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Originally published November 21, 2010 at 1:45 PM | Page modified November 21, 2010 at 9:13 PM

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Google envisions its own town

Google is prodding the city of Mountain View to transform the area around its headquarters, adding housing and retail to create more of a town center.

San Jose Mercury News

Searching Google

Founded: 1998

Founders: Sergey Brin and Larry Page

Headquarters: Mountain View, Calif.

Offices: More than 70 worldwide, including in Kirkland and Seattle.

Employees: More than 23,000 worldwide

Chairman and CEO: Eric Schmidt

Sales (third quarter 2010): $7.29 billion

Profit (third quarter 2010): $2.17 billion

Source: Google website

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SAN JOSE, Calif. — Google's aggressive online growth increasingly has a counterpart in bricks and mortar, with the company's Mountain View, Calif., headquarters mushrooming over the past four years to occupy more than 4 million square feet, or the equivalent of about 40 Home Depot stores.

But that's just a start. On Silicon Valley's NASA base, Google is preparing to build a new corporate campus with fitness and day-care facilities and — in a first in Silicon Valley — employee housing, adding 1.2 million square feet of space to Google's real-estate holdings.

While other tech giants also occupy vast amounts of real estate, Google is growing in a way that is distinct, remaking its surroundings according to its own values.

In addition to buying and leasing buildings and squeezing out some of its neighbors, it is prodding the city of Mountain View to transform the area around its headquarters, adding housing and retail to create an environment more like a town center.

The company's goals are to build a headquarters that would be "nurturing and regenerative to the environment, provide a vibrant community and work/life balance for all," Google real-estate chief David Radcliffe wrote to city officials earlier this year.

City officials say they are considering where housing could be built and how much of it is needed as part of the new citywide general plan. The city council could endorse basic concepts for that plan this month.

"I don't want to say it's the new company town," Gregory Davies, a vice president with commercial real-estate firm Cassidy Turley CPS, said of Google's role, "but it's not far from it."

In the past five years, as Google's global work force has expanded by sevenfold to more than 23,000 employees, the Internet giant's Mountain View holdings have grown to at least 4.2 million square feet and include more than 65 buildings, according to the company's securities filings and county tax-assessment data analyzed by the San Jose Mercury News. That is more than double the amount of space Google owned or leased in 2005.

The company also has offices in other locations across the country and world, including a complex of new buildings in Kirkland and offices in the Fremont neighborhood of Seattle.

Google strives to keep its real-estate plans under wraps. The company does not disclose the number of workers it has in Mountain View, and a Google spokesman also declined to discuss the size of the company's local real-estate holdings.

But given a common commercial real-estate benchmark of 200 to 250 square feet per worker, the company's Mountain View domain now likely accommodates 17,000 workers or more. Documents detailing the NASA project, made available under the federal Freedom of Information law, have been redacted to remove details such as how many Googlers would live and work at its Ames Research Center.

Employee head count

Google's hiring boom this year — its total employee head count is up 18 percent since January — has coincided with the company's return to "an opportunistic expansion mode" in real estate several months ago, said Davies, an expert on the North Bayshore area, the section of Mountain View where Google's buildings are concentrated.

Google reported in a Securities and Exchange Commission filing in February that it leased 1.6 million square feet of space in Mountain View, and owned 2.6 million square feet.

Other businesses feel pressured by Google's expansion, like Colin McDowell's McDSP, a tiny atoll bobbing in the Googley ocean.

McDSP's 1,682-square-foot office is now the only non-Google space in 1300 Crittenden Lane, a 115,000-square-foot building that Google bought in 2006 as part of a $319 million deal that also included the core Googleplex. McDowell, the CEO of the six-person audio-technology company, has a lease through 2014, but Google wants him out now. McDowell hasn't wanted to move, saying the rent is good and the offices are close to Shoreline Amphitheatre, where professional musicians frequently need McDSP's services on short notice.

As he enters his office each day and peers through a glass window into a Google break room replete with a Google-logo espresso maker, racks of candy, snacks and an often boisterous foosball table, McDowell says he can't help but feel a hint of jealousy.

"Could you just not flaunt it so bad?" he said of his landlord. "Not right in our face?"

McDowell said he now expects Google to subsidize McDSP's move and rent in a new home, although a deal has not been finalized.

Buildings reoccupied

About six months ago, Google took somebuildings it was selling off the market and has reoccupied them, commercial real-estate brokers say. Most recently, Google snapped up a 42,000-square-foot building it leased in August in an 84-month deal. Google's hunger for space is likely to force other companies to leave the area around its headquarters, real-estate insiders say.

Phil Mahoney, executive vice president of Cornish & Carey, recently relocated the semiconductor company MIPS Technologies to Sunnyvale, "as much as anything, getting out of Google's way."

"The handwriting is on the wall. You don't want to compete with them for space," Mahoney said. "In real-estate circles, it's called 'the Google effect.' "

Ties to NASA

Google plans to take its relationship with NASA to a new level starting in 2013, when it begins building the combined office and residential complex not far from the wind tunnel and supercomputer facilities at Ames. The new campus will rise on 42 acres of vacant land that look out toward San Francisco Bay. A Google-backed developer, Planetary Ventures, will pay $3.66 million a year to lease through 2048.

One reason Google needs to take such extraordinary steps as relocating six-person companies and expanding on federal land is because it is landlocked — hemmed in by adjacent Intuit, Highway 101, Shoreline Park and NASA Ames.

"You don't have a normal market," Davies said. "You have one of Silicon Valley's biggest users of real estate in a development-constrained location. The equation is strongly in favor of Google. They are the 800-pound gorilla in that sandbox."

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