Lobbies San Jose city officials to excuse 1 million square foot requirement
As it navigates some of the darkest waters of its 25+-year voyage, Cisco is looking to back out of a deal to develop 1 million square feet of land in Alviso, CA. The company is pressing San Jose city officials to amend an agreement between it and Cisco to build facilities on the land, just north of San Jose.
Cisco is in the throes of a painful restructuring. The company eliminated 12,000 positions recently – almost 5,000 through layoffs – after missteps into the consumer market, profit erosion in switching, distraction from pursuing scores of adjacent markets, and macroeconomic factors affecting the network industry. Rival Juniper is facing some of these same issues.
Cisco is in a period of contraction, not expansion. It doesn’t need to build another 1 million square feet of office space. Indeed, it’s conceivable that Cisco might be looking at selling some square footage.
Cisco signed an agreement back in 2000 to develop at least half of a 2.3-million-square-foot project it won entitlements for back then, according to The Silicon Valley/San Jose Business Journal. The agreement specified 2012 as the deadline for completion of the development.
Cisco requested an amendment to that requirement back in May, and it may be on the verge of being relieved of that obligation. Earlier this week, the San Jose planning commission recommended that the city council approve the amendment to relieve Cisco of the requirement, according to the SV/SJ Business Journal.
The city council will formally vote on it on Aug. 2.
For now, at least, Cisco has said it has no immediate plans to develop the rest of the site, according to the SV/SJ Business Journal: Of the 2.3 million square feet, Cisco built out about 376,000 square feet but never occupied any of the buildings — IBM and Harmonic have thousands of employees there now.
Cisco is San Jose’s largest employer, owning and occupying more than 6 million square feet of office and research and development space at its headquarters on Tasman Drive.
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