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January 07, 2015

Big Tech Changing Character of Downtown Redwood City

KQED NEWS

Rachael Myrow

Redwood City has long been home to tech companies such as Oracle and Electronic Arts, but until recently it wasn't really considered part of Silicon Valley. That's changed.

If you've been to downtown Redwood City recently, there's no escaping the construction. Construction cranes crowd the sky as office buildings and condo complexes rise up to meet tech company demand. As Big Tech grows its employment base, Redwood City is proving an attractive place to expand because it sits right at the midpoint of the Peninsula, between San Francisco and San Jose.

Without a doubt, the biggest new commercial tenant downtown is Box Inc., the cloud storage giant. The site Box is leasing for its new headquarters is 334,000 square feet. That's bigger than three average Wal-Mart stores.

Why here? Well, to start, there's a Caltrain stop just steps away. That means tech talent is an easy draw, whether they're coming from San Francisco to the north or any number of cities to the south.

Up and down the Peninsula, tech companies are looking for this combination of a large commercial footprint and easy transit. And it doesn't hurt that Redwood City has also begun offering the kinds of cultural amenities tech workers have come to expect.

Bliss Coffee opened a few months ago, serving high-end roasts such as Verve and Four Barrel within eyeshot of the Caltrain station and the new Box site. Tyler Hooper admires the view as he sips on a mocha.

Hooper's a VP for the commercial real estate company Kidder Mathews, and he specializes in representing tech companies. "The companies that are looking at Redwood City," Hooper says, "are also looking at all the other downtowns, pretty much from Sunnyvale probably to San Francisco, along Caltrain."

But not every town with a Caltrain station is sprouting construction cranes the way Redwood City is. Besides Box, Google just bought close to a million square feet by the waterfront. That's going to send local commercial real estate prices up. Even so, Hooper says land values in Redwood City are still far cheaper than in more developed mid-Peninsula markets like Palo Alto, Mountain View and Menlo Park.

"They've kind of reached capacity in those markets," Hooper says, "so they've spilled over into the adjacent markets."

Another reason to choose Redwood City: its downtown development plan. Nearly every city has one, but Redwood City did something unusual for the Bay Area. It created an umbrella environmental review, so companies like Box could sidestep the usual lengthy approval process. Mayor Jeff Gee says this plan was 20 years in the making, with lots of community meetings along the way.

"I understand that it's difficult right now because of all the construction, but that will pass," he says. "And what will evolve and emerge is a new neighborhood [that] will be an addition to our city. Not everyone will probably see the benefits right away. We can't just stand still and let time pass. We need to evolve and change."

Critics challenge the particular shape of this evolution - and its scale: originally, 2,500 new residential units, 100,000 square feet of new retail and 500,000 square feet of new office space. While that seems like a lot of room to grow, the Box deal alone ate up more than half the allowance for office space, and other companies waiting in line to get their projects approved were disappointed.

So the City Council recently raised its office space expansion limit downtown from 500,000 to 670,000 square feet. To offset that, the council also reduced the limits for residential and retail space. That kept the totals roughly the same, but it also adjusted the balance to tilt even more heavily in favor of office space.

"Did we get it right?" Gee asks. "I don't know that yet. If we didn't, we'll make adjustments." As if anticipating blow-back, Gee promises that this expansion is just about done. After Box, he says, there are three other deals in the pipeline, and that's it.

The redevelopment of downtown started with revamping entertainment venues, and those changes have inspired a lot of praise from locals: the outdoor concerts at Courthouse Square, for instance, and the renovated Fox Theatre. The new restaurants are packed on the weekends. But the scale and crush of the new office buildings and condo complexes has people grumbling about the Manhattanization of Redwood City.

The skyline is filled with taller buildings. The streets are crammed with traffic. It may not necessarily cost more to shop and dine downtown, but many of the glossy new buildings make some old-timers feel the welcome mat is not rolled out for them so much as it is for well-heeled newcomers.

At a recent meeting of the Planning Commission at City Hall, a number of people decried the lack of parks and public art - attributes that offset density.

"I don't want to say that all this is really bad, because it's not all bad," says former mayor Brent Britschgi. "I mean, we're seeing change. We're seeing the future. Most of the developments are fair. But we have to have other things that come along with them. And I think we're not seeing those things."

The city's plan does have rules meant to soften the impacts of development. So Box, for example, must have underground parking, retail on the ground floor and landscaping around the building. But Britschgi's concern about parks remains unaddressed. The city is getting money from downtown developers to buy park land, but it's using that money to expand parks elsewhere in the city, where the land isn't selling for $400 to $500 a square foot.

"You know, it feels like something swooped into our city, and we have lost all control," says Julie Pardini, who runs a Facebook group called Redwood City Residents Say: 'What?'

She's retired now, but Pardini used to work in construction and real estate. As Redwood City prices rise to San Francisco levels, Pardini worries about the lack of affordable housing.

"When we have [affordable housing], we don't need to talk about it. But you begin to talk about something when it's gone," she says.

There's something else Pardini misses about Redwood City as it was just three years ago.

"I think people are missing the feeling of space around things and between things and above things," she says. "Everything has a feeling of being cramped - moving traffic, parked cars, buildings stacked one right next to the other."

That said, downtown Redwood City used to be so sleepy, locals nicknamed the town "Deadwood City." Nobody would call it that now.

A few weeks ago, people crowded into four venues for the 2nd Annual Silicon Valley Ball-the kind of fancy event that's new for Redwood City's downtown. It was a party to dress up for, and Jennifer Williams dressed up, wearing a faux fur wrap into which she hot-glued LED lights. When she's not lighting up downtown, Williams does sales training for Genentech in South San Francisco. She's lived in Redwood City for about 30 years.

"Well, it's so funny," Williams muses. "When Redwood City started to become developed, one of my neighbors said, 'I'm so against that development, because it will be crowded.' And I thought, 'Right, because people are going to want to go there! You know?' And I remember the day when there was nothing down here. So, I'm just so excited with everything that's happening."

There's something else most development boosters here tonight will tell you. The tech boom is much bigger than Redwood City. The markets for housing and jobs are regional-even international.

Assistant City Manager Bill Eckern says Redwood City can't fully control its destiny.

"You won't know how all the pieces fit together till you get enough of the pieces in place," he says. "That's where we are now, is, we're building the first of the pieces. We'll get to the next phase and we'll say, 'OK.' Cause the economy's going to slow enough that we all get to take a breath. We'll go, 'OK, we'll built this. Now what happens? We like this. We don't like that. Now we can fix it going forward.'"

This boom will end, Eckern says, and Redwood City will have the chance to assess whether it took the best advantage of tech money while it was available.

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