June 11, 2023

For a while, Google has planned to build a new 80-acre mega campus that would take over a large chunk of downtown San Jose, California. If you expressed doubt that the modern-day shutdown-happy Google could commit to the “10-to-30-year” timeline for the construction project, congratulations! CNBC’s Jennifer Elias reports that Google has put the idea “on pause” after just two years of construction.

Google got approval to start the project in 2021. The plan was to build an area twice as large as Google’s recently finished “Bay View” headquarters, which is about 14 miles down the road. The 80-acre “mixed-use neighborhood” would have had 7.3 million square feet of office space, 4,000 housing units, 15 acres of “parks, plazas, and green space,” and 500,000 square feet dedicated to “retail, cultural, arts, education, hotels and more.” The project, called “Downtown West,” had no estimated construction budget when it was announced, but some estimates said the finished work could be valued at $19 billion.

That was two years ago, though, and now Google is in the era of cost-cutting and earning Wall Street’s approval, so it sounds like Google has shifted its priorities again. CNBC’s report says that the project is now “on hold,” and sources tell Elias that Google “doesn’t have plans to revive the project in the near future.” Citing “internal correspondence,” the report also says Google removed construction updates from the project’s website last month.

While missing out on a big construction project is bad news for downtown San Jose, Google critically made this decision two years after what CNBC describes as “the first demolition phase.” So Google rolled into town with a big wad of cash and many promises, bulldozed everything, and left? CNBC says, “The demolition phase of the project took out a number of historic San Jose landmarks and forced the relocation of others.” With the project on hold, the area is now “largely a demolition zone at risk of becoming a long-term eyesore and economic zero.” A February report from the San Jose Spotlight ominously noted that, even after the demolition, Google is “not legally required to actually build its campus.”

It certainly does not make much sense to build office space right now. The aftermath of the pandemic accelerated the work-from-home trend, and Google’s move toward cost-cutting and a “shared desk” policy makes it sound like those office jobs are never coming back. COVID started in 2019, though, and by mid-2021, when construction started, Google’s offices had been empty for over a year. Now, after an economic downturn sent Google into cost-cutting overdrive, a Google spokesperson tells CNBC it is “assessing how to best move forward with Downtown West.”

When the plan was approved by the city, Alexa Arena, the director of Google’s San Jose development plan, promised the city Google’s project was “about the long haul” and that “we are not a developer that is coming in for five years.” The latter half of that quote certainly seems correct.

Listing image by Aurich Lawson

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