Just eight years ago the city welcomed Google like it would any other start-up looking for office space in the Bayshore neighborhood. Then-City Manager Kevin Duggan sat down with Sergei Brin and Larry Page, the company's founders, and made a deal to lease city land for office space.
At the time, no one predicted that Google's secret algorithms would create an unbridled market for Internet search, pushing its stock into the stratosphere and then settling down to its current price of more than $500 a share. The company's ease of search and advertising model helped lead to the downfall of print media and gave Google a competitive edge that it continues to maintain over every other company in the Internet search business.
Today, Google is one of the most successful high-tech companies in Silicon Valley, and Mountain View continues to be its epicenter. In just the last year, Google has unveiled expansion plans that will firmly anchor its business here. Its huge presence already has driven office vacancy rates to one of the lowest levels in recent memory, and brought about a spurt of interest among developers to obtain fast-track approval for new commercial developments, just to take care of the potential tenants pushed aside by Google.
The City Council is reacting quickly, and now seems open to approving large office and housing complexes, although one planned development for 65 units of housing on Evelyn Avenue may be converted to three five-story office towers totaling more than half a million square feet.
A Voice compilation last week shows Google owns or leases 67 buildings in the city and has stepped up efforts to build as much as 1.7 million square feet of offices in Mountain View, including a new 565,000-square-foot campus next to its Shorebird Lane headquarters. And a company spokesperson confirmed that plans to build a 1.2 million-square-foot complex at NASA Ames Research Center on Moffett Field remain on track to start in September 2013. In a break from Silicon Valley tradition, the Moffett plans include on-site employee housing, childcare and recreation facilities, a trend that we would like to see continue.
For local leaders, this full-throttle development raises questions about how the city will cope with the impact of the growing Google workforce, which is said to be 10,000 and could be many more. (The company does not comment on its employee census.)
Many of the hires that will occupy the new space will want to put down roots in Mountain View and they will be looking for housing in a market that is likely to tighten as more Google office space is occupied. To lessen the impact, the city should authorize more housing in areas adjacent to Bayshore, or even consider permitting multi-unit projects north of the Highway 101. It will not be possible for the city to provide housing for every new job, but now is the time to begin the effort.
All of this comes as the city is desperately trying to trim its budget that is inexorably growing to keep pace with the rising costs of employee salaries and retirement benefits. The city could get some help from Google's recent decision to pay $30 million upfront for long-term lease on a Bayshore parcel. But it will take more than the possible $1 million in interest the city could earn from banking the prepayment to close the budget gap. So far, Google has not sent any signals that it is ready to help defray any of the impact costs of its mushrooming footprint in Mountain View.
In our view, Mountain View must continue to do all it can to accommodate Google, which through its long-term property leases pays millions of dollars to the city every year. But at the same time, the City Council needs to talk to Google about reaching beyond the helpful $30 million real estate transaction and think about other ways the company can contribute to the city's long-term viability and sustainability in the years ahead.