Google could delay millions in San Jose community funds

Time is money, and in Silicon Valley, that saying is exceedingly true. So when news got out that Google could postpone construction on its highly-anticipated San Jose megacampus, it raised eyebrows and concerns.

At stake is roughly 25,000 jobs and $155 million for a community fund that will be used to pay for education, job training and to try to prevent displacement following Downtown West‘s construction. These benefits will only manifest once Google employees occupy offices on the downtown San Jose campus.

“We all originally knew that it’s going to be a long-term plan,” said San Jose Councilmember Omar Torres, who represents the downtown. “But yes, it’s definitely concerning that a lot of the money is coming when the cranes are in the air.”

Nanci Klein, director of San Jose’s economic development department, confirmed to San José Spotlight that the $155 million for the community fund won’t be awarded until Google has completed its offices. The company is also not legally required to actually build its campus.

However, Google has not yet said they plan to pause construction, and Klein said the company has already gone above and beyond what is typically required of firms building offices in the city.

“Google has continued to be an extremely dedicated and good partner for the city: they have moved forward with demolition, and they have already done what most developers don’t do, which is give dollars up front before development takes place,” Klein told San José Spotlight. “So Google is already doing more.”

Regina Celestin Williams, executive director of housing advocacy group SV@Home, serves on the 13-member commission that will decide how to disperse $155 million to the wider community. This fund is meant to offset the economic effects, including a sharp increase in rents, that will likely result from Downtown West. A delay in the project could buy the city more time to protect residents from displacement, she said. The commission plans to hold its first meeting next month.

“Once they put in place that project and enact this tremendous expansion of San Jose’s downtown, it’s going to reshape the city,” she told San José Spotlight. “We as advocates are primarily concerned with how it affects the folks that are already here.”

A city within a city

Though Google has already paid San Jose $7.5 million, and has agreed to pay $15 million within 120 days of the start of construction, the remaining monies promised by the tech titan won’t be coming until Googlers are working on site.

Progress on projects the size of Downtown West, which spans about 80 acres and has been called “a city within a city,” can slow down or speed up as it reaches new phases of construction, an unnamed source at Google told San José Spotlight. The company has not announced whether it plans to postpone construction, only that it is “reassessing” its timeline. Google declined to answer additional questions about the project.

San Jose Councilmember Dev Davis said she was not surprised by Google’s announcement. Her district encompasses the entirety of the Downtown West project.

“We always knew that there was uncertainty about the community benefits, and that the community benefits were in large part tied to the actual project,” Davis told San José Spotlight. “The great thing is that we know that Google is committed to San Jose, and they fronted community benefits to us, and we have dollars in hand that we are able to use.”

The planned transformation of the Diridon Station area to the “Grand Central Station of the West” remains an important incentive for companies like Google to build campuses downtown, San Jose Mayor Matt Mahan said.

“With the state recently completing funding for Caltrain electrification and adding $375 million to the BART to Silicon Valley extension, the rationale for Google to invest in Downtown West is stronger than ever,” Mahan told San José Spotlight.

RJ Ramsey, an advocate for the unhoused who also serves on the commission, agreed that more time could allow for Google to shape the project in a way that minimizes disruption to local communities.

Though some residents remain nervous about Google’s impending arrival downtown, the $155 million community fund will do a lot to allay concerns, Ramsey said.

“If the commission does its job, this should be a win-win for all of San Jose,” he said. “Hey Google, take your time to get it right!”

Contact Sonya Herrera at [email protected] or follow @SMHsoftware on Twitter.

Editor’s Note: A previous version of this story had a lower amount for what Google has paid San Jose.