Google Signs 40-Year Lease To Roost Near NASA
“Google has acquired 42.2 acres of space from NASA as part of an accord that will stand for a minimum of 40 years.”
Mountain View, Calif., – In the most recent mark of its ambitious growth plans, Google Inc. has struck a 40-year lease deal to expand its huge office complex by 50 percent that will be built on a federal government’s former naval air base turned space research center near the Internet search giant’s Silicon Valley headquarters.
According to the terms of the 40-year lease agreement, Google will lease 42.2 acres of open space at NASA Research Park at Ames close to its own headquarters in Mountain View for as much as $146 million over the life of the deal.
Under the terms of the lease, the construction of 1.2 million-square-foot campus-style setting of office and research and development facilities on 42.2 acres in the research park announced Wednesday fulfills a vision that Google first laid out with the NASA Ames Research Center in 2005.
By the end of 2013, Google said it will commence construction on 1.2 million square feet of offices for research and development, in an effort to accommodate its growing staff of about 20,000. NASA Ames will oversee construction.
The NASA center is within a 10-minute drive of Google’s headquarters in Mountain View. Google said it will pay NASA an initial rent of $3.66 million per year, although that figure could increase over the years. Also, the lease could be extended for up to 90 years, according to a Google statement.
“This long-term lease agreement is a major component of Google’s strategy for continued growth in Silicon Valley,” said David Radcliffe, Google’s vice president of real estate and workplace services. “We believe this collaboration between Google, NASA and the city of Mountain View is symbolic of the mutually beneficial partnerships that can be created between the public and private sectors.”
The untapped land between Moffett Field, the Googleplex headquarters and the wetlands of San Francisco Bay gives Google room to build up to 1.2 million square feet (111,500 square meters) of offices and campus research facilities.
NASA Ames director Pete Worden said in a recent interview that Google’s lease for the airplanes and related public-private partnerships are a win-win for NASA. The space agency, for example, has had use of the Google airplanes for research, he said. “We are defraying government costs. And it is not really a sweetheart deal. The use of the facility is pretty expensive,” Worden said.
Google predicts requiring the extra space for the growing number of workers it hopes to hire as it tries to mine more profits from the Internet’s advertising market and expand into other areas of technology and media.
Since the past four years, Google has added more than 17,000 employees to increase its payroll to 19,156 workers. The growth has prompted the company to lease or buy many of the smaller offices circling its headquarters, a 1-million-square-foot campus that Google purchased for $319 million in 2006.
The agreement, which was discussed over the last year, builds on other real estate transactions between NASA and Google. Last year, Google co-founders Larry Page and Sergey Brin along with CEO Eric Schmidt reached a separate deal to pay $1.3 million annually to house land their four jets, including Boeing 747, at Moffett Field, where they will build a new campus, according to a New York Times report. The deal was criticized as a sweetheart deal for billionaires.
NASA hopes to use the earnings to help pay for maintenance and capital improvements at Ames, now a limited use air field that also is home to 40 tenants including 30 companies, six non-profits and several university campus extensions. The facilities stretch across 2,000 acres, the spokesman said.
Michael Mewhinney, NASA Ames spokesman said in a statement that Google’s lease proceeds will help pay the $7 million operating cost of the air field and other services at Ames Research. Roughly $4 million already comes from other organizations leasing space.
And, to be eligible to be a leaseholder on the land, organizations, both commercial and non-profit, must be involved in activities related to NASA’s research agenda, which includes not just space, but biotechnology, nanotechnology and defense projects.
Tenancy “is not available to anybody off the street that says, [Oh, I want some prime real estate in Silicon Valley at fair market value,]” Mewhinney said.
Construction will proceed in three phases:
Google plans to commence the first phase of its construction by the end of September 2013. (It is still in the process of working up designs, according to a Google representative.) The second phase will begin by 2018 and the third by 2022.
The company did not specify the parameters of construction during each phase, but it said that the lion’s share of space will be devoted to office space and research and development labs. Google also plans to construct company housing and amenities such as dining, sports, fitness, child care, conference and parking facilities for its employees, as well as recreation and parking facilities and infrastructure improvements for NASA’s use.
“Google anticipates the setting of its new offices will make it more promiscuous to draw on the brain power of NASA’s rocket scientists and give it another competitive advantage over its rivals.”