Tech

Silicon Valley campuses are evolving from 'ivory towers' to attract millennial talent

Key Points
  • Silicon Valley tech companies like Facebook and Google have begun departing from the traditional style of campus designs, often closed off from the general public.
  • Experts see a trend in not only opening their doors to surrounding residents but inviting them to help design them.
  • The trend comes as companies face pressure to appease both top talent and their non-tech neighbors.
Rendering of Maude Park, Middlefield Park
Source: Google

When Google announced plans for its new Mountain View tech campus this week, it didn't look like the Silicon Valley campuses that preceded it. It's an even starker contrast from Apple's high-profile "spaceship" campus just several miles away, whose completed design garnered worldwide attention just two years prior.

Google's renderings for its new town-like tech campus in Mountain View, Calif., would convert 40 acres of Mountain View land into a new mixed-use campus and with a mix of office space, housing, retail and public event space. This came several months after the company released plans for an even larger mixed-use campus 10 miles down the road in downtown San Jose to house 25,000 employees. Some experts said the project could end up equating to a $5 billion cost like Apple's campus, however it's too early to tell an exact cost.

Facebook recently re-worked its big Menlo Park campus plans for a similar model that would include affordable housing, a full-service grocery, and pharmacy among other amenities. 

Other companies have keyed in on pockets such as Santa Clara's Santana Row, where Splunk and other companies have signed leases, and downtown San Jose, where Adobe's headquarters are located.

The departure from corporate campuses in the region reflect a change in the tastes of employees company is hoping to recruit, as well as an effort to change society's views of Silicon Valley tech giants as rich kings looking down from their ivory towers on everyone else, experts told CNBC.

Following millennials

One impetus for companies to begin including retailers, hotels and transit is to follow the talent, who are predominately from the millennial generation, experts said. Today, they often prefer to live 40 miles up the freeway in more-exciting San Francisco and potentially take hours-long company shuttle rides to work than live in a suburban town with little going on.

"That generation of worker prefers to work and live in a dynamic and urban environment," said Erik Shoennauer, a Silicon Valley commercial real estate consultant, whose clients have included Sand Hill Property and Google. "The other desire is to not have soul-crushing commutes." 

That means companies are fighting for Silicon Valley cities to recreate the city's urban atmosphere.

Shorter commutes are also better for the environment, which companies are increasingly touting as a competitive edge as they appeal to a generation more concerned with sustainability, according to Kelly Snyder, a real estate development and land use consultant who has worked in Silicon Valley for the last 25 years.

"People who were decision-makers in the '60s and '70s didn't have the information we have now and didn't know forcing people to drive 25 miles on interstate 280 or 120 miles from Manteca was going to have all these downstream, terrible effects like creating a pollutant atmosphere for asthma in east Oakland," she said.

Indeed, Google's San Jose project also includes a major multi-modal transit center, which is being dubbed as "The Grand Central Station of the West." It will also have "flexible" roadways and public bike trails that run throughout the entire development.

Millennials are also growing up and starting families, and may find additional attractions in the public recreation fields and family parks drawn in Google's San Jose and Mountain View plans.

"They're satisfying their business, recruitment and retention needs but it has the side benefit of giving back to the communities," Shoennauer said. "It creates spaces where surrounding community can latch on to the new park or the new childcare center."

VIDEO3:1403:14
What millennials should do to navigate the coronavirus downturn

Societal pressures

However, most experts who spoke with CNBC cited growing concerns over a lack of affordable housing as a driver behind the new plans.

"I think tech companies are acknowledging that they're part of creating this housing demand that's not being met," said Bob Staedler principal and founder of land use firm Silicon Valley Synergy. "You can't just ignore these cries of displacement."

Google heard those cries when it first announced plans to take over a large portion of downtown San Jose for its sprawling future campus. Within one week of the news breaking, home prices in a three-mile radius of the site jumped 7%, CNBC reported. Protesters made scenes outside of Google's events, often carrying large printed signs that read things like "Welcome to Googleville."

Two of the protesters that showed up to Alphabet's annual shareholder meeting in 2018.
Source: Jeff Barrera / Silicon Valley Rising

Since then, Google amended their plans to include open, public spaces and have attempted to hold semi-regular feedback sessions with residents. It also pledged to invest $1 billion in affordable housing around the region.

Google also got to learn from Facebook, which — in the last couple of years — faced pushback from neighbors. Early on, the company began ramping up their engagement locally, hiring local representatives and creating dedicated spaces for local students and workshops.

The conflict over space reflects a growing alienation toward tech companies across the country.

"What we've learned is, when we created these walled-off campuses — look where we are now, society-wise 40 years later —the one thing that's keeping our economy going right now, is essentially reviled by most of the country and it's very much a 'us versus them' attitude," said Kelly Snyder. "You're either on the inside because you're a gifted and lucky programmer or your outside getting crumbs."

Snyder and others said that while an open campus isn't the key to larger product issues being solved right away, it could indeed help. They also pointed to a growing activism from within the walls of the companies, where employees voice things like a greater need for diversity and inclusion at the predominately-white and male work places.

"I and many professionals, planners, architects and designers see that one of the main reasons for that is because the people creating such products are separated from reality in their daily lives," Snyder said. "Creating these porous campuses where an employee is sitting in a community coffee shop with two people who live across the street in affordable housing and not a campus where you have to flash your badge to get in, is going to help."

"There's a lot of feeling of injustices toward bigger companies and the wealth it's created in them and the lack of bringing the small community along with it," said Cale Miller, a senior Vice President at commercial real estate firm Hughes Marino. "There's an outside pressure that's happening to a lot of companies because of the pubic nature of people's capabilities of raising issue of social media and otherwise to get traction for an idea. Because of that pressure, companies want to try and figure out a way to not only embrace the community because it's the right thing to do but also because it's the way their employees want to live."

WATCH: Tech companies are consolidating offices amid the rise of remote work

VIDEO2:4602:46
Tech companies are consolidating offices amid the rise of remote work