UP NEXT FOR BIG TECH: COMPANY TOWNS?
escalating crisis over the company’s power to sway elections, its casual approach to data privacy and its susceptibility to Russian manipulation. If Facebook’s image is permanently sullied by the furor over Cambridge Analytica, the data firm hired by President Donald Trump’s 2016 election campaign, Zucktown will falter before it is finished.
The social media colossus is not the only Big Tech company in the complicated position of dressing up its expansion as a gift to its neighbors.
A few miles down the 101 highway, another new civic-corporate partnership is underway in the city of Mountain View. Google is promising to place the public “in the very heart of Google’s vibrant community.”
The search company plans a 600,000-square-foot office building with a roof that melts up into soft peaks, kind of like a meringue. It will have stores, cafes, gardens and even a space for theatrical performances, as well as a place for consumers to test-drive new Google technology.
Google will build 5,000 homes on its property under an agreement brokered with Mountain View in December. Call it Alphabet City as a nod to Alphabet, Google’s corporate parent. The company said it was still figuring out its future as a landlord and declined further comment.
Zucktown and Alphabet City, as well as similar projects being contemplated across Silicon Valley, could at a minimum have consequences for the startup culture that transformed fruit orchards into the world’s greatest tech hub. Silicon Valley was built by engineers jumping from company to company. That drove the innovation that sped the rise of some firms and hastened the demise of others.
As workers begin to literally live at the office, they will inevitably be more beholden to bosses who also collect the rent. After all, it is much harder to find a place to live in Silicon Valley than a new job. Turnover may slump, and so might the turnover in ideas.
The push into the physical also has implications for the 1.2 million people in Silicon Valley who are teachers, fitness instructors, clerks, baristas — all those who hold jobs that do not come with stock options. As they inch down the clogged streets and bid money they don’t have on miserable houses, they will hear the siren call of Big Tech: We can fix broken communities by building new ones. Trust us.
“Corporations are paying for things that the city or county and state used to pay for,” said Cecilia Taylor of Belle Haven Action, a community advocacy group. “They have a lot of money. A lot of money. More than the city does. And a lot more power.”
On a wall in the Facebook division charged with the company’s growth there is a poster with a classic tech admonition: “Go Big or Go Home.” Facebook is in essence tweaking that to “Go Big at Home.” About 12,000 of its 25,000 employees work in Menlo Park. In a decade, it will have space for 35,000 — slightly more than the city’s current population.
The notion of communities run by and for companies has been a fixture in the United States almost from the beginning. Often these places were exercises in plunder.
In the textile town of Lowell, Mass., in 1846, the mill clock slowed down to lengthen shifts and then sped up at night when the workers were off, according to one contemporary reformer. U.S. Steel built Gary, Ind., but took little responsibility for its employees, many of whom lived in substandard housing in crime-ridden neighborhoods.
There were more benign examples too. Milton Hershey began building a chocolate factory in the middle of Pennsylvania in 1903 and then surrounded it with a community where, he pledged, there would be “no poverty, no nuisances, no evil.” In return for surrendering certain rights — like local elections and privacy — workers in the town of Hershey got medical coverage, a free junior college, parks and a zoo.
Corporate good will, however, had a way of curdling over time.
In Wisconsin, the Kohler family established a plumbing-fixtures factory in 1900 and then created a town around it. Kohler built houses for couples and dorms for single men, financed schools, had a pension plan and paid well. When economic conditions deteriorated during the Depression, however, the employees tried to strike. Kohler responded by arming its deputies with machine guns. In the ensuing clash, more than 40 strikers were shot and two were killed.
By the 1960s, the era of the company town in America was fading, even as countries like China picked up the notion. Zhengzhou is a remote Chinese city that was once impoverished. It now has 350,000 workers building iphones.
Hardy Green, author of “The Company Town: The Industrial Edens and Satanic Mills That Shaped the American Economy,” said tech companies had been reviving elements of the company town in the United States for years now.
The free meals, nap pods, concierge services, yoga classes, on-site laundry and haircuts are a perk but also a modern way of slowing down the mill clock so the workers can spend more time working. But in a society where government is increasingly ineffective, company towns are nevertheless likely to be welcomed, or at least tolerated.
“It may be the best option for many, just as a benevolent dictatorship can be OK for as long as the benevolence lasts,” Green said.
No free Wi-fi
Only seven years ago, Silicon Valley had a very different attitude about building housing for workers, much less the community. A gaunt Steve Jobs, in what would turn out to be his last public appearance, made his case before the Cupertino City Council for a new Apple headquarters.
Jobs told council members how great the new doughnut-shaped headquarters was going to be. It would have a lot of trees, a theater, curved windows. Architecture students would come from all over to study it.
City Council member Kris Wang had a question: How could the 60,000 Cupertino residents benefit from this new campus?
“We’d like to continue to stay here and pay taxes,” Jobs said. “If we can’t, we’d have to go somewhere like Mountain View.”
Wang, a former Cupertino mayor, persisted. “Do we get free Wi-fi or something like that?”
“I’m a simpleton,” Jobs replied. “I always had this view that we pay taxes and the city should do those things. That’s why we pay taxes. If we can get out of paying taxes, I’d be glad to put up a Wi-fi network.”
Since that June 2011 meeting, the number of hours commuters in Silicon Valley lose every day to congestion has doubled to 66,000. About 300,000 new jobs have been created, pushing the median apartment rental rate up 37 percent and the median cost of a home to $968,000.
Meanwhile, the big companies — not only Apple but Amazon, which has an increasingly large presence in Silicon Valley, as well as Facebook and Google — are much wealthier.
Apple built a $5 billion campus that, for all its splendor, is not readily accessible by mass transit. That problem was compounded by the company’s apparent lack of interest in where its new employees would live. Decisions like these are no longer acceptable from a public relations point of view and would not be smart for the companies in any case. If Silicon Valley continues choking on its traffic, the companies will find hiring not merely difficult but impossible. Even for a tech programmer, a $2 million house is a hurdle.
So the virtual companies are being forced to grapple with the most intractable physical issues.
“I don’t think Google, for instance, thought they were going to have to get into the transportation business,” said Allison Arieff, editorial director of San Francisco Bay Area Planning and Urban Research Association, a research organization. “But they now have a giant swath of the company devoted to getting people around. Housing seems the next step. No one bats an eye if universities build housing for students, grad students and tenured professors.”
‘Money in every problem’
When tech companies played a much smaller role in Silicon Valley 25 years ago, even the working class could afford to live here. So could Stanford University students. Traffic flowed naturally.
However enticing this past might seem, efforts to put the brakes on growth have had limited success.
Measure M, a 2014 effort to restrict development in Menlo Park’s downtown, was soundly defeated by voters. Patti Fry, a former chairwoman of the Menlo Park City Planning Commission and an architect of the measure, said she was wary of Facebook’s increasing size and power.
“They’re doing more than most companies, but most of what they do serves them,” she said. “I do not expect a company to have as a priority providing community services that a real community needs. They’re in business to be in business.”
Facebook’s move toward openness and community engagement is recent. Its current campus, which it moved into in 2011, is a ring of buildings with a “street” in the middle that has restaurants, pop-up shops, a book exchange and other amenities, but only employees can go there.
Across the street, the company opened in 2015 an office designed by Frank Gehry. It is basically one enormous room — the largest open-floor plan in the world, Facebook says. On the landscaped roof is a garden, a walking loop and many trees. The neighbors cannot see any of this.
In Zucktown, this notion of firmly separated insiders and outsiders will be deliberately blurred.
“The retail stores will not be managed by Facebook. But we have the mechanism, we are the property owner,” says Tenanes, the real estate chief, adding that he doesn’t know exactly how it will work in practice. “It is a bit new.”
Menlo Science & Technology Park, a decaying office park that will be torn down for Willow Village, is not exactly a beloved part of the city, and neither are the other sites on which Facebook has been building. They were in an industrial zone. That has helped insulate the company from criticism, which nonetheless simmers beneath the surface in Belle Haven.
The Peery Foundation, a grantmaker based nearby in Palo Alto, made a short video two years ago documenting how the area around Facebook’s headquarters was changing. It interviewed dozens of local residents, including one woman who referred to landlords who had been renting to low-income families and were now selling their properties. “Eventually,” she said, “there’s going to be nobody here but Facebook.”
Facebook, in a comment at the end of the film, acknowledges, “We still have a lot of work to do.” The company has increased its efforts in the community. So has the Chan Zuckerberg Initiative, a limited liability company set up by Zuckerberg and his wife, Priscilla Chan, for philanthropy. At the same time, Facebook has continued to expand.
Taylor grew up in Belle Haven, left, came back to run for the Menlo Park City Council in 2016, narrowly lost, and last year formed Belle Haven Action. It is an organization on a shoestring; she and two colleagues do not have offices and hold meetings at the local community center.
“Facebook is very smart,” she said. “They have money in every problem. Immigration. Housing. Transportation. Education.” For example, the Chan Zuckerberg Initiative gave $3 million to an East Palo Alto legal services group that helps low-income residents with housing and immigration issues. It has given more than $7 million to create a primary school.
And it is helping fund Belle Haven Action. In January, the organization got a $75,000 grant from the Chan Zuckerberg Initiative.
Taylor acknowledged it is awkward for an advocacy group to be funded by the company it is confronting, but said: “When you don’t have resources, that makes your work so much harder. This is about being a disrupter but also a negotiator.”
A recent accomplishment by Belle Haven Action: getting a “no right turn” sign on a busy Facebook parking lot to stop workers from heading deeper into the community in an attempt to avoid congestion. Next it would like the company to install cameras on the streets to monitor traffic and pedestrian safety.
“We need movement because nothing has been done for so long,” Taylor said. “Now Facebook comes in and they’re willing to give us a few pennies and something for the community. The trains will run. We’ll have better schools, a grocery store — although we’re going to push for a co-op.”
Modeling for other cities
Jobs promised Cupertino nothing — and that’s about all Cupertino got. Apple gave $6 million to an affordable housing fund and pays certain fees to the city, but the gleaming new campus is resolutely closed to the public.
Its critics, Apple says, don’t understand.
“We didn’t make Apple Park for other people,” Apple chief design officer Jonathan Ive said at a recent talk in Washington. “It wasn’t made for you.”
Wang, the former Cupertino council member, has no regrets about not pushing Jobs harder. “I’m proud of Apple,” she says. “They’ve done a good job. The campus is very impressive.”
Her only wish — and it’s a small one — is that someday Apple will invite her in to actually see it.
If Apple is unapproachable, Facebook and its money are becoming inescapable. In addition to the Chan Zuckerberg Initiative’s grants to local organizations, the social network is getting more involved with local policing.
In 2014, Facebook paid $200,000 to create a new Menlo Park police substation adjoining its campus. It pays the annual rent. It also financed the $173,146 annual salary and benefits of an officer. Last year, the company proposed giving the city $11 million to pay for a six-officer unit. That plan evoked some disquiet.
“Instead of being beholden to the public, public servants will be beholden to a private company,” a local activist, J.T. Faraji, said at a city council meeting.
“Our goal is to strengthen the community,” said Juan Salazar, a Facebook public policy manager. “We want a more permeable relationship, where we engage more. The parks, the grocery store, are places to congregate together, to build a sense of place.”
David Kirkpatrick, whose book “The Facebook Effect” is a history of the company’s early years, is ambivalent about the expansion. While he says “Facebook is a company that at least tries to have a conscience,” he also worries about so much enforced togetherness on employees.
“Facebook has the attitude that if you are really a good employee, you will live, eat and sleep Facebook,” he said. “That creates insularity, which is a big problem in Silicon Valley already.”
If Silicon Valley is the laboratory for the increasingly intimate relationship between big tech, its workers and its neighbors (who are also frequently its users), seeds are being planted elsewhere as well.
In Toronto, an offshoot of Google won approval last fall to redevelop a 12-acre chunk of the waterfront. Chicago was so eager to land Amazon’s new headquarters that it proposed returning to the company half of all the state income tax its employees paid — money that would enrich the company, one of the world’s most highly valued, at the expense of the community. Chicago is now a finalist. So is Newark, N.J., where the state is offering up to $7 billion in tax credits.
As Facebook works to make Willow Village a reality, its ambitions can only grow.
The 1,500 apartments “are a starting point,” Tenanes said. “I would hope we could do more. We’re solving a problem here.”