The new tech palaces: visionary HQs or cursed trophies?


The proposed Amazon corporate headquarters in Seattle, Washington, is pictured in this artist's rendering. (NBBJ/Via Reuters)
May 27, 2013

While much of corporate America is retrenching on the real estate front, the four most influential technology companies in the nation are each planning headquarters that could win a Pritzker Architecture Prize for hubris.

Amazon.com last week revealed plans for three verdant bubbles in downtown Seattle, joining Apple’s circular “spaceship,” Facebook’s Frank Gehry-designed open-office complex and a new Googleplex on the list of planned trophy offices.

“It signals a desire, a statement, to say that we’re special, we’re different. We have changed the world, and we are going to continue to change it,” said Margaret O’Mara, associate professor of history at the University of Washington, who has written about the building of Silicon Valley. “It’s also a reflection of robust bank accounts. They have a lot of cash.”

Historically, however, when a company becomes preoccupied with the grandeur of its premises, it often signals a high point in its fortunes. These fantastical buildings may end up as little more than costly monuments to vanity and a loss of focus on the core business that made for success in the first place.

“I’ve been thinking the Apple spaceship is going to get nicknamed the ‘Death Star’ because the project is so big and the timing is so bad,” said hedge fund manager Jeff Matthews of Ram Partners. The building is coming to fruition just as Apple’s product cycles may be maturing, he explained. “It is such a classic contrary indicator that you just get the shakes.” He no longer holds Apple stock.

Walter Price, who runs technology investment funds at RCM Capital Management, shares the outlook: “When companies build big headquarters, it’s usually when they’re doing really well and have strong outlooks, and that often coincides with a peak in their stock.” Apple, Amazon, Google and Facebook are battling to recruit tech talent, and attractive campuses help with that, he added, but Apple’s plan has not gone down well with investors. RCM’s tech funds no longer hold shares.

Amazon’s design, presented to Seattle city planners last week, includes three steel-and-glass spheres almost 100 feet high that will serve as the centerpiece for three skyscrapers that will house a rapidly growing workforce in downtown.

The plans call for “a series of intersecting spheres with ample space for a wide range of planting material, as well as individuals working alone or in groups.” Amazon declined to comment further.

Google, the world’s largest Internet search company, has outgrown its headquarters in Silicon Valley’s Mountain View and is planning to build a 1.1 million-square-foot Googleplex nearby.

Bay View, as it is called, will have nine rectangular buildings, horizontally bent, with living roofs surrounded by courtyards and connected by bridges. No employee will be more than a 21 / 2-minute walk away from any colleague, a design aimed at encouraging collaboration. A Google spokeswoman declined to comment further.

Facebook is taking the collaboration idea a step further, with plans for Facebook West, an addition to its main campus in Menlo Park, Calif., that will be the size of 71 / 2 football fields.

Facebook hired Gehry to bring his trademark style of unexpected angles and understated drama to what is essentially one enormous open-plan office, where a worker can wander from one end to the other without ever going through a door. The rooftop serves as a park.

An earlier version of the building plan featured flares on the ends of the structure like butterfly wings, but Facebook decided not to go ahead with them, said Rachel Grossman, associate planner for the city of Menlo Park.

Facebook spokesman Tucker Bounds said the expansion will be “extremely cost-effective” and is needed to help the company develop new products for its users. He declined to comment further.

Apple has the most ambitious idea, a 2.8 million-square-foot glass ring on 176 acres. It would be partly a monument to former chief executive Steve Jobs, who described it as being like a spaceship and was closely involved in the plans before he died in 2011. The project, which could cost up to $5 billion, according to reports, would house about 12,000 employees. An Apple spokeswoman declined to comment.

— Reuters

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