
Google and LinkedIn announce massive land swap - pm24601
http://www.mv-voice.com/news/2016/07/12/google-linkedin-announce-massive-land-swap
======
drewg123
As an Xoogler, I think this is great news. By the time I left a year ago,
there were far too many far-flung buildings in Sunnyvale, with new ones
opening all the time (and my group was -- and still is -- slated to move into
exile in Sunnyvale).

These were the worst of both worlds -- you still had to deal with a Bay Area
cost of living and commute, but you were too far to easily collaborate with
other groups, or take advantage of events & resources on the main GooglePlex
(TGIF at Charlies, author talks, various events, picking up dogfood hardware,
etc.) Not to mention fragmented bus routes.

~~~
justinlardinois
> you still had to deal with a Bay Area cost of living and commute

Isn't that true both before and after this? Nowhere anywhere remotely near
Mountain View or Sunnyvale has a reasonable cost of living.

~~~
Someone1234
They acknowledge that. That was their point, that in both scenarios you get
that downside but then pointed out a series of upsides of being on the actual
Google Campus.

Did you stop reading halfway through the sentence?

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mmanfrin
Corporations now swapping land to fix enclaves, much like nations do:

[https://en.wikipedia.org/wiki/Enclave_and_exclave](https://en.wikipedia.org/wiki/Enclave_and_exclave)

~~~
nshelly
I wonder how Bay Area land usage would change if property owners were paying
tax at the market rate for their use of the land. They would likely move more
employees to other offices, as they faced more competitive market forces. On
some tracts, Google and Intuit are paying a property tax rate 10-100x lower
than local homeowners and businesses who moved in recently.[1]

A "split roll" \- modifying the existing system for corporations, keeping the
existing for residential -- would level the playing field for large incumbents
and new market entrants, paying for office space at a much higher rate.

[1] _The assessed value of one 13.7-acre tract underlying part of Google’s
headquarters is $789,635, producing an estimated tax rate of 1.3 cents a
square foot, far less than most neighboring properties.

In interviews, commercial real estate experts said that both Google and the
property’s owner, Richard Peery, a septuagenarian Palo Alto real estate
developer and billionaire, were saving hundreds of thousands of dollars.
Commercial landowners often pass the cost of property tax on to their
tenants._

[http://www.nytimes.com/2012/02/24/us/california-property-
tax...](http://www.nytimes.com/2012/02/24/us/california-property-taxes-can-
vary-wildly-in-silicon-valley.html?_r=0)

~~~
brudgers
1\. 10x the tax would be $80 million. Google had $74.5 billion revenue in FY
2015. Paying the additional tax wouldn't change that. It's rounding error --
just a cost of doing business. On the other hand, Google relocating out of the
Bay area would take a lot of good jobs and housing demand with it. That might
impact local tax revenue more significantly than the savings companies like
Google receive. In the end, a bit of free market economics occurs in city
planning departments.

2\. Most significant commercial leases are triple net. The tenant is
responsible for taxes, maintenance, and insurance on the building.

~~~
nshelly
Yes, higher operational costs in the Bay Area - market-rate property taxes,
for example, would encourage Google and other large incumbents to grow or
relocate employees to more favorable locales, all things being equal. Of
course, there could be a specific machine learning expert that the company
receiving Bay Area-tied subsidies _must_ have, or a startup they would like to
acquire, whose employees refuse to work outside the Mountain View office. By
paying market rate rents, these companies would look more closely outside the
area and existing office space made available to new players - these new
market entrants are paying market-rate anyways. "Triple net" only affects long
term leases (usually 20-30 years, often longer) and as the real estate
consultants cited by the NYT, usually corporate space is not passed onto the
lessee (e.g. they would pay more for the lower tax base). Startups and new
mom-and-pop shops suffer (maybe the VC can became a long-vested landlord?).

Good point about local planning departments and equilibrium achieved that way.
Decreasing tax revenue with fixed costs (sewage, schools, highway, park
maintenance) should encourage planning committees to greenlight more new
development or better, zoning rights, to increase tax revenue. But this
assumes that the new construction would cover their outgoing expenses
(families require schools, and everyone needs transit and police services).
Thus, you see only a few luxury condos being added like in the San Antonio
shopping area in Mountain View.

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minwcnt5
Looks good on the City of Mountain View. All those years of fighting against
Google's expansion, awarding building rights to LinkedIn instead of Google and
decrying how the city was becoming a "one company town". Looks like that's
what they're getting anyway, only now Google gets the sweetheart (relatively
speaking) deal that LinkedIn had, while the city loses the benefits of the
more progressive Google plan that they rejected. At least they saved a few
burrowing owls, though - worth it?

~~~
pm24601
"1 company town"? Hah not hardly!

Lets see:

1\. Google 2\. Intuit 3\. Pure Storage 4\. Symantec 5\. Quixey
([https://www.quixey.com/](https://www.quixey.com/)) 6\. Matterport \+ a bunch
of startups that I have forgotten about.

There is a ways to go before Mountain View is a 1 company town.

~~~
thearn4
Don't forget NASA Ames/Moffett Field. Not a company of course, but a staple of
the bay area nevertheless.

~~~
pgodzin
[http://www.space.com/27741-google-leases-nasa-moffett-
field....](http://www.space.com/27741-google-leases-nasa-moffett-field.html)

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hyperrail
Microsoft's Silicon Valley Campus is also just north of the 101 Shoreline Blvd
exit - currently, it and LinkedIn HQ are only about 1 mile apart, possibly
within walking distance. If and when this deal goes through, this won't be the
case anymore, and so LinkedIn will be isolated from other Microsoft offices.

I guess it is too early for LinkedIn to be making decisions as part of
Microsoft...

~~~
ocdtrekkie
How big is Microsoft's presence in SV? Could they reasonably move along with
LinkedIn at some point?

~~~
hyperrail
I don't know the exact numbers, but when I left Microsoft a couple of years
ago, the following product divisions were among those based in the 6 buildings
of the Mountain View SVC
([https://www.google.com/maps/place/Microsoft+SVC+Building+1/@...](https://www.google.com/maps/place/Microsoft+SVC+Building+1/@37.4129045,-122.0787811,16z/data=!4m8!1m2!2m1!1smicrosoft+silicon+valley+campus!3m4!1s0x0:0xc1bc0e6d308e6c78!8m2!3d37.4115677!4d-122.0713422)
):

\- Outlook.com (formerly Hotmail)

\- Parts of Office for Mac OS X and iOS

\- Xbox hardware and accessories (Xbox software was in Redmond)

\- Windows Phone online services

\- Microsoft Research Silicon Valley (but that was closed in the first round
of layoffs several months after I left)

SVC was originally built for Hotmail and WebTV (remember that?).

Microsoft also had separate offices in Sunnyvale (in the big cluster of
relative skyscrapers just south of Moffett Field), which I believe were mostly
folks who came from Skype and/or Nokia.

~~~
bkjelden
PowerPoint, for all platforms (not just OS X and iOS) is developed at that
office too. PowerPoint has actually been in the bay area since it was
acquired.

The Web TV stuff was sold to Ericcson a few years ago, and they moved to an
office in San Jose at the end of 2015.

I think the Sunnyvale office was mostly teams working on Bing, as well as
handful of smaller acquisitions.

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kens
The deal involves 2.5 million square feet of office space. In comparison, the
Empire State Building has 2.2 million square feet. So this is a pretty big
deal. (I'm trying to imagine what Mountain View would look like with the
Empire State Building beside 101.)

~~~
epc
And 111 Eighth Avenue, Google’s NYC headquarters, is 2.9 MM square feet (I
think Google only occupies about a third of the building so far).

~~~
tomlu
I work there. They've expanded a lot. If my reckoning is right Google occupies
8/15 floors completely, and occupy fractions of a couple more floors.

~~~
ocdtrekkie
Is the rest of it empty or do they rent it?

~~~
droidist2
Their tenants include Nike, Deutsch Inc, Bank of New York and Barnes & Noble.
They also donated space for Cornell NYC Tech to hold classes there.

[https://en.wikipedia.org/wiki/111_Eighth_Avenue#Google](https://en.wikipedia.org/wiki/111_Eighth_Avenue#Google)

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brudgers
After reading about the history of the deal, my gut is Linkedin comes out way
ahead. They dumped the distraction of a complex real-estate deal and dumped a
real-estate strategy that was probably hatched around the time of its IPO. A
lot has changed since then.

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bitmapbrother
I often wonder why Google puts up with the Mountain View city council. They
should just relocate their headquarters to another part of the state and be
done with them. I'm sure there are a number of cities around that area, with
huge parcels of undeveloped or neglected land, that would gleefully welcome a
brand new Google headquarters. They've gotten too big for that area and their
recent real estate acquisitions in Mountain View looks like just a bunch of
dispersed buildings.

~~~
dapole
"huge parcels of undeveloped or neglected land." None of that exists anymore
in the bay area. Part of the reason you keep hearing about the housing crisis
here, it's all pretty much been developed.

~~~
rconti
Still plenty of NIMBYism. I know they're not "huge", but it's amazing how many
weed-filled parcels you see along El Camino in Menlo Park, San Carlos, etc.

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option_greek
Wow. That sounds like a lot of land. I'm curious as to why does Linkedin
require so much space.

~~~
Bahamut
LinkedIn has roughly 10k employees - they're in an arms race for office space
with Google and Apple in the area, but it sounds like this agreement should
resolve most of the issues with Google and LinkedIn. Being that LinkedIn's
headquarters is currently blocks away from the Googleplex and considering
Google's dominance of the land north of the 101, it has left LinkedIn with
little room to grow in its main cluster of buildings, and so it has been
forced to look in Sunnyvale. Unfortunately, Apple has also expanded quite
significantly into Sunnyvale in search of more land.

~~~
omellet
Why don't they just build taller buildings?

~~~
tn13
Biggest question I had when I first arrived in bay area. Gov. Regulation are
the reason why it is a bit harder to have taller buildings, tech companies
have lot of money to go for more land grab is the main reason.

If you are building a building with X floor area the city government requires
you to have f(x) area as open land. If you want to build a very tall building
it will have to look like the Saruman's Tower. This regulation is part of the
reason why Sunnyvale or Mountain View do not look like SF. It is also the
reason why property prices are so expensive. The good part however is that it
means less crime, better neighbourhoods and overall good quality of life.

~~~
rm_-rf_slash
Are the better neighborhoods, crime rates, and qualities of life a result of
lower-rise buildings, or because the cost of living is so high that only the
wealthy or upper-income can afford to live there?

~~~
justinlardinois
Asking the real questions. I'm not sure what the correlation between tall
buildings and crime is. "Better neighborhoods" is usually code for the sorts
of things people don't say in public and it seems to be that quality of life
is more dictated by your level of income rather than where you live.

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sethbannon
I really hope this means we'll get to see this beautiful new campus vision
come to life:
[https://www.youtube.com/watch?v=z3v4rIG8kQA](https://www.youtube.com/watch?v=z3v4rIG8kQA)

It was put on hold after Google lost development rights to needed property to
LinkedIn.

~~~
pm24601
Not entirely - both LinkedIn and Google faced building restrictions because of
traffic volumes. This makes it easier for Google to solve the traffic volumes
and get something built.

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__jal
So who wants to redo the Risk board to cover the South Bay?

~~~
Apocryphon
South Bay would be the main area, but it should properly include the entire
Bay Area as well.

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bubersson
It's all about the most strategic asset ... whoever gets Sports Page wins

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yeukhon
Just curious, is YouTube still operating in its own campus? San Jose, correct?

~~~
prodigal_erik
[https://www.google.com/about/careers/locations/san-
bruno/](https://www.google.com/about/careers/locations/san-bruno/)

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ChuckMcM
I was reminded of France and Spain dividing up the new world :-)

But more seriously, does Microsoft (LinkedIn's putative owner) give up the
remaining buildings near Shoreline and 101 (the former 'BARC' facility?)

~~~
aoki
MSR BARC was in downtown SF. did you mean the buildings around the late MSR-
SV? no sign of that yet.

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hn_user2
Also has a nice tax benefit. Thy can restart depreciation.

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ryanmarsh
Is this a 1031 exchange?

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ape4
Of course LinkedIn is now owned by Microsoft. Maybe they are moving to
Redmond.

~~~
ocdtrekkie
Telling 10,000 employees to move to Redmond isn't particularly practical or
likely. Particularly when they could likely find jobs with other Silicon
Valley companies instead.

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goodcjw2
Decent go player, well played!

