In May of 2015, when the City Council of Mountain View voted to exclude Google from their allocation of 2.2 million square feet of commercial space under its North Bayshore Precise Plan, the decision, seen by most as a direct blow to the city’s largest employer, was couched as being just one element of many others under consideration by the city. At the time, council member Chris Clark told The Registry, “There’s a temptation to have headlines that say ‘Mountain View snubs Google in favor of LinkedIn.’ That wasn’t the message we were trying to send.”[contextly_sidebar id=”K4jyGAPRQwj3Z1bxb3FpCjUTXEmkEGYW”]If the message was different, it was difficult to decipher once LinkedIn, a tech giant with a significant footprint in the city, was allotted 1.4 million square feet of that allocation. Other developers, Palo Alto-based Broadreach Capital Partners, Mountain View-based Rees Properties as well as The Shashi Group were other winners at the time, leaving Google, the Sobrato Organization and Peery Arrillaga without any square footage within that plan.
The city’s decision undoubtedly affected Google, which just weeks before launched an uncharacteristically open campaign full of visuals and details about their development proposal. It was selling its proposal hard. But the city had different designs.
“We know the City Council had a tough decision to make [Tuesday] night, and we thank them and our community for more than six hours of debate,” said David Radcliffe, Google’s vice president of real estate and workplaces services, in an e-mailed statement at the time. The company “will continue to work with the city on Google’s future in Mountain View,” he added.
And continue in this quest it did.
According to published reports, Radcliffe and LinkedIn’s workplace vice president, Jim Morgensen, began their discussion about a potential property swap during over lunch one day, and the two companies announced last week a bargain that would effectively give Google the coveted development rights in Mountain View.
“Google and LinkedIn have come to an agreement that will have a direct, positive impact on the ongoing traffic challenges in Mountain View and is beneficial to both of our organizations as well. We’re excited to move forward with our respective development plans in our hometown,” said Google through a spokesperson who asked not be named.
The deal entails the exchange of about one million square feet of campus office spaces in Mountain View and Sunnyvale and sizable additional parcels to be developed by Google in the future. The move allows both companies to pursue their expansion goals as Google will now have a more consolidated North Bayshore plan with which to move forward to build a naturalistic, state-of-the-art facility. On the LinkedIn side, they’ll be giving up former plans for headquarters at Shoreline Commons nearby Googlelpex, and instead focus on advancing the build out of a campus cluster off of the Southbay Freeway where Mountain View meets Sunnyvale.
Though it appears that the transaction wasn’t designed to generate profits for the companies, the noted properties, some leased some owned, are now at much higher value than when previously acquired. Records indicate the North Bayshore properties cost Google more than double what LinkedIn had paid little more than a year ago. The deal signals a shift in interactions between the two companies that have earned a reputation for competitiveness around growing their Silicon Valley bases. Intense traffic congestion in North Bayshore exacerbated the tension as the companies were expected to reach an agreement to collectively reduce vehicle usage by creating transportation alternatives. As it turns out, exchanging properties was easier than reaching a traffic mitigation agreement.
“We have always been proud that these two companies are headquartered in our city,” said Mayor Pat Showalter. “As Mountain View evolves, we look forward to continuing our relationships with these active corporate citizens.”
“LinkedIn is bringing our 3,700 South Bay-based employees together into a single walkable location to continue to foster our culture of collaboration. This move allows us to bring our South Bay-based teams together years earlier than we could with the Shoreline Commons project, with room for future growth,” offered a LinkedIn representative.
Google will acquire four Mountain View properties all within a mile of each other between Highway 101 and the San Francisco Bay. Three of the sites are part of Shoreline Commons, originally desired by LinkedIn for expansion plans, the fourth is 370,000 square feet of LinkedIn’s office space. On the other end, LinkedIn will get three office buildings totaling 721,131 square feet, forming a small geographical triangle near Sunnyvale’s Encinal Park. One of the buildings is the former Palm Computing headquarters on Maude Avenue.
The building out of Silicon Valley campuses for these tech companies also including Facebook, Apple and others has steadily increased traffic congestion as well as the demand for housing. As the way appears paved for Google to continue with its grand new headquarters, it will likely have to contend with the City’s goals of building housing and mitigating traffic impacts.