-evaluation process might take or when Google might appeal.

“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 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 be faster or slower depending on Google’s hiring needs, and that the City of San Jose could not dictate when a landlord would build a new office space.

“Over time, as the economy expands and Google grows again and they get hired again, I think you’ll see them take off in the Midwest, I think, and as far as we understand, their commitment remains,” he said.

San Jose economic development director Nancy Klein confirmed construction stop for Silicon Valley Business JournalOf the layoffs at contractor Google Lendlease, only one person was cut from the Google Downtown West team, he said.

The San Jose campus was controversial from the start and even sparked protests: Google spent four years convincing the city, making several concessions and promoting the entire campus as a new neighborhood, before approving the project in 2021.

Update, 10:44 p.m. ET: Additional comments from San Jose Mayor Matt Mahan and San Jose Business Development Director Nancy Klein.