Futuristic Apple campus proposal (jnoori)
PALO ALTO — Silicon Valley tech companies—always more focused on the virtual realm than the physical one—used to settle for remodeling hand-me-down offices or constructing relatively modest headquarters.
Now, Facebook, Apple and Google have enlisted some of the world’s most renowned architects to design campuses that match their status as corporate giants and cultural innovators.
With the help of Frank Gehry, Facebook plans to build the largest open-plan office in the world, a giant room accommodating almost 3,000 employees. Apple is embarking on the construction of new headquarters in the shape of a colossal spaceship designed by Norman Foster as the centerpiece of a 175-acre area. And Google is reportedly planning a 1.1 million square foot campus near Mountain View, in consultation with NBBJ, the Seattle architectural firm which designed new homes for Samsung and Amazon. These are structures intended to command attention. But behind the scenes are teams of real estate and land use lawyers working to shepherd the companies’ proposals from blueprints to brass tacks.
New construction of this magnitude is fraught with complications, involving community politics, environmental and infrastructure concerns, and economic considerations that can take years to resolve. If architects are engineers of the imagination, attorneys must deal in the real world of traffic, political bargains and contract negotiations.
“A lot of land use lawyers are much more than lawyers,” said McKenna Long & Aldridge partner Timothy Tosta, who is advising Facebook on its new headquarters. “Basically, you have to be sophisticated in dealings with human relationships when you’re proposing a change that may be perceived as threatening. You have to be politically astute.”
Tosta and partner Jennifer Renk helped Facebook obtain the land use entitlements and CEQA clearance for its expansion plan in Menlo Park. Apple engaged a team of lawyers from Morrison & Foerster led by partner David Gold to serve as land use, CEQA and natural resource permitting counsel for its new campus in Cupertino. Google is said to have tapped Sonia Ransom, a land use partner in Allen Matkins Leck Gamble Mallory & Natsis’ San Francisco office. Ransom said she could not comment on her relationship with Google.
Facebook completed the entitlement process for its West Campus in March 2013, after about 10 months of negotiations with the city of Menlo Park, and has started construction.
And although Menlo Park city attorney William McClure said his team and Facebook worked through the legal issues in a “congenial, nonconfrontation manner,” it wasn’t easy.
“With any large land use entitlement project, there are going to be competing interests, values, goals, motivations, etc., and those things have to be balanced out in the process,” he said. Both Tosta and McClure said that some of the thorniest issues were rooted in the concentration of employees at the east edge of Menlo Park. “The movement of people is first and foremost of the tech issues to solve,” said Tosta, adding that the density per square foot at technology companies, which often have open floor plans, is greater than in standard office buildings.
Tosta said his strategy focused from the start on how Facebook’s expanded presence in Menlo Park would contribute to the city. Among the terms hashed out between Facebook and city officials as it negotiated first over moving to Menlo Park, and then building a new campus: millions in payments to Menlo Park to compensate for a loss of sales tax generated by the previous property owner, Sun Microsystems; public benefits including job training and internship programs; environmental investment; and incentives for Facebook employees to shop in the city.
Cupertino city attorney Carol Korade said her team also raised concerns about congestion and other impacts when negotiating with Apple.
In the final hours of the city council meeting last November, city officials and Apple clashed over traffic projections. After a short break, Apple offered to invest $1 million in a traffic study and potentially fund future improvements. The project was unanimously approved shortly thereafter, according to Korade. Construction is now underway.
Initially, relations between Cupertino and Apple were tense, but by the end of lengthy negotiations, lawyers on both sides were feeling warm and fuzzy.
“[The approval] would have never happened without extraordinary legal work and also the building of trust over several years,” Korade said. “We started as two independent entities and ended up as one collective.”
Doug Van Gessel, a real estate partner at Sheppard, Mullin, Richter & Hampton who has represented Google, Hewlett-Packard and Microsoft in the leasing of office space, said city officials in Silicon Valley have become more sophisticated.
“I think the city government used to be ecstatic to have a Google or a Facebook come to town, and now they’re looking at the cases more carefully,” he said.
Meanwhile, Google lawyers may find themselves in negotiations with the federal government, rather than a municipality. The company intends to build its new complex on Moffett Field, a federal airfield between Sunnyvale and Mountain View that is owned by NASA.
Several lawyers said Allen Matkins is advising Google. Ransom, a land use partner in San Francisco, has previously represented Symantec and Cingular on headquarters development projects in Southern California.
WINNING THE BUSINESS
As in other areas of the law, personal relationships are coin of the realm when it comes to landing business. Several land use lawyers said they had not heard of Apple, Facebook or Google holding beauty contests or putting out requests for proposals. “People tend to stay with the law firms that they know or they find a firm or an individual that has worked on a similar project in the recent past,” said Jennifer Hernandez, co-chair of Holland & Knight’s national environmental team and leader of the firm’s West Coast land use and environment practice group.
Apple associate GC James Fowler, who has been leading the project in-house, leans on Morrison & Foerster’s Gold, a land use and development partner, and Miles Imwalle, a newly elected partner specializing in environment and energy. Also on the team are partners William Sloan and Chris Carr, who focus on environmental and renewable-energy issues, and Palo Alto-based real estate transactions partner Philip Levine.
Gold has served as special land use counsel to the Kaiser Foundation Health Plan since 1991 and has represented some of the largest owners of office buildings and business parks in the United States, including The Blackstone Group, Equity Office Properties and CarrAmerica Realty Corp. That background likely helped him win Apple’s business, a colleague said. And MoFo has represented Apple in other matters, including, most famously, its patent litigation showdown with Samsung. Gold identified the Morrison lawyers involved with Apple’s project, but declined to comment further.
For Tosta, who specializes in complex development projects, familiarity with the local community—and a bit of luck—may have positioned him to land work on Facebook’s new headquarters.
Tosta had just finished the Menlo Gateway Project, an office building and hotel for the Bohannon Development Co., where he had worked closely with city officials and become well-versed in the city’s zoning and land ordinances, said McClure, Menlo Park’s city attorney.
And, as it happens, McClure’s firm—Jorgenson, Siegel, McClure & Flegel—was where Facebook first turned for counsel for the project. McClure said one of his partners had done real estate work for the company early on, before it moved from Palo Alto into Sun Microsystem’s Menlo Park campus in 2011. McClure’s role as city attorney created a conflict for the firm, so it came up with a list of possible lawyers, and included Tosta on the list. The expansion negotiations have been led in-house by Facebook real estate attorney Justin Gurvitz.
Tosta, who helped Twitter win permission to transform the San Francisco Merchandise Mart into a state-of-the art headquarters, said one project tends to lead to another in the boom-or-bust practice area.
“When you’re talking about how you’re going to play in a community,” Tosta said, “that’s not an issue that’s going to open and shut with one building. These companies are growing.”
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