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SAN JOSE, CA-Cisco Systems has announced that its planned construction of a giant world headquarters based in Coyote Valley has been postponed indefinitely. Despite last week’s Santa Clara County Superior Court ruling rejecting three attempts to stop the development, which was planned for a rural area, the networking company has halted construction due to changes in the high-tech industry’s economic climate.

Cisco originally planned to construct a 6.6-million-sf, $1.3-billion corporate headquarters that would house 20,000 employees. Now, Cisco says it will eventually build an office campus of 1 million to 3 million sf for 3,000 to 9,000 workers on a portion of the site, with the remainder of the land to be sold or leased. The company did not specify a timeframe for future development.

The company says that its decision was based on economic conditions and was not influenced by the protests from San Jose residents.

“As the economy slowed, we revised forecasts of our space needs and made changes to our real estate plans. As part of that, we decided to scale back our plans in Coyote Valley,” says Cisco Chief Financial Officer Larry Carter.

Still, this may not necessarily be good news for San Jose’s residents and environmental groups, who protested the development, saying that it would have negative effects on housing, traffic and natural resources.

Cisco has secured the necessary permits for the development through the court, meaning that commercial development in Coyote Valley is now allowable. San Jose officials had voted for the project, as it would bring in large tax revenues.

The developers of the property, Coyote Valley Research Park, LLC, plan to start working on the site’s infrastructure improvements next year. Part of this project includes building a new interchange that connects the site to Highway 101. Coyote Valley will split the $45 million for this project with the state.

Cisco’s real estate partners will also continue development on the project and will be responsible for marketing the space to other companies.

“They are required to have 1 million sf under construction within the next five years. Five years is a long time,” says David Vossbrink, the spokesman for San Jose Mayor Ron Gonzales.

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