New projects buck the trend | July 25, 2008 | Mountain View Voice | Mountain View Online |

Mountain View Voice

News - July 25, 2008

New projects buck the trend

Major office developments coming to Whisman, Bayshore areas

by Daniel DeBolt

While sales of commercial real estate have slowed nationwide, Mountain View is experiencing a surge of new office development for the first time since the dot-com boom.

The city has recently managed to attract seven major new office developments, including five major high density office projects in the North Whisman Area, Google's first-ever new building, and a high density addition to the "tech farm" on Evelyn Avenue just east of the train station.

While some of the buildings will replace older structures, density will at least double in most cases, making space for thousands of new local office jobs.

"We're in a unique position here in the Valley," said Vice Mayor Margaret Abe-Koga. "I was surprised to hear that the rest of the country is hurting."

The largest of the new developments has been approved at 690 East Middlefield Road. It will replace Hewlett Packard's former buildings, two of them at 94,000 square feet each, with a pair of five story Class A buildings totaling 340,000 square feet, complete with helicopter pads on the roofs. Dostart Development advertises the site to tenants by mentioning that a sign on the building's rooftop would gain recognition from 90,000 motorists a day on Highway 237.

The council has also approved a pair of four-story buildings on Clyde Avenue adjacent to the Sunnyvale golf course. The 192,000-square-foot development will replace 118,000 square feet of one-story buildings, opening the area up for more parking and open space. To insure that the project is "transit oriented," tenants will be required to provide transit passes to employees, and conduct annual surveys of employee commuting habits, the developer said.

"There was some concern by developers that these projects get approved in a timely manner because of the looming real estate bubble," Abe-Koga said, "but everything is working pretty well."

Site OK'd despite TCE

Two weeks ago the City Council approved rezoning for an 87,000-square-foot three story office building on 12 acres at 331 Fairchild Drive. The project involves demolishing a 1960s-era two-story buildings once used by Fairchild to manufacture semiconductors, which left behind the carcinogen TCE in the groundwater and soil.

Unsafe TCE vapors were measured in one old building just a few years ago, but with the new development the city is requiring a long list of mitigations. It is possible that Nokia, which occupies the property next door, may expand into the new building.

In addition to the three North Whisman office developments, the city is beginning to process two more office projects in the area, one at 369 North Whisman Road and another at 455-475 East Middlefield Road.

In exchange for allowing the higher, more profitable densities, fees from the five projects in the North Whisman area will go toward bike and pedestrian improvements that will connect the neighborhood to the light rail line that runs through North Whisman.

Abe-Koga believes the density is a good thing, because it allows more room for housing, such as the 700 homes planned on Ferguson Drive which will replace old industrial buildings. She hopes that by bringing more workers to North Whisman, along with the housing that is planned in the North Whisman area, the grocery store that neighbors have asked for could be justified.

"The office development market has improved quicker than people anticipated just a few years ago," said Kevin Duggan, city manager. "We think that's a good sign in tough economic times."

The Google factor

Google has yet to move on major plans to demolish numerous office buildings on 64 acres near Shorebird Way, which would make room for high density buildings there, to be filled by workers currently located in several older office buildings just south of the Googleplex, Abe-Koga said.

But this fall, the council is set to decide on plans for Google's first brand-new building in Mountain View. A 300,000-square-foot structure will be built on the northern half of a vacant lot just east of the Googleplex. City officials say it likely will be built to very high environmental standards.

Google paid the city $300,000 in fees alone to lease the nine-acre, city-owned property for the building site, and the company will pay the city $1.12 million a year in rent at the outset, with payments increasing by 3 percent every year for 55 years.

Another $600,000 in property taxes will go into the North Bayshore special tax district, which is now brimming with $18 million that can only be spent within North Bayshore.

E-mail Daniel DeBolt at


Posted by NW Resident, a resident of North Whisman
on Jul 25, 2008 at 11:57 am

Will all of these new office developments lead to new tenants, though, or will it just be more vacant office space?

Other than the Google building mentioned in the article and the possibility of Nokia expanding into the 331 Fairchild building, I don't hear any other names associated with these new developments.

What are the vacancy rates of commercial real estate in MV currently?

Posted by MC, a resident of Cuesta Park
on Jul 25, 2008 at 11:25 pm

Office vacancy in Mtn View is a bit below 10%-- down from a year ago, up a bit from the beginning of '08. This is better than the Peninsula at large, also better than Silicon Valley overall. The market is slowing down, however.

Really, though, that isnt all that relevant. None of these new buildings will be ready for occupancy for a good year or more. Impossible to say what market conditions will be at that point, but its likely that the developers taking a risk now in a weaker market are making a decent bet on the future.

Posted by VC, a resident of another community
on Jul 26, 2008 at 6:09 pm

A lot of the vacant office and industrial buildings in Mountain View are of the smaller, single-story variety left over from the 1960's and 70's - too small, inefficient, unusable, poorly designed and constructed, insufficiently wired, insulated, lit, etc. I think a lot of these are the ones that remain vacant nowadays because they are now considered obsolete in this day of the sleek, iconic, "Class A" corporate headquarters.

Posted by Garrett, a resident of another community
on Jul 27, 2008 at 6:17 pm

With this new building boom, maybe Mountain View can get something that they need a good Hotel