Silicon Valley Cities Being Stressed by Tech Company Expansions

Companies like Google and LinkedIn want to expand, but some California cities, including Mountain View, are holding firm on expansion limits based on quality of life issues for residents.

Silicon Valley, Google, LinkedIn, real estate, office space, development

For the last several years, major technology companies like Google and LinkedIn have been expanding their office space, adding more employees and bringing more business to the cities and towns where they are located. For the cities themselves, that development has been a mixed bag because while tax revenues increased, pressures on residential property values, traffic jams and other neighborhood pressures have increased, often causing discord between some residents and the companies that have been bringing more business to their towns and neighborhoods.

Now the problems are expanding again, as many cities are telling large tech companies that there are now limits to how much new office space can be built so that worsened traffic, even higher property values and other problems can be slowed or prevented.

In Mountain View, Calif., just south of San Francisco, LinkedIn recently won out over Google in the city's North Bayshore neighborhood where both companies were seeking permission to build new office buildings in the 2.2 million square feet of commercial space that the city is designating for additional commercial development, according to a May 6 story in the Silicon Valley Business Journal. The city granted building rights to LinkedIn for about 1.4 million square feet of that available space, leaving Google with 515,000 square feet. The problem with that is that would only be enough space for one piece of Google's proposed four-part campus expansion.

"To have one building—it's a significant blow," David Radcliffe, Google's vice president of real estate and workplace services, told city officials, according to the story.

Google initially had requested essentially all of the available office space in February under a new city land-use plan that saw much more demand than supply, the report said, but now will have to recalculate its plans. LinkedIn originally requested about 1.6 million square feet of space for a mixed-use project that is slated to include six office buildings, a new theater, a health club and a retail street, the story reported. About 12 percent of that request was cut away by the city, while about 78 percent of Google' request was axed.

LinkedIn can now submit formal building plans for its proposal.

The latest challenges for such companies come after earlier pushbacks in their communities from some residents who say they are angry that big tech companies build offices and attract employees from far away but don't do much to contribute to the neighborhoods surrounding them.

In San Francisco in early 2014, Google and other companies in the Bay Area agreed to start paying fees to the city to continue to use municipal bus stops where private buses had been picking up employees and delivering them to their workplaces around the region. An anti-gentrification group, Heart of the City, organized protests over the issue, arguing that commuter buses used by companies like Google, Facebook and Apple used city streets and tied up traffic, without ever paying their share of city costs and fees.

Other groups have complained that the tech companies displace residents with many of their building plans and cause real estate values to soar, making it harder for local residents to continue to live in their neighborhoods.