Google could buy $110M worth of land, without subsidies, for San Jose megacampus | Hacker News Reader

Google could buy $110M worth of land, without subsidies, for San Jose megacampus

cnbc.com

79 pointsjpatokal69 comments

Downtown San Jose is a curious place. There are almost no stores and only a few big companies (like Adobe) clustered together. It seems like bars and restaurants are the only things really thriving there.

If you compare the experience of walking around downtown San Francisco or any other larger US city during a weekday or on a weekend, San Jose seems very, very quiet and lacking that "bustle" that big cities have the world over.

This Google development has the potential to give the downtown area some much needed balance and revitalization.

Downtown San Jose business / office space is owned by a few agencies who aren't interested in working with the local business to build a better downtown, but instead are interested in kicking them out as much as possible from their leases to renovate and bring in all the other random non-local-built conglomerates into downtown.

I know this as I have a friend who owns a local business in downtown SJ who is being kicked off their lease, as well as every other club, restaurants, and businesses who's buildings were bought last year buy a single agency.

Not everything needs some big company to come in to make everything better, all that actually does is bring in a whole new wave of business to benefit off of what was built by others who were crushed before them.

I emphasize with the general sentiment, but this doesn't appear to be applicable to this particular deal, which seems to involve parking lots and disused government buildings.

There's a spot right across the street from Original Joe's. I'm not sure exactly how much of the building has been sitting empty for the past 10+ years, but the only time I've seen the corner retail space occupied was for a [temporary] pop-up store for SuperBowl 50's memorabilia while that was going on. This makes sense for somebody, and at the moment that's not me.

If the property has low prop13 taxes, then there's not much cost to keeping it empty. Lots of older california real estate like that... entire shopping malls are empty and "appreciating in value".

Prop13 on commercial property really needs to be balanced with heavy vacancy taxes.

Prop. 13 on commercial property needs to be terminated.

I don't understand this. If you are not receiving rent, that's a huge opportunity cost regardless of what you are paying in property taxes.

  bars and restaurants are the only things really thriving there

Not even. Downtown is replete with failed restaurants in recent years, even Los Gatos Brewing and Amicis. Even longstanding fast food options like the McDonald's and Ben & Jerry's on San Carlos and the Carl's Jr on 3rd are long gone.

You're right. Even on a warm Friday night, the city center couldn't be said to be crowded. You can get a seat at a bar or a table pretty much anywhere you want, in my experience.

LGBC also went under in Los Gatos, it was an awful restaurant that also had crappy "microbrew"

I went there for the first time last year for a conference and noted the same thing. I've never been to texas, but it was like what I imagined texas would be like. Everything was new, nice, and gigantic. Blocks were massive, sidewalks were massive, everything. But there were barely any people. Coming from NYC, it was kind of surreal.

If you go to Austin you will see that it has a much more vibrant downtown than San Jose.

...and downtown San Jose is actually a lot more vibrant now than it was ten-fifteen years ago

I've recently been doing a fair amount of traveling to tech-heavy cities from my base in the Rust Belt.

I see all the money and development going on in places like this, and it amazes me how growing and non-dysfunctional these economies are.

How do we get Google to move, say, 10% of those high-paying jobs to places whose economy really needs them?

Clearly money alone isn't a motivator, I just did a quick check and 3 times that amount of highway adjacent, commercial zoned acreage is available in my zip code for 1% of this price.

I get your question is how, the answer is that its not gonna happen

Bezos’ fake contest accurately reflects the coastal mentality. There is a culture that supports this industry which has history that wont be replicated by a random town that wants to call itself Silicon Apalachia/whatever geographic feature is nearby

> How do we get Google to move, say, 10% of those high-paying jobs to places whose economy really needs them?

You'd need to incentivize a critical mass of high-paid workers to be willing to move there. As you note, money won't do it -- you'd need to offer some sort of unique opportunity. Finding such a thing is a very hard problem..

You really do need a critical mass. I moved for my last job search and one option was for LinkedIn in Omaha. Compared to a tech hub, such a job is risky. I'm starting a family and would prefer they don't have to move more than necessary. Jobs don't always work out and living in a city with lots of tech jobs means I don't have to ever move again because of work if I don't want to. Then there's the added bonuses when a certain percentage of your community work in tech. Then the goals of your community align better with your goals for your kids, for entertainment, recreation, shopping, the environment, etc.

Does your ZIP code have the kind of employees that Google needs to succeed?

Does his/her ZIP code have the kind of employers those employees need to succeed?

It's a chicken and egg problem. Personally, I put the onus on the companies, as they have much more power than any individual employee does. It is certainly possible for a company of that size to open a small office, and gradually grow it, whereas an employee is restricted to what jobs are available in that area.

And we need more diversification geographically; too much is centered on the Bay Area, and the Bay Area's housing crisis is proof of it.

The trouble I've personally seen is that the companies believe they can pay less in the lower cost of living areas, and therefore don't tend to attract the sort of talent that they need.

I can think of quite a few qualified people that'd be happy to move to a small town in the middle of nowhere, if they could work in a place like Google, get the same paycheck as their colleagues in California offices, but have a significantly lower cost of living. So I don't think that's really a problem - they would certainly have enough people to kickstart such a thing, and then it would just grow.

This.

It's truly amazing to me how much elitism is oozing in this thread from people who just keep repeating as though it is some well known fact that good people only want to live in big cities, hence suffering cities clearly are only suffering because there is something fundamentally, immutably undesirable about them.

People need to drop these elitist attitudes. A huge number of tech workers would love to leave SF, NYC, etc if only the damn jobs would let them.

If what you say is true, then surely it would be reflected in reality.

It could be, if only large companies would attempt to move to smaller cities, and show any interest in following through with that intention.

I’m saying it must not be to their economic benefit, otherwise it would have happened already.

The market is not perfectly rational. Sometimes companies do things that are against their economic interests due to irrational perceptions to the contrary.

It is reflected in reality. The vast majority of GitLab's exclusively remote workforce does not live in SF or NYC.

If more companies offered such terms, the labor pool would spread out more.

The question is would your highly paid workers (needed to lead the ship) move. I've seen in practice very few who would.. most that have moved because of desires to be near family, but that reason won't create a singular new hot spot for tech.

But that's not gonna happen. They will most likely not get the same paycheck as their colleagues on the coasts. Mostly because the cost of living is much lower.

Edit: In my experience I have more net money if I work in place with high cost of living and high comp compared to the opposite.

> But that's not gonna happen. They will most likely not get the same paycheck as their colleagues on the coasts. Mostly because the cost of living is much lower.

See, there's no logic to it once you unpack it. If the company is willing to pay $X for a given person in one location, they can obviously afford to pay $X to them in another location - they're not any worse for that, since they get the same productivity in return (quite possibly more, because less commute time == happier employees).

But yes, in practice, they will lower the pay - and then complain that they can't hire anyone in those locations...

Technically the truth. But they might not get the same productivity because the team you'd be joining would be in SF or wherever. If remote working were perfect and the norm then no problem.

> How do we get Google to move, say, 10% of those high-paying jobs to places whose economy really needs them?

Create the amenities and environment that would be enticing to a large % of affluent, highly skilled tech workers.

This is very much non-trivial, these workers actually can afford bay area/Seattle prices on some level, so just cost of living isn't gonna attract them if there aren't good educational opportunities, no good nature around, no other companies around with good jobs, a less tolerant/accepting culture, no public transportation or biking to speak of, etc.

Hacker News gets a lot of flippant comments suggesting this would be trivial for Google or Facebook or whoever to do, but it wouldn't be, at least not in a way that would actually make sense for their business. Businesses are fairly rational actors, you have to have such an expansion or move work in their interests.

I don't actually know many people who think that access to Bay Area amenities is the highest and best use of a tech salary. I and most people I know would deploy our cash in other ways (international travel, earlier retirement, expensive hobbies, etc). if we could do so while keeping our jobs. That opportunity just isn't on the table.

I've chatted with the few of the people involved in siting our remote engineering offices. They're solidly convinced that there's no point even trying to recruit in the US outside SF/NY/SEA, and are looking directly to the developing world. The satellite office strategy in the era of Trump is to the hire the H1Bs where they don't need visas.

International travel is actually one of the advantages of many of the high cost areas, including the bay area and NYC. One or more major airports with lots of international connections is a big advantage. There are a few cheap metros that have that too (mostly the bigger ones, of course), but not many.

> I don't actually know many people who think that access to Bay Area amenities is the highest and best use of a tech salary.

A lot of things are kind of hidden, they don't become an issue until they're gone. People may not think about the bay area weather or crime rate very much until they're pondering a move to Chicago or Detroit. They may not think about the bay area's cultural diversity or educational opportunities until they're considering moving to a small city in Nebraska. People take the things they already have for granted.

For example, I basically took for granted many American/west coast/bay area-n advantages before I moved to Munich and lost them: amazing restaurant scene (especially Asian/Mexican food), business hours are generally convenient, online selection of goods (especially Amazon) very strong, electronics relatively cheap, robust nerd culture, etc.

> That opportunity just isn't on the table.

At my previous company, it was very easy to move from SF to Seattle, which would save a high income tech employee a lot (no state tax, lower housing costs). Maybe a dozen have moved; the vast majority haven't. These "revealed preferences" say a lot more than what people are claiming.

Honestly, at high enough levels in top tech companies, money isn't that limiting of a factor. e.g. at Google L7 level, an employee supporting a family (say spouse and kid) could have FIREd into a low-COL area after ~5 years of work.

I too have an option to move to Seattle (and New York) that I haven’t taken. The COL differences don’t seem wide enough to be worthwhile.

I talked about this in another post. I'm sure there are many different types of tech worker. But right now (I'm in my twenties) when evaluating a job offer the location is super important. Sure buying power and rent price is a factor. But I'd gladly take a hit there and work in place like Berlin, Amsterdam, New York City, SF as opposed to somewhere less cosmopolitan. In terms of culture and life outside of work it's just that I vastly prefer to stay in such an area. That's a personal perspective.

From the companys' POV they have to consider who would move there (for the reason above and a myriad of others). Are there good schools in the area? How is the regulatory environment. How is the reaction to loads of immigration. There tend to be a lot H-1B workers in the tech sector.

It makes a lot of sense from a business perspective to set up shop in a place where a lot of perspective employees already live.

> How do we get Google to move, say, 10% of those high-paying jobs to places whose economy really needs them?

You don't.

If you want a future Google (etc.) to be located there, you make the same kind of massive public investments over an extended period that created Silicon Valley, which also provides jobs there — but not from a Google-equivalent — in the interim.

Or, you subsidize people moving to where the jobs are now: geography doesn't need jobs, people do.

It's crazy to me that big Tech Cos keep building massive offices and don't mind that there's not enough housing built to match. Those rent/housing prices drive up the wages they have to pay.

Perhaps this is the goal.

Locating the offices in areas with high housing costs is an effective way to discriminate against people with families. Such people might not want to dedicate life fully to the company. Getting people to live in apartments means that there is no gardening or home repair to do, so one might as well head in to the office and do some more work.

lol discriminate.... its also a great way to boost your balance sheet! Nobody is thinking about anything else. When the notional on paper value of your real estate holdings are higher, your access to low interest credit is greater, your access to deductions is greater, your access to anonymous wealth preservation is greater: a more fungible dollar is worth more than others because the covenants are more numerous

At this point it is a self fulfilling prophecy

Your comment made me think of the Bournville model village that Cadbury's built for their workers in Victorian times

https://en.wikipedia.org/wiki/Bournville

> and don't mind that there's not enough housing built to match.

Of course they mind. Google even works with developers to build housing: https://www.mercurynews.com/2017/12/12/googles-massive-housi...

Also FWIW, housing prices (rents) have generally stagnated for the past 3 years in the Bay Area; it's less of a problem now (in terms of getting worse) than it was half a decade ago.

is that because supply is rising or demand is falling?

  Google even works with developers to build housing

That North Bayshore real estate is trapped between US 101 and the Bay, with no fixed transit and only the already-gridlocked Shoreline Blvd to get through. This is presumably why Google's Mountain View workplaces are on the opposite side of 101.

Google has tried hard to build or help build housing, but they always get blocked by the local governments.

This has literally never happened (in SV anyway).

This happens all of the time. Local governments and existing residents are a forceful voice against new building.

Besides, local municipalities can make it easier to build by alleviating some of the time consuming (and expensive) permitting process but they don’t really care. There’s all kinds of things they can do even just with zoning.

Name one example where Google has made an actual attempt to build housing and was actually stopped by a local government.

One?

They give lip service regarding the general concept but have yet to put so much as a specific development before a planning commission, let alone a city council.

Is Google just desparate to expand in the Bay area? I guess its nearby to commuter rail, so there is some infrastructure, but unless San Jose starts doing many upzones, or Google includes over 10k units of housing, this will boost rent and property prices in the area.

They don't care, their employees can / will be able to afford the cost of living, and others will flock from the areas around to work low-paying jobs to support them.

I'm leaving the area because I don't want to be forced to work for a FAANG to be able to have what should be middle-class lifestyle abilities without having to worry about how I'd be so much better off just working at one of them. I find it fairly appalling that no BigNameCos are at least trying to work at:

a) remote work being a thing they offer b) expanding on meaningful satellite office space

I don't want to really hear about how Amazon is trying to do this - they are simply exploiting alternate economies for their own gain instead of genuinely deciding to bolster them to give everyone involved an upside.

I don't buy into the belief that this is the only place where people can build good software, that this is the only place to meet people to build great opportunities. The sooner we stop continually buying into this the sooner we can work on a change.

In regards to your point 'b', Google at least does have some rather substantial offices outside of Mountain View, but other than NYC and Zurich (the big ones) they don't get a lot of publicity I guess. For example Pittsburgh & Waterloo are two great offices that are in smaller more affordable cities, and both offices are growing.

I don't think you can say the same for Amazon, Facebook and Apple though. When my wife worked at Apple Canada a decade ago the trend was to strip engineering from remote offices and leave them as marketing/sales orgs only. I understand that changed some in the last bit, but I'm not sure how substantially. Amazon's offices here in the greater Toronto area are growing, but they're in Toronto, where cost of living is extremely high.

Google does to some degree, however, from what I know (and Googlers feel free to jump in) it's non trivial to work for the Cloud team in sunnyvale or wherever but actually work from the Pittsburgh office. Because you can't do this sort of thing, the type of work that may be available to you at any given office not around headquarters may be limiting.

I could be wrong on the above, but it's what I've minimally gathered from talking to some friends / recruiters over the years.

Yeah, you're roughly correct. There are exceptions. But in general 'remote' sites (hate that term) have learned over time to avoid excessive fragmentation, as that has led to undesirable results. Sites tend to try to focus on a small number of teams with a strong centre of gravity.

I know Apple has some engineers that work in other offices - there’s a good component in Cork (Ireland) in Software Engineering, and other offices where engineers work out of.

Similarly, I know of a fair number of engineers at Facebook working or who have worked out of their London office.

The big tech companies definitely prefer to centralize engineering though, simply because video conferencing software is not there yet, and in-person communication is still far superior to the remote communication tools we have today.

I say this as someone who works at one of the companies mentioned above.

This is the only place where they can effectively make an echo chamber. Try going to Indianapolis with their political views. A messiah complex won't go to far in the Circle City.

It has been agonizingly slow, but the BART extension is slowly closing in on downtown San Jose. That opens up a lot of the East Bay to commute in by rail.

The BART accessible parts of the East Bay are not especially cheaper than the Peninsula. Prices already reflect the substantial tech job market in SF.

The cheaper BART accessible parts of the East bay substantially cheaper, though not cheap. Peninsula can be the triple or four times the price per square foot.

https://m.estately.com/bay-area-home-affordability-transit-s...

> $110m

Probably less than the cost of one diversity training seminar for Google.

It's also half price compared to what the city itself just paid for the Convention center South Hall parcel.

I flagged this because I think it’s a joke, but let me know if you’re serious and I’ll unflag.

Details of the specific lots in question can be found in the linked Memorandum, with a map on page 7: http://sanjose.legistar.com/gateway.aspx?M=F&ID=6e29db0e-c5d...

The biggest lots appear to be currently used only for parking for the adjacent SAP Center sports arena: https://goo.gl/maps/5rGgitUeisL2

  The biggest lots appear to be currently used only for parking for the adjacent SAP Center

No, only the one parcel directly south of SAP, corner of Autumn and Santa Clara, is designated SAP parking (known as Lot D).

really wish they would expand somewhere else instead (i know they are doing NY).

So, about 3 acres then?

From the article: "In a new document, the city of San Jose says that Google could pay upwards of $100 million to buy roughly 21 acres of land for its proposed mega-campus, without any subsidies."

Lame attempt at “TRBA” sarcasm, my apologies.

To say "without subsidies" is seriously misleading.

Google is being offered these lots at well below market price. Many of the same lots were previously offered to the Oakland A's for a new ballpark, also well below market price at that time.

San Jose land policy is run by corrupt idiots, as evidenced by them paying $41 million(0) in a sealed bid auction for the Convention center South Hall property at about twice the price they are getting from Google ($10M/acre for that mostly landlocked parcel vs. $5M/acre they are charging Google for prime parcels with good freeway access at Bird Ave.).

But, hey, I'm sure they'll all get cushy Google executive positions when they leave "public service"... like Mineta did from Lockheed Martin after redirecting light rail their way.

Also, regarding "no subsidies": watch them offer Google below-srandard development impact fees.

(0) the highest private sector bid? Just $11 million!

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