News

EXCLUSIVE REPORT:
HP considers moving, but will 'stay in Palo Alto'

Leaders came close this year to deciding to move its world headquarters to Cupertino, where it owns more land than it leases in Palo Alto

Hewlett-Packard Company early this year took a long, hard look at moving its corporate headquarters out of Palo Alto to Cupertino but has decided -- for now -- to stay put, according to reports leaking out of the historically Palo Alto-based firm Tuesday evening.

An internal memo sent Tuesday to employees at HP's corporate headquarters at 3000 Hanover St. and at its labs and former headquarters at 1501 Page Mill Road announced the decision -- to the joy of numerous Palo Alto and nearby residents who work for HP.

The reports were confirmed by one HP official who asked not to be identified by name, and inadvertently by a senior legal counsel who sent out an e-mail to leaders of community organizations.

The consideration of a move has been underway "for some time," but reportedly came to a head within the last two months.

The decision to remain in Palo Alto maintains "the commitment to this community that began when Bill Hewlett and Dave Packard were starting their work in Dave's garage on Addison Avenue in 1939," one corporate official, Senior Legal Counsel Hal Mickelson, said in a limited-circulation e-mail to community groups. HP went public in 1957 following rapid growth from World War II through the early 1950s.

Mickelson said he didn't know when an official announcement would be made but "you're all welcome to pass this news along to anyone in your organizations who may have a need to know."

He said an internal message "was circulated to employees here at HP's corporate headquarters today with the great news that after full review of our company's real estate strategy for the Bay Area, HP will remain in Palo Alto."

"You might be surprised to learn that there were proposals on the table that we move all our local operations to Cupertino," he wrote, adding that "those of us who are longtime Palo Alto residents are delighted that those proposals were considered and rejected."

HP "will be vacating a couple of the old Stanford Park buildings at 1501 Page Mill, but also retaining several buildings at 1501, and trying to make our use of the newer 3000 Hanover facilities more efficient in a number of ways," he said.

Other reports are that HP will keep buildings 1 to 3 at 1501 Page Mill active but pull out of buildings 3, 4 and 5 because they are underpopulated.

Hewlett's and Packard's original offices are in the buildings 1-3 complex, preserved with their original furnishings and referred to as "Bill's and Dave's offices" by many in HP.

HP leases all its Palo Alto properties from Stanford University in five separate leases that expire at different times.

The official noted that the decision to consider moving to Cupertino was part of a larger, even worldwide consolidation of HP properties that began with the acquisition of Compaq computer in the early 2000s, under former President and CEO Carly Fiorina.

Following her termination by the HP board in February 2005, new CEO Mark Hurd accelerated the process of divesting properties deemed surplus or excessive -- including the "Little Big Basin" recreational land in the Santa Cruz Mountains and two other such properties elsewhere.

It also has curtailed operations in Mountain View, Fremont, Sunnyvale, and San Jose in favor of consolidation in Cupertino, where since the acquisition of Compaq it owns outright more land than it leases in Palo Alto and operates a shiny "customer briefing center" for prospective clients.

HP also owns property in Germany, Northern California and in Houston, Texas, the former headquarters of Compaq, in addition to such far-flung locations as Fort Collins, Colo., and Boise, Idaho, and Corvallis, Ore.

It is said that the latter three locations were acquired because they were favorite areas of "Bill and Dave" for outdoor activities.

Even HP's research activities are being consolidated into more targeted or focused areas showing the highest promise, HP officials announced this month.

But just as HP drifted -- or was yanked -- away from the historic "HP Way," it also has drifted from the awareness of its roots in Palo Alto, both at the rank-and-file and leadership levels, one official noted.

Today more than 65 percent of HP employees worldwide are based overseas, and fewer than 10 percent of the approximately 2,500 employees working in Palo Alto are actual residents of Palo Alto -- although many others reside in nearby communities on the Peninsula.

Hurd, who came to HP from Dayton, Ohio, now resides in Atherton and only two of a number of recent management-level hires have moved into Palo Alto, one HP official noted.

More than twice as many employees work in Cupertino HP facilities as in Palo Alto, and housing is less expensive.

On the other hand, Cupertino is at least as difficult a city with which to deal as Palo Alto, the official said. Neither city has particularly gone out of its way to make a large company feel welcome or an important part of the community, the official said.

And there is the tradition of history, including "Bill's and Dave's offices," to weigh in the balance.

But in the longer, bigger picture, the overseas threat may outweigh history and tradition, as countries pour millions into building up electronic-communications infrastructure, in producing highly educated engineers and specialists, and in cultivating corporate officials, the HP official noted.

The firm is currently riding high in revenues and recent successes, surpassing even IBM in sales recently.

But in a future down cycle, when things get tight or a further wave of consolidation occurs, the official speculated that within a few years even an overseas location -- where the bulk of employees are already gravitating and countries are eager for high-tech expansion -- might weigh more heavily as an alternative world headquarters site compared to a community with lagging infrastructure and where fewer and fewer HP employees reside.

(Weekly Editor Jay Thorwaldson can be e-mailed at jthorwaldson@paweekly.com.)

Comments

Like this comment
Posted by Mike
a resident of College Terrace
on Mar 19, 2008 at 8:12 am

Consider them gone.

hp, Thanks for everything. It's been nice knowing you.

What we have here is just one more indication of the loss of American hegemony in most things commercial.

This is just one more clue toward the future, and how Palo Alto can no longer rest on laurels.

Recently, Steve Jobs addressed Cupertino's City Council, explaining that after a long consideration of its place in Cupertino, it had decided - after much review - to commit to Cupertino by purchasing a considerably large plot of land in Cupertino, and consolidating its central organization there.

Web Link

from the article, above:
"More than twice as many employees work in Cupertino HP facilities as in Palo Alto, and housing is less expensive."

That's right, and so why aren't we working to find ways to diversify our housing supply with infill around transit corridors, and coordinating that effort with local commercial entities?

We can wring our hands all we want about the coming of future constraints, but the fate of the future of our city as a key player in this region will only come if we put those hands to work, in true partnership with the key commercial players in our region, and elsewhere.

Who was it that said that Palo Alto is a "slam dunk" when it comes to commercial draw? IN light of hp's and other recent decisions by commercial agents, perhaps it's time to get busy at the policy level and get serious about business development in a way that looks to sustainable commercial and housing futures - they're interrelated.


Like this comment
Posted by so
a resident of Another Palo Alto neighborhood
on Mar 19, 2008 at 8:36 am

So Mike College Terrace is ideally situated for dense housing to accomidate HP and transit access is a short walk to the CalTrain. Will you be advocating that College Terrace lead the way and convert over?


Like this comment
Posted by Resident
a resident of Another Palo Alto neighborhood
on Mar 19, 2008 at 8:51 am

Cupertino Elementary School District is one of the best in the Bay Area, it even surpasses Palo Alto schools in achievement, so why stay here. Or as my son tells me Cupertino has young people, Palo Alto is full of old people!!!




Like this comment
Posted by mark
a resident of another community
on Mar 19, 2008 at 10:06 am

Interesting to learn that I live in Colorado.

"HP also owns property in Germany, Northern California and in Houston, Texas, the former headquarters of Compaq, in addition to such far-flung locations as Fort Collins and Boise, Colo., and Corvallis, Ore."


Like this comment
Posted by N/A
a resident of another community
on Mar 19, 2008 at 10:19 am

Mexico here we come


Like this comment
Posted by Walter_E_Wallis
a resident of Midtown
on Mar 19, 2008 at 11:29 am

HP is still here but the HP Way is long gone.
Cupertino has better schools because they have more Asian students.


Like this comment
Posted by HP_in_Colorado
a resident of another community
on Mar 19, 2008 at 12:30 pm

"HP also owns property in Germany, Northern California and in Houston, Texas, the former headquarters of Compaq, in addition to such far-flung locations as Fort Collins and Boise, Colo., and Corvallis, Ore."


By the way, editor, Boise is in Idaho.... not Colorado.


Like this comment
Posted by bikes2work
a resident of Santa Rita (Los Altos)
on Mar 19, 2008 at 12:36 pm

Walter, that's racist (but true ;-)


Like this comment
Posted by Mike
a resident of Midtown
on Mar 19, 2008 at 1:33 pm

Are they going to take their Garage with them?


Like this comment
Posted by Tom Palo Alto
a resident of Old Palo Alto
on Mar 19, 2008 at 2:22 pm

"so" provides an apt rejoiner to "Mike", who wants more housing (presumaably affordable) built in Palo Alto. Maybe Mike can put his money where his mouth is by allowing his house to be torn down and apartments to be built there. Oh, and we need Mike cough up his entire net worth to subsidize the construction so that those apartments can be rented for below-market rates. Jump in, Mike.


Like this comment
Posted by John
a resident of College Terrace
on Mar 19, 2008 at 2:30 pm

Mike and his pals are targeting California Ave. as a hot spot for ABAG housing, including many BMRs. My best guestimate is that eactly zero HP employees will decide live in those high density sardine cans. None of them will qualify for BMRs.

What is Mike talking about, folks?


Like this comment
Posted by so
a resident of Another Palo Alto neighborhood
on Mar 19, 2008 at 3:15 pm

so Tom, I dont think Mike has to allow the tear down. Its easy. Palo Alto just legaly seizes the property citing eminent domain and has their favorite developer come in and build high rise appartments. It might as well seize JJ&F because the neighbothood will need a huge Safeway there instead. This will allow the occupants to walk to the grocery, walk to HP, walk to Caltrain and since they are HP employees, I bet Fry's would do more business creating more sales tax revenue for the city. It would also have a side effect of saving the college terrace library branch, because now the area would have the population to justify the expense. As I see everyone wins. HP, Mike, the city, even Fry's. Turning over those old poor constructed buildings for modern insulated buildings should help with energy waste too.


Like this comment
Posted by HP employee
a resident of Midtown
on Mar 19, 2008 at 4:37 pm

Or just take all of the empty office space in Palo Alto (look around) and build housing that an HP employee could afford to buy.

Seriously, I am bummed about this. I work at HP in Palo Alto and am sorry to hear that they won't be moving to a site where I can afford to buy and still have a decent commute.


Like this comment
Posted by so
a resident of Another Palo Alto neighborhood
on Mar 19, 2008 at 4:49 pm

so Cupertino is more affordable? Where were you thinking you could buy on the penninsula that is affordable?


Like this comment
Posted by HP employee
a resident of Midtown
on Mar 19, 2008 at 4:54 pm

Yes, other area's on the Penninsula are chaper than Palo Alto. Also, I said "and still have a decent commute". A San Jose/Santa Clara condo is cheaper than a Palo Alto/Menlo Park condo.


Like this comment
Posted by chris
a resident of University South
on Mar 19, 2008 at 4:57 pm

So are buildings 4/5/6 at 1501 Page Mill going on the market or are they going to be redeveloped.

Did the Weekly ever say what happened to the Google move into 395 Page Mill? Why is Foothill considering it?


Like this comment
Posted by so
a resident of Another Palo Alto neighborhood
on Mar 19, 2008 at 5:10 pm

add 7 minutes to your commute and you are in Palo Alto


Like this comment
Posted by HP employee
a resident of Midtown
on Mar 19, 2008 at 5:11 pm

Sorry, I meant relatively affordable. Easier to swallow than moving to Houston.


Like this comment
Posted by so
a resident of Another Palo Alto neighborhood
on Mar 19, 2008 at 5:17 pm

well I definately don't think you would like the commute from Houston to Cupertino. ;^)


Like this comment
Posted by Eric
a resident of Another Palo Alto neighborhood
on Mar 19, 2008 at 6:00 pm

Well, I heard the other night that GOOGLE may be re-leasing 395 Page Mill Road because they've found some other digs - check this out.


Like this comment
Posted by John
a resident of Old Palo Alto
on Mar 20, 2008 at 1:39 am

Well, the article points out that this may not be about Palo Alto vs Cupertino, or even Palo Alto vs Houston. Rather we should be thinking Palo Alto vs London, Brussels or Singapore as a site for HP's future corporate functions, given that only 30% of HPs business occurs in the United States.


Like this comment
Posted by Glad He's Gone
a resident of Another Palo Alto neighborhood
on Mar 20, 2008 at 4:47 am

Anybody remember this--
-----
Web Link
Publication Date: Wednesday Jan 10, 2001

TRANSPORTATION: An 'elegant' people mover?

Proposal calls for monorail system for Stanford Research Park
by Daryl Savage

It's a cross between monorail and gondola technology, it will cost an estimated $50 million, and it's headed for Palo Alto. If someone can find the $50 million.

Palo Alto's chief transportation officer Joe Kott--who takes public transportation to work daily--calls it "a newfangled monorail." He describes the project as an elegant system of an automated people mover. While there is no source of funding identified for the futuristic system, those who support it call it a "very real project
----

The people who opposed the Palo Alto Transportation Official's ideas that always pushed past wackiness into craziness would have had the city pay for this massive white elephant only to see HP fly the coop.


Like this comment
Posted by Walter_E_Wallis
a resident of Midtown
on Mar 20, 2008 at 6:09 am

Why does it matter where information workers work? Don't ask what I wear as I ply my profession 20 feet from my bedroom. What are you wearing???


Like this comment
Posted by another resident/shopper
a resident of Another Palo Alto neighborhood
on Mar 20, 2008 at 10:39 am

Maybe the HP site can be converted to housing or a big box supermarket/retail/Home Depot/auto dealer or some other tax producing site that will help pay for the 60 million (or is that 150 million)dollar police bldg.


Like this comment
Posted by chris
a resident of University South
on Mar 20, 2008 at 2:14 pm

Why not build housing for HP and other Stanford park employers on the site where HP buildings 4/5/6 are now?

That would help reduce the traffic jams on Page Mill.


Like this comment
Posted by Walter_E_Wallis
a resident of Midtown
on Mar 20, 2008 at 4:47 pm

Didn't Mountain View do some housing in industrial area projects? How did that work?


Like this comment
Posted by Cupertino Resident
a resident of another community
on Mar 21, 2008 at 1:36 am

Where did anyone get the idea that Cupertino was affordable? Did you know that you can get 1400 sq. ft. for the bargain price of 1.2 mil. here? Did you know that our schools may be #1 in the state but that our teachers are in very iffy contract negotiations and between the state budget cuts and the local school district superintendent that little bragging right might get you about as far as $1 worth of gas? Did you know that unless you're Asian or Indian your children will be in a less than 5% minority in their school? And here's a real bonus - unless you can read Chinese - there are businesses you just have to take a guess at because you'll never know what they are. We've lived here our whole lives but the past few years have given us the desire to leave as soon as we retire. We never thought we would.


Like this comment
Posted by Bob
a resident of Adobe-Meadow
on Mar 21, 2008 at 6:48 am

John, I think HP will be staying here in PA if their other choices are London, Brussels or Singapore. If you think Palo Alto is expensive; try buying or leasing space in one of those cities for less money than you pay here - good luck.

Palo Alto may seem expensive compared to most of the U.S. but compared with London, Brussels or Singapore we are cheap. Europe is hugely expensive today, blame George Bush, the Iraq war, and the falling value of the dollar.




Like this comment
Posted by A Lone Star Has No Competition
a resident of Another Palo Alto neighborhood
on Mar 21, 2008 at 10:46 am

> I think HP will be staying here in PA if their other
> choices are London, Brussels or Singapore.

What about Texas?


Sorry, but further commenting on this topic has been closed.

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