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Lease will cost Google $3.66 million per year for the land alone

As Google expands its internet empire it also needs to occasionally expand its real world empire with more buildings and additional office space to house its ever growing number of employees.

Google’s current headquarters, dubbed the Googleplex, sits on a campus with 1 million square feet of space that was purchased in 2006 for the sum of $319 million. This week Google announced that it intends to build a new 1.2 million square foot campus on land it will be leasing from NASA.

The new campus will be leased from NASA with the initial lease term being 40-years. Rent for the 42.2 acres of land the campus will be built on is initially set at $3.66 million per year. The campus Google intends to build on the land will begin construction in 2013 and Google has declined to comment on how much it expects to spend on the construction.

The final phase of the campus is scheduled to begin construction in 2022. When complete Google says the campus will include housing for some employees. After the initial 40-year lease term the lease can be extended by as much as an additional 50 years. Google is famous for its perks offered to employees, the new campus will surely continue this tradition, despite the fact that the perks haven't helped Google retain some key employees recently.

Google hopes that the new campus’ close proximity to the Ames Research center will help it to draw top shelf scientists from the NASA research pool. Google founders Larry Page and Sergey Brin have negotiated the use of a government landing strip for their private jet according to the Associated Press.

The Moffett Federal Airfield is off-limits to most private planes; the Google founders agreed to pay NASA $1.3 million for the use of the airfield and agreed to carry NASA instruments on research missions.

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Would have been cheaper
By FITCamaro on 6/6/08, Rating: 0
RE: Would have been cheaper
By EntreHoras on 6/6/2008 1:28:52 PM , Rating: 2
I'm not sure how costly California is, but living in Florida is really expensive.


RE: Would have been cheaper
By Bioniccrackmonk on 6/6/2008 1:45:45 PM , Rating: 4
If you live in the huge metro areas or the handful of rich towns it can be, but for the most part, Florida is relatively cheap to live in compared to most of California.


RE: Would have been cheaper
By Ringold on 6/6/2008 2:43:39 PM , Rating: 2
Exactly. The only thing that stings is insurance, due to hurricanes, but Jeb and now Crist have tried socializing it, so who knows how that'll end up. Property taxes bite, but when you look at the median home value, it makes sense.

Not having a state income tax is beautiful! (And great for our economy)


RE: Would have been cheaper
By FITCamaro on 6/6/2008 3:55:36 PM , Rating: 1
I've only been out of Florida 2 years and when I was there, they had the state run insurance agency. But it was supposed to be only if you couldn't get insurance with anyone else. Of course because the insurance companies started dropping people like the plague, it became the largest insurance provider. But not out of choice.

So unless things have radically changed in the past 2 years, I would hardly call Florida's state run home owners insurance socialist.


RE: Would have been cheaper
By Ringold on 6/7/2008 5:02:54 PM , Rating: 2
You are right, nothing has changed. It's got worse since you left; now it's illegal for an insurance company to offer any insurance product (such as car insurance) if they don't also offer homeowners, so we've also been losing some car insurance companies, one or two this year so far.

And the reason there was no competition for the state insurance company was because they'd set a limit on the rate, and the insurance companies don't think they can turn a profit on the rate. 90% of the homes east of I-95 are all state insured as of a couple years ago; similar story on the other side of the state.

I call that socialist insurance because if a Category 5 rips in to Florida, who pays? Not companies, and not individuals. All Florida tax payers will pay. In fact, a whole lot of economists and budget experts have warned a Cat4 or 5 striking a densely populated area could force Florida in to bankruptcy, sending all citizens a massive bill, or draconian budget cuts (ie, no more road maintenance, closing almost all schools, etc). My money is on Florida being the first state in the modern history of the nation to file for bankruptcy protection. When local state senators become defacto insurance claims adjusters, I call it socialized. :)


RE: Would have been cheaper
By 67STANG on 6/6/2008 1:52:51 PM , Rating: 2
California is more expensive than Florida, on average.

However, California isn't the most expensive state in the U.S. to live. Hawaii is the most exensive due to being remote, (and of course because it's paradise too...).

In the lower 48, CA and NY are the most expensive... although Florida is getting up there.


RE: Would have been cheaper
By callmeroy on 6/6/2008 2:10:56 PM , Rating: 2
Well it depends, if you are talking metro areas within NY and CA - of course. Any largely urbanized area is gonna be more costly living expenses than rural areas, its just commone sense - that whole supply and demand mentality thing.

So yes CA is ridiculous in major metro areas -- LA, San Fran and of course the luxury communities. As for NY, NYC is atrociously expensive indeed no arguments there at all.

But as an average of the whole state as a whole - I'd tend to put NJ (my state) very high on the most expensive list. Our property taxes are the highest in the nation compartively, we also have horribly high auto insurance rates AND the fun doesn't end there our troubled state has some "great" (sarcasm) new taxes planned to make it even tougher to rub two pennies together after the bills are paid.


RE: Would have been cheaper
By 67STANG on 6/6/2008 3:15:01 PM , Rating: 2
I tend to agree with you on most points. NJ does have some of the highest property taxes in the nation. However, EVERYTHING is ridiculous in CA.

Gas
Lowest price where I live is $4.45/gal. (87 octane)

Electricity
Everyone knows about CA's "rolling blackout" fiasco a few years back. CA residents already pay some of the highest energy gosts in the lower 48, and our power isn't even guaranteed...

Housing Costs
CA is stile the most expensive mainland state to live in, even after all the housing crisis mess. While many states have "expensive regions", CA has quite a few of these... San Diego, Orange County, SF, The entire central coast, etc. From the Census info I looked at, NJ seems to hold about 15% behind CA in this area.

Lets be honest though, everywhere is more expensive to live now than it used to be 6 months ago. Food costs, gas costs, crappy economy, etc. have made these bad times for a lot of folks. I'd like to move to Montana where the only thing that's high are the property taxes-- last time I was there, everything else was tax free and cheap too, not to mention beautiful.


RE: Would have been cheaper
By FITCamaro on 6/6/2008 3:53:13 PM , Rating: 2
Florida is far cheaper. In California income taxes are 1-9.3%. And thats 9.3% at only $40,346/year. Thats nothing. I made more than that at my first job out of college. So with federal taxes, you've already lost nearly 30% of your income. So you're already taking home under $30,000 a year before any 401K and benefits.

Then you figure to buy a home you're paying exorbitant prices. Sure a few areas of Florida are expensive. But the majority of places are pretty affordable. Yes homeowners insurance sucks. But I'm sure California isn't cheap either because of earthquakes. Then theres the fact that gas is a lot more expensive in California than Florida and power is more and its unreliable(granted Florida Flicker & Flash isn't great. But OUC and others are).

I grew up in Florida, I know what it costs.


RE: Would have been cheaper
By ted61 on 6/6/2008 4:53:40 PM , Rating: 2
I don't think many people will be willing to leave California to live in Florida. I went to Kennedy Space Center and one of the employees told me about the great shopping at Walmart 18 miles away. I guess you could go see a nice show at the theater 60 miles away.

I can see it now. "Maw, lets buy some checkered shirts and move to aligator country." That might not fly in the board meeting.


RE: Would have been cheaper
By Ringold on 6/7/2008 5:16:12 PM , Rating: 2
You have to understand that is a fairly isolated part of Florida; Cocoa Beach isn't far, but even it is a single sliver of land between the river and the ocean. There is no room for all the luxuries when you live on what is essentially a sand bar that is, what, a mile thick?

I've lived in Central Florida most my life, and there is nothing I have to drive more than 5 miles for. WalMart, Target, a full size shopping mall, multiple theaters, libraries, etc. The only thing I'd need to drive a ways for is a proper performing arts center. I have been known to drive 40 miles for an excellent steak down in Orlando, or about the same for some of the best BBQ in Florida at a highly classified location in Daytona, or some of the best fish in the state in Titusville, but I'm a gas-guzzling fool where food > all.

Miami, Tampa, Daytona, St Pete, they're all modern urban areas.

In fact, AAA and Ruth Chris corporate headquarters are both within bike riding distance of my home near Lake Mary. There are scores down in Orlando itself, and it seems like a couple more corporate HQ's are in the local news paper as moving to town every year.

Nice shot at stereotyping an entire state, one of the most populous and rapidly growing ones no less!

That said, you can't live in Florida and not go to Gator Land at least once.


RE: Would have been cheaper
By 67STANG on 6/6/2008 6:25:33 PM , Rating: 2
The sad part of California is that the most expensive places here, are generally the most risky. Wild fires affect the majority of So. Cal. And earthquakes affect both So. Cal. and Nor. Cal.


RE: Would have been cheaper
By Gooooog on 6/6/2008 7:46:05 PM , Rating: 1
I always find these conversations strange. I'm from CA. I work in tech and I wouldn't live anywhere else. The brightest minds in the industry are here. They don't live in Florida which is why Google is here. We innovate here, we fund startups like no other state, and if you want to be in tech you had better be here. You would have a very hard time finding the tech tallent in florida because the tallented minds move here when they get a chance. As for the earthquakes and fires. One earthquake in 10 years is way better than a hurricane every year. And the fires may be bad in So.Cal but in the valley they don't really happen that much. It isn't something we honestly think about. And last, we don't have that damn humid weather! Yay CA! Go Tech! More millionairs per capita than Florida! yep the housing prices are higher but it is worth it.


RE: Would have been cheaper
By Ringold on 6/7/2008 5:26:45 PM , Rating: 2
Sorry to bust the CA bubble, but there are growing tech regions around the entire nation, including quite a lot of the eastern seaboard.

As for Florida, Orlando has gained an entire new 'east side' in just the last several years, and it's growth seems limited literally by the rate at which offices and homes can be built. What are all those jobs? "Tech" firms, engineering firms, and biotech firms. Their appetite for home-grown talent from UCF, FSU, UF, and USF have been voracious.

Hurricanes don't strike every year; it has been several years since we've seen much of anything. Even when they do come through, they don't often do devastating damage, just foul up peoples roof shingles, since every home built post-Andrew are built to take a beating.

But you enjoy those insane taxes. The sooner California realizes it isn't quite so special though, the sooner it'll be able to stop the erosion of its competitive advantages. High taxes and resting on past laurels has worked fantastic for that other predominately Democrat state, Michigan!


RE: Would have been cheaper
By Yames on 6/9/2008 12:50:03 PM , Rating: 2
This is why I love Texas and our consumption/sales tax instead of income tax. Even the drug dealers, prostitutes, and illegals pitch in. It would be nice if we could move the federal system over to this, I think its called Fair Tax.


RE: Would have been cheaper
By Chimpie on 6/6/2008 5:42:44 PM , Rating: 3
I really don't think Google is building it at the Ames Research Center soley because of NASA. It's just the perk of it. The ARC is just very close to Googleplex and they need the land.

That's how I took it from the story anyway. :shrugs:


By BigToque on 6/6/2008 3:58:14 PM , Rating: 2
Not that I don't think it couldn't happen, but how many companies actually stick around for such a long time?

What happens in the event that Google goes under?




By Ramshambo on 6/9/2008 8:31:59 AM , Rating: 2
Fire and brimstone coming down from the skies! Rivers and seas boiling! Me having to rely on Microsoft spell checker!

I'm sure if they go bankrupt they could get right out of that lease.


Oh...
By consumerwhore on 6/6/08, Rating: 0
RE: Oh...
By Ananke on 6/6/2008 2:09:13 PM , Rating: 1
3.66 M is a pretty good deal, considering this is expense, deductable against taxes. And the land is actually next to their current campus, so they will not have infrastructure expense to expand. I think it is really hard to backbone California and Florida buildings, but merely negligible to pass 500 feet optical network across the street, like in this case. Not to mention they will exchange with that rent payment an access to NASA computers and knowhow in neurone networks and AI :). And, nowhere mentioned, but is it annuity payment for 40 years of 3.66M, or will be indexed with inflation? Good, good business deal, I admit


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