Google Halts Work on $19B Urban Village in San Jose

Google has halted work on perhaps its most public initiative in the US, an 80-acre Urban Village in the heart of Silicon Valley in downtown San Jose.

The pause, reported first by CNBC, also puts on hold thousands of residential units and thousands of new offices that were planned as part of the downtown mega-project.

Throughout last year, the Mountain View, C-based tech giant insisted that it was preparing to break ground this year on the transit-oriented mixed-use development Google was planning to build in the neighborhood near Diridon Station.

According to CNBC’s report, Google has given no indication as to the length of the construction pauses on the project. The report cited unnamed sources who said they remain optimistic the urban village eventually will be built—perhaps not at the scale envisioned in the original plans.

The project, known as Downtown West, was planned to include more than 4,000 homes, 7.3M SF of offices, 500K SF of shops and restaurants, as well as 15 acres of public parks.

The Downtown West village, with an estimated price tag of more than $19B, was expected to house 25,000 Google workers in a new neighborhood surrounding the planned Diridon Station, which will be built at the intersection of Amtrak, BART, Caltrain and new high-speed rail lines.

At the end of last year, Google began demolition work at the site in order to begin infrastructure improvements ahead of the development of the first phase of the new transit village.

According to CNBC’s report, Google layoffs announced earlier this year included members of the Downtown West Development team. LendLease, the lead developer on the Downtown West project, also made cutbacks, the report said.

“We’re working to ensure our real estate investments match the future needs of our hybrid workforce, our business and our communities,” a Google spokesperson told CNBC, in a statement.

“While we’re assessing how to best move forward with Downtown West, we’re still committed to San Jose for the long term and believe in the importance of the development,” the statement said.

While Google pulls back on the San Jose hub, which is 10 miles from its HQ, another tech giant appears to be moving ahead with similar plans to create a mixed-use village near its HQ.

Despite a multi-billion-dollar cost-cutting effort that has seen Meta downsize its global office footprint and initiate layoffs while its stock price has cratered this year, the social media giant is moving ahead with a mixed-use village it plans to build next to its Menlo Park headquarters in California.

The Menlo Park City Council this month unanimously approved Meta’s new Willow Village development, a project that envisions the transformation of a former industrial park into a walkable urban town center, according to a report in the San Jose Mercury News.

Since it first proposed the project in 2020, Meta has enhanced its plan by promising to build 1,730 units of housing, a hotel, a grocery store, a town square and an elevated curving park that will connect with its global headquarters.

According to the newspaper report, the extended negotiations over the mixed-use village resulted in Meta agreeing to increase the number of affordable and market-rate homes built in the village while reducing the amount of office space and Meta Platforms on-site employees that will be occupying the new neighborhood.

While many cities on the Bay Area peninsula are focusing their housing efforts on transit-oriented developments on the Caltrain corridor, Menlo Park, Palo Alto and Mountain View—the heart of Silicon Valley—have opted to put new developments in industrial zone to avoid NIMBY pushback from residential neighborhoods, the Mercury News reported.

However, the added traffic from Willow Village already has at least one City Council member warning that the project inevitably will need to be connected to Menlo Park’s Caltrain station to avoid an influx of vehicular traffic.

“We have community members that will live here in about three years, and they need to have access [to the train station] so it’s not necessary to drive to [Willow Village},” Cecilia Taylor, a council member, told the newspaper.

According to the report, Meta has estimated that about 20% of the workforce at its Menlo Park HQ and the expanded office campus at the new mixed-use development will live in new housing at Willow Village.