Google may be reevaluating its construction timeline, but executives for the tech giant are refuting speculation the company is backing away from its largest real estate investment to date by kicking off block parties to further clarify its commitment to the $1 billion Silicon Valley project. The Mountain View, California-based company's plans for an 80-acre campus situated around Diridon Station, a major transit hub located on the western edge of downtown San Jose, California, will be moving forward despite concerns about cuts parent company Alphabet Inc.
is making to its vast real estate portfolio around the world. At the recent Creekside Social — community events the tech company is hosting with developer Jamestown to help activate the site until construction begins — Alphabet President and Chief Investment Officer Ruth Porat said the search engine provider is continuing to pursue the Downtown West project despite the decision to reassess its timeline. “Here in Downtown West, with input from San Jose residents, businesses and civic leaders, we have created a multidecade opportunity and development plan,” Porat said at Saturday's block party.
“We did that because we believe in the people who live here, who work here and are committed to being here in San Jose.” article 3 Min Read Google Said To Have Hit Pause on Largest Real Estate Project The Silicon Valley tech giant is "assessing how to best move forward" with its plans in San Jose, California.
Katie Burke Social The affirmation is a welcome boost of confidence for Silicon Valley's largest city following concerns earlier this year that the tech company had hit pause on the project with no plans to restart it for the foreseeable future. Downtown West, approved by San Jose city officials two years ago, has been expected to accelerate the revitalization of a downtown that has struggled with office vacancy and has had little ground-up office development in about a decade.
The long-awaited development was cleared for 7.3 million square feet of office space; 4,000 housing units; 300 hotel rooms; 500,000 square feet of retail space; and 15 acres of open space and parks. 'Going To Continue' Concerns about paused work on the project — Google's largest real estate investment to date — have coincided with its parent company’s move to aggressively shrink its corporate office footprint. Even though company executives recently told analysts that cuts to its real estate portfolio would begin to ease, Alphabet recently listed for sublease more than 182,500 square feet across four buildings in Palo Alto, California.
That was just a few months after dumping more than a million square feet of space on the sublease market in an attempt to cut any extraneous expenses and shift its focus from a growth-at-all-costs mentality to a more prudent approach to expansion. While it is still moving forward with a handful of projects in places such as Texas and California, Alphabet has spent roughly $570 million so far this year to close offices and end leases as it seeks to reduce expenses. The termination costs come alongside a slowdown in hiring and a plan to reduce the company’s anticipated investments in future office spaces. To be clear, an updated timeline of the Downtown West project has not been provided yet, leaving the sprawling development with a layer of uncertainty despite confirmations that Google will fulfill its promises to build the game-changing project. “We are going to continue to see the development of some really exciting efforts, office development, residential housing, and something I am particularly excited about — acres of public space,” Porat said. The tech company's public relations push also comes as it begins to defend itself in one of the nation's largest federal antitrust cases in decades.
The trial, which was brought by the Department of Justice and began on Tuesday, accuses Google of paying more than $10 billion a year to cut out competitors and exploiting exclusive agreements to maintain its dominance in the global market.