Google and San Jose have revealed a $200 million development plan. San Jose Mayor Sam Liccardo (D) joins Yahoo Finance Live to discuss.
AKIKO FUJITA: Well, Google is looking to dramatically expand its presence in the city of San Jose, unveiling a new $200 million mega campus that includes 4,000 housing units across 80 acres. It's part of Google's larger plan they've announced earlier this year of $7 billion investment to expand office space and data centers across the country.
Let's bring in the mayor of San Jose, Sam Liccardo joining us today. Mayor, it's good to talk to you. Certainly a big announcement for your city. Talk to me about the economic benefits that you see, especially at a time when the city, like so many cities, have really been trying to bounce back economically from this pandemic.
SAM LICCARDO: Well, thanks, Akiko. It is a really critical time for cities across the country. And it's not just a matter of bouncing back, but bouncing back more equitably. We saw how the recovery went from the last recession. And we know that here in California, many families struggled mightily with rising rents and rising housing costs at a time that they weren't sharing in the great boon. And so, what's really essential about this project is Google gets it about the importance of supporting equity in the community. And they're making major investments in education, affordable housing, and a host of other ways to really try to boost the opportunities for all of our residents.
AKIKO FUJITA: On that front, you've got 4,000 housing units that are included as part of the project, 25% of that affordable housing. To your point, a lot of these tech companies have been under pressure for contributing to the rising cost of housing in the Bay Area. To what extent do you see this as a template for other cities, even just in the state of California, to follow as these companies expand their footprint?
SAM LICCARDO: Well, this is obviously a great example of what a major company like Google can do. What you see on the screen is a roughly $200 million community fund that they're creating for community benefits. In addition to what you see on the screen, they've committed, as you mentioned, 4,000 housing units, 1,000 of which will be rent restricted and affordable. They're also making really significant investments in parks and trails and a host of other amenities that are going to be important for a community.
So this is really very epic certainly for the city of San Jose, the largest private sector investment we've ever seen, some 7 million square feet. We understand this isn't going to be replicable in every city, just because we're very fortunate to have this unique situation with Google. But I think this pattern in which tech is increasingly understanding and getting the fact-- and I shouldn't say it's all tech, but certainly Google gets it-- about the fact that tech can be a divisive force economically. And it's going to take some real intentionality and investment to make it a force for bringing people together for closing that gap. And here in San Jose, certainly in the heart of Silicon Valley, we feel that gap as acutely as anyone.
ZACK GUZMAN: And mayor, I mean, you pointed out that it was the highest percentage-- Akiko was talking about there a quarter going to be rent restricted in affordable housing there-- the highest percentage private developers agreed to. And whether or not, you know, the guilt there or the blame assigned to Google for pushing up rents, pushing people out is deserved or not, I mean, I suppose there are people there who don't care about whether it's deserved or not because that's the fact that they're living with. So talk to me about maybe what Google gets on their side of the deal here in committing to that and helping to, I guess, solve some of those rent issues in the city.
SAM LICCARDO: Yeah, the community benefits were tied to expansion in buildable space that essentially the city council would be granting to Google. That is higher heights, build out into public-owned land, and to be able to retrofit streets and so forth, to be able to make this urban village really work. It's not going to look like a typical tech campus.
It's going to be very open, certainly integrated with restaurants and housing and a lot of public spaces in Paseos and parks. But because this is an integrated effort that's going to require a lot of public cooperation and, in fact, entitlements to build in space that previously wasn't entitled, there was some justification that the dollars would be aligned with that square footage.
AKIKO FUJITA: Mayor, we've had a chance to talk to you throughout the course of this pandemic from the time when California very quickly enacted this lockdown. Since then, you've kind of gone through the waves of the virus. And it feels like there is some momentum picking up in the vaccine rollout, as well as businesses opening up. Where do things stand in the city right now in terms of the economic recovery? How bad is the damage when you compare it to where the expectations were?
SAM LICCARDO: Well, like so many communities, we are a tale of two cities for the many residents here who work in tech. And indeed, for a tech community, things have gone very well. And you might not even know there was a pandemic if you looked at their bottom line. The reality is, we've got thousands of families, particularly in east San Jose and other parts of our city, that we know are excluded from that particular economy. Maybe they don't have the tech skills. They're not in the jobs. Of course, many of them are essential workers, who were required to show up every day, working in the restaurant kitchens or at the supermarket.
And those are the families that are most seriously impacted. Our unemployment rate probably exceeds 15% or 20% in many of those communities not far from where I live, for example, in Central and East San Jose. And yet for many, many residents, I mean, our unemployment rate in the county is less than 6%. So, one would think that number would suggest things are going relatively well. We know that there's a significant division in big cities throughout the country. And we're feeling that as well.
And so, really, our focus is going to be how do we help lift opportunities for a lot of folks who may work in industries that are not going to come back right away? I mean, hotels, aviation, it may take many years to see some of those businesses be able to rebound and have those jobs again. And so, we're really focusing on how we can get people moved into those industries that are still growing.
AKIKO FUJITA: And when we talk about the tech community specifically, early on, there was this expectation that people just wouldn't return to the offices. And yet, over the last month, we've heard sort of this trickle of companies saying, we're actually going to start moving bodies into the office. What are you hearing about what that hybrid environment is actually going to look like? Do you expect more people to return to the office than initially anticipated?
SAM LICCARDO: I do. And certainly, remote work will be with us well beyond this pandemic. And I think we've all learned how it can work. But for a lot of innovative companies that really depend on the creativity of their employees, I think what I'm hearing overwhelmingly from CEOs is they value having smart people working in the same space, particularly across the disciplines. Having the marketing folks and the design folks and the manufacturing folks be able to have those creative collisions when they're in the elevators or in the break room, be able to have those sporadic conversations that are often really essential to being able to create and iterate and solve challenges.
And so, I'm hearing more and more that folks want to get folks back into the office setting. Obviously, major investments like you see with Google wanting to build out 7 million square feet in our downtown says something about the fact that tech is very interested in continuing a model in which we have people working together. Because they understand that's the value in a creative industry.
AKIKO FUJITA: Yeah, we'll continue to watch that space. Always good to get a pulse check from the ground there. The mayor of San Jose, Sam Liccardo, good to talk to you today.