Google San Jose village progresses, yet tech firm will ax office space


SAN JOSE — Google is pushing forward with plans to develop a game-changing transit village on the western edges of downtown San Jose — even though the search giant intends to slash some office space.

The two endeavors, while both tied to Google’s real estate holdings, are fundamentally distinct from each other and have different goals and timelines, according to the tech titan.

During a conference call to discuss fourth-quarter financial results for Alphabet and its principal operating unit Google, Chief Financial Officer Ruth Porat outlined plans for significant exits from currently leased spaces.

“Optimizing how and where we work” is one of the goals of the right-sizing of Google and Alphabet, Porat told Wall Street analysts and investors during the call on Feb. 2.

That optimization ties directly into Google’s existing and leased office space, the company’s chief financial officer stated.

In recent days, Google revealed plans to eliminate 12,000 workers worldwide.

“In the first quarter of 2023, we expect to incur approximately $500 million of costs related to exiting leases to align our office space with our adjusted global headcount look,” Porat said. “This will be reflected in corporate costs. We will continue to optimize our real estate footprint.”

This real estate downsizing will consist primarily of an exit by Google from building floors that the company has yet to occupy, a company spokesperson said. If the company hasn’t occupied the rented floors, those are candidates for an exit.

The real estate cutbacks that Google’s finance chief described in the conference call are not associated with the downtown San Jose transit village.

Google has sketched out plans to cut an estimated 1,608 jobs in the Bay Area, including 1,43.6 in Mountain View, 119 in San Bruno and 53 in Palo Alto, according to a Jan. 20 WARN notice that Google sent to state labor officials.

Despite the company’s flurry of efforts to reduce staffing, trim expenses and scale back its use of office space, the search giant’s efforts in downtown San Jose are proceeding.

Google has begun to demolish buildings to clear the way for the first phase of the company’s new transit-oriented neighborhood, which will consist of office buildings, homes, shops, restaurants, hotel facilities, open spaces, cultural loops and entertainment hubs.

The search giant intends to employ up to 25,000 people in the proposed transit village, officially known as Downtown West, near the Diridon train station and SAP Center.

Ahead of the full-fledged start of construction, Google will build an array of infrastructure, including water and sewer lines that are a prerequisite for the first phase of the company’s new neighborhood. Google also plans to build a green energy plant to serve the ambitious development.

Google still intends to break ground by the end of this year on the first phase of the transit village, according to a company spokesperson.

Nevertheless, no guarantees exist that the Downtown West project will definitely avoid slippage in its development timeline.

In recent days, Google completely demolished a building at 140 South Montgomery Street where a vendor of industrial gases had operated for decades.

Across the street, the demolition of the old Sunlite Bakery Bread Depot building at 145 South Montgomery is well underway. A Google contractor has completely removed the back half of the building.

Google aims to salvage the Art Moderne-style entrance of the old bakery building and deploy it permanently somewhere else in the transit village project.

The front half of the one-time bakery has been hollowed out on the inside with portions of walls and the roof already removed.

The shuttered Patty’s Inn, a long-time watering hole at 102 South Montgomery Street, is expected to be completely bulldozed.

The former Hellwig Iron Works building, constructed sometime around 1935 at 150 South Montgomery, is slated to be reused, although some additions could be made to the structure.

After the ironworks closed its doors, Navlet’s Florists and a Taiko performance studio also operated in the distinctive brick building.

It’s likely that the Hellwig Ironworks could be expanded as part of the building’s reuse, according to documents on file with city officials.

“One or more additions and adaptive reuse of the building to accommodate new arts and cultural uses” are envisioned as part of the Hellwig structure’s future, the city documents show.



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