An expanded version of an earlier story
If Mountain View's tense standoff with Google over North Bayshore last week was like a game of chicken, it was Google that swerved.
This week, Google officials backpedaled on demands for more office space as a condition for building 9,850 new housing units in North Bayshore. In a contrite letter sent Monday afternoon to the Mountain View City Council, the company's real estate team apologized for comments made last Tuesday, Sept. 26, that were widely interpreted as an ultimatum demanding an additional 800,000 square feet of office development rights.
In the letter, David Radcliffe, Google's vice president of real estate, emphasized that his team was wholeheartedly on board for seeing housing built near the company's North Bayshore headquarters.
"During the Council's study session, we voiced the idea that adding office space could be a way to offset housing costs. We apologize that this came out as a demand, when the intent was to open a conversation to address a potential issue," he wrote."We remain unequivocally committed to (North Bayshore housing) and strongly support the creation of the full 9,850 new housing units."
The company's tone was very different one week ago as a grueling City Council study session on the North Bayshore precise plan stretched past midnight and into the early morning hours. At the time, council members were suggesting a series of new requirements for the company's future housing development, including calls for union hiring, environmental monitoring, ownership housing and up to 40 percent of new apartments to be priced as affordable.
As the night wore on and the list of potential public concessions grew, Google's lead representative, Senior Design Director Joe Van Belleghem, came back to the lectern and spoke bluntly. There would be no housing built by Google, he said, unless the city agreed to allocate 800,000 square feet of additional office space.
"Just to be clear: no new office, no new residential," Van Belleghem told the council. "We've been very clear all along that we needed this extra office space to make this work."
By a thin margin, the council opted not to budge, and declined to consider any additional office development rights. It was a harrowing end for the meeting, leaving housing advocates concerned that after so many years of work, a partnership to bring in thousands of new homes now seemed to be headed off a cliff.
Less than a week later, the company's real-estate team signaled a change of heart, making overtures to repair the damage. Speaking on background, a Google spokeswoman insisted that the Van Belleghem's comments last week were an aberration, inconsistent with the company longstanding support for housing.
"Nothing has changed -- some of the things that were said, they're not our stance," she said. "We've always been vocal supporters of housing, and we want to make sure the public understands where we're coming from."
The spokeswoman confirmed there was some pressure from the company's own employees in recent days, highlighting the severe need for housing. Similarly, council members say Google employees contacted them following the meeting to encourage them to press the company on the 9,850-housing-unit goal.
Others outside the company theorized that other motives were at play. Some city officials suggested Google came to the conclusion they had more to lose if the housing deal fell apart.
"I think Google realized they would take a hit in public opinion," said Councilman Lenny Siegel. "It's not just the substance of the meeting, but also the idea of a city getting pushed around by a big corporation."
Google officials may attain additional office space in North Bayshore through other avenues. City planning staff pointed out that the company can still file a so-called gatekeeper project, which if approved would provide a special-case exemption from normal growth limits.
The council this week approved plans to allow Google or any other private party to purchase development rights in the San Antonio neighborhood and transfer them elsewhere in the city. That system is intended to help the Los Altos School District acquire land for a new school campus.
It wasn't just the comments by Google at the Sept. 26 meeting. Behind the scenes, there were other signs from Google leading up to the meeting that alarmed city officials.
A few days before the meeting, Councilwoman Margaret Abe-Koga said she met with Google's real estate team to discuss the North Bayshore vision. They showed her plans to add 3,000 apartments along Pear Avenue and the gateway property off Shoreline Boulevard. Another 3,400 units would go along Shorebird Avenue. It wasn't clear where the remainder would go, she said.
Van Belleghem and other Google reps then detailed their need for 800,000 square feet more of office space. Doing the math in her head, Abe-Koga calculated that increase would mean about 2,700 more homes would be needed to house all those employees.
"I told them this changes the whole conversation," Abe-Koga said later. "Our whole impetus for doing the housing in North Bayshore was to make the jobs-housing imbalance better. You put down almost another 1 million square feet, that exacerbates the problem."
Google officials floated some other controversial ideas in a letter authored by Van Belleghem and sent in advance of the Sept. 26 meeting. Through years of previous North Bayshore meetings, Google officials have routinely sent formal letters to the city, and usually this correspondence outlines the company's high-level priorities.
But this Sept. 22 letter from Google was different: It contained six pages of new policy language authored by the company that it wanted inserted into the precise plan. The language detailed a process for adding new office space, in effect creating a system for circumventing the 3.6 million-square-foot cap in the precise plan.
Mountain View planning officials were most alarmed at the proposed language for affordable housing. Google proposed to price 15 to 20 percent of new housing as "affordable," but called for it to be subsidized through "property tax abatement, tax credit programs, office affordable housing impact fees and/or any office bonus (FAR) community benefit contributions."
Basically, Google seemed to be seeking various public subsidies to help pay for the required affordable housing for their future market-rate developments, according to city officials. Normally, a housing project's market-rate apartments subsidize a smaller portion of affordable units. Other funding sources -- like government tax-credit programs or the city's pool of affordable-housing fees -- are typically reserved for dedicated affordable-housing projects.
Exactly how much funding Google was seeking remains unclear, but the notion of this request disturbed city officials, said Community Development Director Randy Tsuda.
"There's an incredible level of detail there that we couldn't do," he said. "To ask for an abatement of any sort in the precise plan without any details, that would be very unusual."
Council members also echoed concern. Abe-Koga pointed out that tech offices contribute little in the way of ongoing revenues for city government. The one surefire revenue source they do produce is property taxes, she said.
"Why would we give them that?" Abe-Koga said. "If they want that back as a rebate, then there's no point in us allowing any office development."
At the Sept. 26 meeting, council members pointedly ignored any discussion of the suggested language in Google's letter.
Asked about what the company was intending, the Google spokeswoman, who declined to be named, said the public funding would have been used only for building more affordable housing beyond the criteria in the precise plan.
"This wasn't a back door. It would be a further way to go above the 15 to 20 percent goal," she said. "This was just a way to get a conversation started about it."