Development:
Redwood City embraces tech to revitalize its downtown.
Four years ago, cloud computing firm Box outgrew its space in Los Altos and went hunting for a larger office. First, it had to grapple with its CEO’s desire to remain near Palo Alto, where many draw Silicon Valley’s northern border.
After losing out on a potential Los Altos property to deep-pocketed Google, Box searched farther north, settling on a former parking lot near the train tracks in downtown Redwood City.
CEO Aaron Levie said he wanted to be near Palo Alto because it was part of Box’s roots. The company, founded in 2005, occupied two cottages in Berkeley before moving to Palo Alto, where it had its first real office. It was close to other startups and investors, and also a short commute for Levie, who lived in the Peninsula city. It spent years there before decamping to Los Altos.
Levie says he never worried about whether Redwood City was technically in Silicon Valley, though he saw the company as having roots in Palo Alto. If he misses the old neighborhood, he shouldn’t worry. It’s coming his way, as Silicon Valley, overcrowded farther down the Peninsula, hunts for space.
Stanford University, whose location is often cited as a reason why Silicon Valley sprang up where it did, is building office space for 2,700 employees that is expected to open next year in Redwood City. Evernote made the move from Mountain View not long before Box did.
Box executives argued that Redwood City was a location where the company could finally fit its workers in one central place. About 40 percent of employees came from San Francisco, and they could cut their commute.
Box’s arrival helped revitalize downtown Redwood City, which was once known among some locals as “Deadwood City.” The company employs 900 people at its brick office building near the Caltrain stop. It’s a short walk to amenities, including a movie theater, restaurants and bars, as well as offices for startups. Construction is continuing ahead of the arrival of even more groups, including 450 employees with the Chan Zuckerberg Initiative, a company created by Facebook CEO Mark Zuckerberg and his wife, Priscilla Chan.
“Every day I look out, there are new cranes popping up everywhere,” said Box General Counsel Peter McGoff. “The (city’s) reputation has changed from this sleepy little town north of Palo Alto to a potential tech hub.”
Downtown Redwood City used to be a bustling retail center, with large stores like Montgomery Ward, the Fox Theatre and a sign hoisted up in the 1920s that boasted that the city was “Climate Best by Government Test.” But over the years, as more residents got in their cars and traveled to nearby shopping malls, the downtown fell into disrepair with empty storefronts.
In 2011, city officials began a dramatic plan to redesign the downtown. Over 20 years in its 183-acre downtown, city leaders hoped to build 500,000 square feet of office space, 2,500 housing units, 100,000 square feet of retail and 200 hotel rooms. It has made a dent into those goals, already reaching the cap on office space downtown.
Today, people can shop for furniture at Cost Plus World Market, dine at the Old Spaghetti Factory and catch a movie at the downtown Century theater. Rosanne Foust, CEO of the San Mateo County Economic Development Association and a former Redwood City councilwoman, still remembers the day her daughter came home from school and excitedly said, “Oh my gosh, Mommy, Redwood City has a Philz,” the popular Bay Area coffee chain.
“Yeah, we arrived,” Foust recalled saying.
Redwood City, a 36minute express Caltrain ride from San Francisco, has “become this sweet spot from a recruiting perspective and a retention perspective,” said Bo McNally, a partner with T3 Advisors, a commercial real estate firm that serves startups.
When the company arrived in 2015, city policies for a building its size were “antiquated” and had to be updated, according to Sandra Ladao, Box’s senior director of workplace services. For example, Ladao says, “it took longer to get a Box logo on the building” — about a year — “than it (did) to build the entire building.”
Developers also began to create offices designed for startups, and the demand was so great that the city tightened its rules last year on ground-floor office space to preserve room for retail on Main Street.
Redwood City is home to other large tech firms, including Electronic Arts and Oracle in the Redwood Shores neighborhood. But the growth downtown is relatively new. As a result, rents now rival some spaces in San Francisco, McNally said. The vacancy rate for offices downtown is just 2 percent, said Aaron Aknin, Redwood City’s assistant city manager.
“Similar to downtown Palo Alto, we have the critical mass of businesses now that other businesses want to come,” Aknin said.
Peter Cuschieri says the influx of companies has helped his restaurant, Angelica’s.
“It’s been good for business,” said Cuschieri, who co-owns the restaurant with his wife. “If it wasn’t for the startups, we would be struggling.”
In February, roughly 7,000 people from around the world came to Redwood City for its annual Startup Grind conference, which has been held in the city for four years. Entrepreneurs gathered inside a historic theater to pitch their startups to audience members. For some attendees, Redwood City is their glimpse into Silicon Valley life. It was the first time Zaur Agamov, a Dubai resident, had ever visited the Bay Area.
“Oracle’s offices are here, so Redwood (City) is pretty much Silicon Valley,” reasoned Agamov, head of engineering for Cheeze, a photosharing app. For him, Silicon Valley was more about the people he met. He was struck by their upbeat spirit.
“It’s just like the movies,” Agamov said.
“There are new cranes popping up everywhere. The (city’s) reputation has changed from this sleepy little town ... to a potential tech hub.” Peter McGoff, Box general counsel