A standing agreement with Lendlease has come to an end, leaving four future Google campus sites unfinished. Google recently underwent the process of reviewing its real estate investment, reportedly halting some construction work and laying off many of its Lendlease development employees who were involved in the projects.
Four key campus sites have stopped seeing progress following the review. Lendlease made the announcement on Thursday, confirming that Google decided to end the contracts that it had to develop the campuses. The sites sit in districts including San Jose for a project entitled Downtown West, Sunnyvale for a site named Moffet Park, as well as Middlefield Park and North Bayshore in Mountain View for the collective San Francisco Bay Project.
For the past four years, the companies have been collaborating and pursuing the completion of the projects. However, Google has changed its tune and set its sights on broadening its relationships and working with both developers and capital partners instead. Google stated that those plans may include Lendlease and their services. With this new approach, Google intends to push the campus developments forward.
Alexa Arena, senior director of development at Google, stated, “As we’ve shared before, we’ve been optimizing our real estate investments in the Bay Area, and part of that work is looking at a variety of options to move our development projects forward and deliver on our housing commitment… We appreciate Lendlease and the work the team has done to get us to this point.”
The comprehensive real estate review concluded that market conditions deemed the partnership with Lendlease no longer mutually beneficial. The $15 billion deal was made in 2019 with the intention of spending the next 10 to 15 redeveloping Google’s landholdings in three areas. This deal came to fruition alongside a promise by Google to join Lendlease in building 15,000 residential units at 25% at an affordable rate to help address one of the highest homeless populations in the country.
Downtown West, slated to be a significant presence, was set to have thousands of new housing units as well as 15 acres of public parks. Now, it’s a demolition zone until further notice. The development team for the San Jose campus was also reportedly downsized until additional actions were taken.
In September, Google executives confirmed their commitment to build the city at an event in San Jose. Google previously designated more than half its campus to public use, offering up to a $200M community benefits package that included displacement funds, job placement training, and power for community leaders to designate further spending. Some of the package is set to be distributed upon the development of office space.
San Jose Mayor Matt Mahan stated that the current construction halt does not correlate with Google’s commitment to San Jose or the timeline set for the distribution of the community package. He was quoted as saying that this can increase the flexibility needed to get the best possible developers on the project to build 4,000 new homes in the thriving downtown area. Additionally, locals are excited about the future of the projects, as the positive influence on the community could be immense.