The Swiss pharmaceutical company Roche will close its Palo Alto office if its bid to acquire biotechnology giant Genentech is successful, according to Vice President of Communications Jacqueline Wallach.
Who would move into a campus that has won accolades for its environmental practices -- such as a 95-percent recycling program including everything from laboratory materials to coffee grounds -- is unclear.
It is certain, however, that Roche's departure will make a dent in the city's tax rolls, according to Mayor Larry Klein. The firm is one of the top 25 generators of sales tax and the top five generators of utilities tax, providing as much as $300,000 annually, he said. That's a tiny piece of the $145 million city budget -- the perhaps more significant impact is the loss of a "superb corporate citizen," he said.
The firm has partnered with the city on environmental and safety initiatives, he said.
Sandra Lonnquist, president of the Palo Alto Chamber of Commerce, summed up her mood in one word -- "sadness."
She echoed Klein's concern that the community will lose a civic-minded business leader.
This Monday, Roche offered South San Francisco-based Genentech about $44 billion to acquire the remainder of the company's shares. Roche has owned a majority stake since 1990.
If the Genentech deal goes through, Roche will close its own 1,000,000-square-foot research and development center in Stanford Research Park, which employs 1,000 workers, Wallach said.
The inflammation-research division would move to Nutley, N.J., and virology research would move to the Genentech facility in South San Francisco, she said.
But it's uncertain exactly when, because the Genentech acquisition offer hasn't been finalized yet, she said.
The laboratories are currently housed at 3431 Hillview Ave., at the intersection of Arastradero Road and Foothill Expressway.
The site's history runs deep. Earlier tenant Syntex -- perhaps best known for manufacturing "the Pill" for birth-control -- was one of the first companies in the then-named Stanford Industrial Park, formed in 1951 to promote the school's ties to industry and government.
Roche has been at the site since it acquired Syntex in 1994.
How much of a dent the departure of the massive firm would make in the local economy is hard to measure. Wallach said Roche would not reveal how many employees live in Palo Alto, and that it's too soon to say how many jobs, if any, would be lost.
And workers tend to use the in-house cafeteria -- the company has free-trade coffee delivered -- rather than drive off-campus for lunch, she said.
Some money will be lost, however, according to the mayor.
Roche generates between $80,000 and $120,000 in sales tax and between $140,000 and $180,000 in utilities-user tax annually, Klein said.
The departure also means losing money visitors spend, Lonnquist said.
"It definitely has a ripple effect, no question about it, when that many employees are not going to be here and visitors ... are not going to come in on a regular basis," she said.
Business visitors to the multinational company -- Roche's Web site cites 79,000 employees in 150 countries -- generate hotel tax, she said. They also spend on meals and gifts, she said, adding, "You arrive into town you want to bring a little something back for your locals."
The future of the site itself is also uncertain.
The Genentech offer comes just a week after the city announced Roche planned to install a rooftop solar-power system that would have been the largest in Palo Alto, with enough power for 172 homes.
Those plans are tenuous now, Wallach said.
"We probably need to evaluate if it's worth installing them or not because we're essentially leaving," she said, adding she didn't know when the decision would be made.
The solar-power system would have been merely the latest in a slew of environmental initiatives that have made Roche's campus well-known for its green leanings.
The 17 acres of on-campus lawns no longer consume water and chemicals -- they've been converted to drought-resistant landscaping. The vehicle maintenance fleet was replaced with 30 electric vehicles resembling golf carts. Air conditioning costs have been cut 60 percent by using light-colored roofing compounds and non-toxic insulation materials.
A member of the Dow Jones Sustainability Index, the company is frequently cited by Palo Alto officials as an example of a local business that successfully went green.
Now, it is up to Roche to find another tenant to occupy their environmentally-friendly campus.
According to Jean Snider, director of Stanford Research Park, Roche has a ground lease, a structure resembling ownership that makes the lessee responsible for the property.
Wallach said it's too early to say whom Roche will tap to fill the space, but acknowledged that with 760,000 square feet of laboratories, it may well be another scientific tenant.
"The question now is, 'Who can we woo?'" according to Lonnquist.
The Web firm Facebook, which houses 600 employees in a handful of downtown offices and confirmed last month it is looking for a central campus, did not respond to requests for comment on whether it would consider such a site.
Beyond the economic implications of Roche's move, Lonnquist described with disappointment how Palo Alto will lose a business quick to lead the environmental charge.
In addition to its own efforts, the firm has urged other research-park tenants to become certified green businesses, she said. It also partnered with the city's Utilities Department to design the zero-waste initiative.
"They've been serious leaders in the community. They've just been an outstanding partner," she said.
Chamber board member and Roche environment and safety Director Alex Haedrich has been a member of both the Green and Red Ribbon Task Forces to the mayor, focusing on environment and emergency-preparedness, respectively.