Google reassesses timeline for Downtown West megaproject in San Jose

Google — after laying off 1,600 workers across the Bay Area and announcing a $500 million cost to exit offices worldwide — is reassessing the timeline for its Downtown West village in San Jose.

The Mountain View-based search engine, which this month said it would forge ahead on its mega transit village near Diridon Station, now says it only remains committed to the project, the San Jose Mercury News reported.

“We’re assessing how to best move forward with Downtown West,” Sheela Jivan, Google’s Downtown West Development Director, told the newspaper in an email.

The timeline for the urban-retail village is expected to take years and could determine other plans for Downtown, where vitality has been sapped by business shutdowns from the pandemic and the trend to remote office work.

Alex Stettinski, CEO of the San Jose Downtown Association, said he hopes Google will resist a lengthy delay that leaves the west side of Downtown in its under-used state.

“We certainly don’t want to see acres of dormant construction sites for an extended time and hope the project will pick up shortly,” Stettinski said.

Google’s interest in Downtown San Jose has become a centerpiece for the city’s plans. Nevertheless, the Downtown West development must comport with the company’s overall real estate strategy, which is shifting as work patterns change, Jivan said.

“We’re working to ensure our real estate investments match the future needs of our hybrid workforce, our business and our communities,” Jivan said.

When finished, Downtown West will include up to 5,900 homes, 7.3 million square feet of offices, 500,000 square feet of shops and restaurants, a community center and 15 acres of parks.

The search giant has said it expects to employ up to 25,000 people in the new neighborhood 15 miles east of the company’s Mountain View headquarters.

For now, the firm expects to pay $500 million to shed offices related to 12,000 layoffs, or 6 percent of its workforce. The company intends to cut 1,600 Bay Area jobs. 

Google’s 80-acre Downtown West is being cleared for construction around Diridon Station — where Amtrak, BART, Caltrain, high-speed rail and other forms of transit are slated to meet — a project local leaders describe as the West Coast’s Grand Central.

The reductions in office space leases as well as decisions on how quickly to proceed with Downtown West are both components of Google’s overall assessment of its future real estate needs, according to the Mercury News.

“We’re still committed to San Jose for the long term and believe in the importance of the development,” Jivan said.

The company said it’s working with Lendlease, its development consultant for Downtown West, to review the scope of work for the project. 

“Everyone was aware that the actual timing of the project was yet to be determined. Nothing concerns me about this,” said Bob Staedler, principal executive with Silicon Valley Synergy, a land-use consultancy. “Downtown West is a long-term project that benefits both the city of San Jose and Google.”