Google, Lendlease end development pacts, including downtown San Jose

SAN JOSE — Google and its real estate partner Lendlease have terminated a partnership to develop four huge Bay Area projects, including a vast transit-oriented neighborhood in downtown San Jose — but all four projects will still proceed, Google says.

Mountain View-based Google said it is still working to move the projects forward, including the downtown San Jose transit village that is poised to be a game-changer for the Bay Area’s largest city.

“Lendlease and Google announced today they have mutually reached an agreement to end the development services agreements of four master-planned districts,” Lendlease stated in the web post.

These are the four projects and their general locations involved in the now-terminated Google-Lendlease alliance:

— Downtown West, a downtown San Jose mixed-use transit village near the Diridon train station and the SAP Center.

— Sunnyvale, the Moffett Park area.

— Mountain View, Middlefield Park.

— Mountain View, North Bayshore.

“The decision to end these agreements followed a comprehensive review by Google of its real estate investments, and a determination by both companies that the existing agreements are no longer mutually beneficial given current market conditions,” Lendlease stated.

In the wake of the coronavirus outbreak in early 2020, state and local government agencies imposed wide-ranging business shutdowns to curb the spread of the the virus, and those decisions chased office workers away from their places of employment.

While the coronavirus dangers have ebbed, the return to the office has occurred unevenly. Numerous tech companies have drastically scaled back their appetite for office space and expansions.

“As we’ve shared before, we’ve been optimizing our real estate investments in the Bay Area,” said Alexa Arena, Google’s senior director of development said Thursday. “Part of that work is looking at a variety of options to move our development projects forward and deliver on our housing commitment.”

Downtown San Jose’s economy has mounted a noticeable recovery from its coronavirus-linked maladies, though city leaders have acknowledged that challenges remain.

“San Jose has the fastest recovering downtown in California and third fastest in the nation,” San Jose Mayor Matt Mahan said. “And Google’s Downtown West campus will only add to this rapid recovery we are witnessing.”

In September, a top executive of Google’s parent company Alphabet joined a block party and made it clear the tech titan still aims to build a huge mixed-use neighborhood in downtown San Jose. Ruth Porat, president and chief investment officer with Alphabet, spoke at a Creekside Socials gathering that was the first of many planned as a way to bring people to the western edges of downtown San Jose where the transit village is slated to sprout.

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