News

VMWare plans massive expansion in Palo Alto

Cloud-computing giant to buy former Roche site, nearly double its work force

Palo Alto's information-technology giant VMWare is preparing to gobble up one of the largest and most lucrative research spaces in Palo Alto -- a 1-million-square-foot property formerly occupied by pharmaceutical company Roche.

City Manager James Keene confirmed Wednesday night (May 25) that the deal is in the process of getting finalized. The lease of the former Roche property, which makes up about 10 percent of the entire Stanford Research Park, would dramatically expand VMWare's presence in the bustling technological hub and allow it to nearly double its work force to about 6,000 employees, making it the largest employer in the city.

The acquisition of the Roche property is one of several recent expansion projects for VMWare, which is a worldwide leader in the rapidly emerging fields of "virtualization" and cloud computing. The company had recently expanded its Hillview Avenue campus by 460,000 square feet and built a new gymnasium. According to the San Jose Mercury News, VMWare beat Google and other potential buyers for the former Roche site and is paying $225 million for a lease that will expire in 2045.

The property, which makes up about 10 percent of the research park, has been one of few glaring vacancies in a research park that is otherwise almost completely built out. In the last few years, the Stanford Research Park has seen an infusion of hot, young companies such as Facebook, Skype, Tesla and Better Place. The park is also home to a long list of established industry titans, including Hewlett Packard, Varian Medical Systems and SAP.

VMWare has been eyeing the Roche site for some time. Planning Director Curtis Williams said company officials approached the city several months ago to inquire about various regulations at the site. Keene said the deal is expected to get finalized in the coming weeks. He praised VMWare's expansion as another positive sign for the city's already bustling high-tech scene.

"I think this is great news," Keene said. "VMWare is the cornerstone of the cloud-computing community.

"It's a good convergence of our energy focus and our innovation focus," Keene said.

Comments

Like this comment
Posted by Facebookie
a resident of College Terrace
on May 26, 2011 at 10:01 am

Makes me wonder why Facebook didn't move into some of those empty buildings? There is more than enough space for them. Was Facebook that desperate to leave town?


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Posted by Resident
a resident of Another Palo Alto neighborhood
on May 26, 2011 at 10:23 am

Glad to see the empty office space is going to be used again - we need to get rid of the vacancies all over town. But, I agree that it is a shame that Facebook wasn't able to use this site.


Like this comment
Posted by Kate
a resident of Duveneck/St. Francis
on May 26, 2011 at 10:25 am

And they want housing---WHERE??? They are going to commute on WHAT streets?
They've got kids who want to go to school WHERE?


Like this comment
Posted by Facebookie
a resident of College Terrace
on May 26, 2011 at 10:28 am

The city should have planned for housing and schools when these building were first constructed. These are not new office buildings.


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Posted by Too much traffic
a resident of Another Palo Alto neighborhood
on May 26, 2011 at 10:40 am

As is demanded of Stanford, VMWare should have to guarantee no new net car trips into the city and provide housing for it's workers.


Like this comment
Posted by Consider a Green Alternative
a resident of Barron Park
on May 26, 2011 at 11:14 am

VM Ware could put an effort in trying to hire from within Palo Alto or nearby residents.


Like this comment
Posted by realistic
a resident of Midtown
on May 26, 2011 at 11:39 am

re: "VMWare should have to guarantee no new net car trips into the city and provide housing for it's workers." That would be a great way to keep the building vacant. Should it also be applied to all new leases of existing buildings? I think not. IMHO the only fair and leveraged mechanism is to apply to new construction and probably only in cases of "upzoning" such as Stanford and all these developer-requested PCs such as Alma development. How does letting them add extra workers, likely with no sales tax revenue, and less housing than workers, head us in the right direction?


Like this comment
Posted by Facebookie
a resident of College Terrace
on May 26, 2011 at 11:45 am

The Stanford shills have their math wrong again. The developer already paid for the transportation issues when they built the buildings. VMWare is not building new buildings. This is a lot different from Stanford building a whole new set of buildings with zoning changes.


Like this comment
Posted by Too much traffic
a resident of Another Palo Alto neighborhood
on May 26, 2011 at 11:46 am

"That would be a great way to keep the building vacant. "
That may be the best solution for Palo Alto, considering how our quality of life is being degraded by all this traffic (that is what we have heard for years, so it has to be true). People tell us how terrible the traffic is in our city and and how even one new net car trip into the city is too many. Plus our quality of life is being degraded by new businesses in Menlo Park, EPA ad Mountain View that put traffic into our city. Traffic is terrible here (or so they tell us). We need to take a stand.


Like this comment
Posted by Too much traffic
a resident of Another Palo Alto neighborhood
on May 26, 2011 at 11:54 am

"The Stanford shills have their math wrong again. "
You can be sure that the College Terrace shills will be up in arms if they feel that their enclave will be affected by traffic to/from the research space. Look how they made Facebook unwelcome.


Like this comment
Posted by the_punnisher
a resident of Mountain View
on May 26, 2011 at 12:39 pm

For housing, the new MTN VIEW development where the old Sears store is being demolished is a safe bet...

I'm just glad that PA doesn't have any ROCHE infestation anymore...

A word of advice: Be nice to VMWARE.....


Like this comment
Posted by etaoin shrdlu
a resident of another community
on May 26, 2011 at 1:05 pm

Eek!
Traffic, traffic, traffic!
Housing, housing, housing!
Schools, schools, schools!

Quick, hire a consultant!
Surely, Palo Alto can figure out how to extort VMware like it does Stanford.


Like this comment
Posted by One of the hills people
a resident of Los Altos Hills
on May 26, 2011 at 3:29 pm

Palo Alto,
Quit complaining. You are not likely to be affected by this. But for those of us in Los Altos Hills who live off of Arastradero Rd, this is going to be ghastly for traffic. Everyone should avoid Arastradero Rd going West from 4:00-6:00 pm. It will be a parking lot! Oh, and Los Altos Hils never gets to weigh in on any of the traffic that clogs our streets because the PA city council never shares information. And just ask the drivers exiting 280 south at Page Mill Rd in the morning how long it takes to get through that stop sign. Now add 3000 more cars (that assumes half come from the north and half from the south) and see what a total mess it will be......


Like this comment
Posted by John
a resident of Midtown
on May 26, 2011 at 4:02 pm

Under no circumstances should Palo Alto listen to traffic complaints from Los Atos Hills. The building boom in LAH, which made many LAH residents even richer, is the main cause of increased traffic in that area. The VMWAre buildings are largely the old Syntex buildings, which were built several decades ago. LAH cannot be allowed to have it both ways.


Like this comment
Posted by Not-True
a resident of Another Palo Alto neighborhood
on May 26, 2011 at 7:33 pm

> The developer already paid for the transportation issues when they
> built the building

This is not true. There were no transportation impact fees in place when those buildings were built. Further, the current impact fees are a joke. No matter what developers pay, their dollars flowing to the City do not mitigate the impact of the new traffic flowing through our streets based on new development.


Like this comment
Posted by resident
a resident of Duveneck/St. Francis
on May 26, 2011 at 9:38 pm

You can't have it both ways. There are many very intelligent people in this town that are
underemployed or unemployed. The jobs are going to help us all. We'll figure out the traffic situation. Maybe they can have buses like Google or incentives for employees to take the train and have shuttles. Or maybe they'll ride their bikes.


Like this comment
Posted by observer
a resident of Menlo Park
on May 27, 2011 at 10:37 am

PA residents should really be pleased that your City Staff pushed Facebook away. Menlo Park now stuck with them. They produce little sales tax revenue, since their income stream is from advertising. VMWare will produce plenty.


Like this comment
Posted by Hmmmm
a resident of Midtown
on May 27, 2011 at 10:54 am

Sounds reasonable..if you can fit the homes with designated underground parking, and build UP, we can still keep our green areas and some "space" and have productive businesses that support our city as well.


Like this comment
Posted by nonsense
a resident of Greenmeadow
on May 27, 2011 at 11:25 am

What is the point,we residents do not get a dime from it,forget about it.If Menlo park wants it,both can go.


Like this comment
Posted by mjm
a resident of Los Altos Hills
on May 27, 2011 at 11:26 am

@John,
LAH is a bedroom community--there are no companies, stores, etc--only homes.

The new building I think you are referring to is part of Stanford land--everything to the north of Arastradero road is Stanford land--even Gunn High School. The new buildings that were put in on Hillview (now occupied by SAP) were approved by Palo Alto in exchange for Stanford giving Palo Alto the soccer fields at Page Mill and El Camino.

Palo Alto City Council "notified" Los Altos Hills Town Council and residents of the intent to build and the resulting increased traffic by placing a notice (those small font box type notices in the back of the paper) in the Palo Alto Weekly, not the Los Altos Town Crier. The plan also included putting traffic lights on Arastradero at Deer Creek and Hillview by placing the lights on Stanford property and hanging them over the road so they wouldn't have to get approval from Los Altos Hills Town Council--at least that part is on hold for now, and hopefully they will discuss this sensibly with LAH before proceeding. The incrased traffic from this expansion will likely make that issue resurface.


Like this comment
Posted by Past traffic
a resident of Barron Park
on May 27, 2011 at 1:02 pm

What was the traffic situation when Roche (or Syntex) occupied the space?


Like this comment
Posted by John
a resident of Midtown
on May 27, 2011 at 2:28 pm

"LAH is a bedroom community--there are no companies, stores, etc--only homes."

Is this a serious statment? LAH has been subdividing for years. This means more and more density, and this in turn means more traffic. All this new density means more traffic into Palo Alto and Los Altos and Mt. View, etc. LAH should just keep quiet...they are the perps of more traffic into Palo Alto, not the other way around.


Like this comment
Posted by Virginia Walbot
a resident of Crescent Park
on May 27, 2011 at 5:29 pm

When Roche was fully occupied there were about 8600 employees. Is VIMWare going to have that many more? It seems to be that if there are about an equivalent number of employees there are likely to be about the same number of car trips. Perhaps those objecting to "new" traffic, forget that the lull in traffic around Roche right now is because so many people lost their jobs.


Like this comment
Posted by megarich
a resident of another community
on May 27, 2011 at 11:41 pm

Very painful to listen to a bunch of whiny self-entitled richers complain about traffic on their precious quiet streets.

Oh heavens, how will my poor wife's Maserati make it down the street to fetch her morning latte, what with all the riffraff driving to work to make an honest living?

How dare people have jobs and come to work in our gated community. Only the privileged and super-rich should be able to drive to our city.


Like this comment
Posted by RT
a resident of Barron Park
on May 29, 2011 at 6:11 am

I use to work there during the Syntex days - I was one of the few that came in from Palo Alto. The VAST majority of commuters came in from 280 and Foothill Expressway. VMWare will have a negligible impact on traffic and schools while bringing in customers and tax revenue - perfect. Let's not screw this up! The City of Palo Alto should be rolling out the red carpet!


Like this comment
Posted by Anon
a resident of Another Palo Alto neighborhood
on May 29, 2011 at 3:17 pm

Kate, a resident of the Duveneck/St. Francis neighborhood, writes:

"And they want housing---WHERE??? They are going to commute on WHAT streets?"

"They've got kids who want to go to school WHERE?"

Don't worry. The new hires will be too young to reproduce and they'll live on campus anyway. ;-)

Just kidding!! Folks, when Syntex was there, people lived somewhere and their kids went to school somewhere. There is a lot of unemployment around here, so, this seems like a plus. Nothing is perfect.


Like this comment
Posted by Emily
a resident of Menlo Park
on May 31, 2011 at 7:22 pm

Oh, yes, let's complain about businesses expanding and creating new jobs. Reality check: you live in the middle of Silicon Valley, the tech capital of the world. Housing will just get more expensive and the streets more congested. It's never going to be the little suburban "utopia" you're still hoping it will return to.


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

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