A week after announcing it will lay off 8,000 employees, Meta is shelving plans for Willow Village.
The project approved in December 2022 would have resulted in as much as 1.6 million square feet of office space, 1,730 homes, a hotel, a grocery store, pharmacy and parks.
Meta has until 2032 to start construction on Willow Village before its permits expire.
“The decision to place Willow Village on hold was difficult. While the plan reflects a genuine vision for community-based development, the current real estate market and a shift in space requirements make advancing a project of this type and scale unworkable at this time. We remain deeply committed to the community and appreciate the trust and partnership throughout this process,” said spokesman for Peninsula Innovation Partners Adam Alberti in a statement.
Meta, which is an advertising and data-collection company, is replacing employees with artificial intelligence.
At one point, Facebook was aiming to have 35,000 employees in Menlo Park by 2028, then-Vice President of Global Facilities and Real Estate John Tenanes told the Menlo Park Planning Commission in February 2018 during a meeting about an early version of the Willow Village plans.
Despite plans to cut jobs, Meta reported strong first-quarter results on April 29. The company earned $26.8 billion, or $10.44 per share from January to March, up 61% from last year. Revenue rose 33% to $56.3 billion.
there is probably no stronger real estate market in America than this Palo Alto Peninsula area. the realty market is NOT the reason for dropping this project. perhaps their layoffs are the reason, or their employees have indicated that (like so many people) they do not want to live in dense apartment-type projects (or places that look all like glorified: “company housing camps?”).
Dave, it could also be a signal that our real estate is about to take a deep dive. Remember the group that pushed this area. Demographics have changed and possibly there is a correlation. I hope not but the trigger here was jobs, schools, weather and environment. . If they change, well, that could change the prices.
Hi Hal!
Possibly so.
I would suggest that the SECTOR of the realty market that might take a dive (and is already showing some signs of a dive) is just this kind of dense apartment style project. Most people do not go to college for 4, 5, 7, 10, or 12 years with the heart-felt aspiration of squeezing into a gussified housing project apartment. As information, some of these projects have experienced significant difficulties in renting (or the rarer case, selling) their little units. Firstly, and desipte all their promotional mis-indormation, they are mostly very unaffordable. Like, charging maybe 3 to 5 times the rent that could even begin to be honestly classed as truly affordable for regular working people who might need the quarters. So, what is to be done? A few that happen to be close to a large global corporation have basically converted themselves into corporate visitor housing. The corporation rents units on long-term leases and then permits visitors to the company to reside there for the few days, weeks, or sometimes months that they are working for or with the corporation. Think sort of like the “Lockheed Missiles and Space Corporation Private Hostel for Honored, Profitable Guest Workers.” or something like that. Except, of course, it is not Lockheed. Smiles smiles.
Regular houses are still selling like hotcakes around Palo Alto and the Peninsula. Yes, partly due to overseas capital buying many of them up. But they are still selling. That (larger) market segment has NOT taken a deep dive, far from it. (Even though it is, frankly, overdue on its somewhat regular market cycle for a dip. Cycles are not the same thing as predestination. That there will be another housing market dip is almost a certitude, all markets exhibit variability. But its not like Old Faithful going off. Its not clockwork. It has not happened. At least not yet. We are still seeing multiple offers and the average local house is selling quite rapidly for 107 percent of listing (asking) price.)
Let’s check back here again in a year or two and we can take another look… smiles
META will soon relocate from California.
Radical policies, regulations and taxes are dooming the state that my family moved to in the 1870’s.
I moved the remaining members of my family to a state that has a balanced budget, low taxes, fair regulations and minimal crime.
The focus here is on family, faith and community.
Sadly, property here has increased by over 300% since 2005 because of people fleeing states like California
We’ve been hearing the doom and gloom from conservatives for decades now, how California is failing. It has always been wrong and is wrong today. As of this year we’ve moved UP to the 4th largest economy (if Cali was a country). Most of the people leaving are cutting off their nose to spite their face. Ask some of the people that have left for Florida or Texas, I hear their “lack of regulation” has done wonders for the insurance and property tax rates. And think twice about moving kids to a state with cheap prices and few opportunities.
I don’t think you know what you’re talking about. Texas doesn’t have a state property tax. The local tax varies by community, but it never gets as high as California’s property tax. Florida property tax is 0.75% of a home’s value — considerably lower than Californias. Both states have better road conditions, better schools and better business opportunities. That’s why people are leaving California for those states. It has nothing to do with conservatives putting down California. People can do the math on their own.
Let me explain it to you. Texas has no state-wide property tax, but that doesn’t mean they don’t have property taxes. Property taxes are levied at the local level. AND, because Texas has no state income tax their property taxes make up for that funding, setting their property taxes at some of the highest rates in the country. Using the latest data available Texas ranks 7th in the highest property tax rates. California is 35th at 0.71 of home value, BELOW Florida. You might want to read up on it.
Ben, you conveniently leave out the fact that Texas has no state income tax. California gouges residents three ways — a high property tax, high income tax and high sales tax. We’re No. 1.
Another MAGA argument, don’t look at the whole picture focus on the scary talking point. When you look at the pout of pocket cost for a homeowner in Texas versus California, Californians pay slightly less but get far more. But go ahead, book that moving company. You’ll be back.
Ben, why must everyone who disagrees with you have to be MAGA? I’m certainly not.
About 100,000 people a year leave California for Texas. It’s not their fault that they’re doing what’s best for their family. You can continue to live in California for as long as you want.
And the tax picture is bigger than just the income tax, which you don’t want to talk about it. (Texas 0, California 13.3%) Take gas taxes. California: 61.2 cents per gallon compared to 20 cents in Texas. Not an outlier. How about sales tax? 10.75 is the max in CA, in Texas the max is 6.25%.
It is significantly cheaper to live in Texas than in California. Texas offers a lower cost of living across most categories, with housing costs roughly 58% higher in California.
Median home prices in California are often more than double those in Texas (e.g., $861,020 in CA vs. $365,500 in TX, based on Riceland and Redfin)
Daily Expenses: Groceries, utilities, and gas are generally cheaper in Texas.
Texas: Offers better affordability, no state income tax, and cheaper housing.
Those aren’t MAGA talking points. They’re facts.
“The decision to place Willow Village on hold was difficult. While the plan reflects a genuine vision for community-based development…”
I don’t believe this for a second. Community and AI are like oil and water for Meta, and AI will prevail. The livelihood of 8k employess now being dealt… Meta/FB Will keep the ball rolling with their layoffs.
The economics are simple – Meta needed more local housing to attract and retain talent. AI is reducing the workforce and thus that need for employee housing. Shame on the feckless Menlo Park City Council for buying into a horrible deal that Meta can simply walk away from without penalty.
No need for the housing projects downtown. Just build them on the Willow Village parcel. Council will do this UNLESS their real goal was to hurt as many downtown businesses as possible.
@Ben Menlo City Council certainty is feckless but the idea that Zuck/Meta would have done this deal without a escape hatch is childlike magical thinking. Let’s see… small town city council makes deal with worlds most ruthless capitalist to meet state development mandates pushed by politicians from Menlo’s regional economic rival (San Francisco), and passed into law by state representatives who are beholden to the real-estate industrial complex. The whole mess is administered by a bureaucracy 300 miles away in Sacramento while the state is simultaneously pushing Zuck/Meta out of the California with a billionaire’s tax. What could go wrong?
Several large companies have left California for Texas, including Tesla, Chevron, X, HP Enterprise, and Oracle. That’s a lot of jobs. And there have been layoffs. That’s also a lot of jobs. So why isn’t the RHNA in each formerly “jobs rich” city being reduced to reflect that change? It also appears that there’s not much of a market for the pricey small units that are being built. So why approve/build more of what is not in demand? California legislators have proven that they can pass myriad pieces of legislation that helps developers develop more. I wonder if they will ever tackle the real issue in this state: affordability.
China’s Evergrande stands as a cautionary tale of developers who over-build what is not needed (or wanted) and the government bodies that enable that wasteful growth. Hopefully Menlo Park will be smarter vis-a-vis the former Sunset campus.
Annette makes some excellent points above.
“So why isn’t the RHNA in each formerly “jobs rich” city being reduced to reflect that change?”
Because the state has specifically banned ANY reconsideration and even discussion for 8 years after the housing targets were set regardless of the changing economy and legitimate objections like a community being unable to safely evacuate CURRENT residents in the event of fire or other disasters.
This was never about providing affordable housing where only 15% of the units were classified as “affordable” and only 5% were “very” affordable and local citues are letting developers reduce those numbers even more.
Silicon Valley has always had a cyclical economy which was ignored when cities approved projects like Menlo Park’s Willow Village and then get stuck bearing the costs when the big companies stop expanding and cancel their projects. Google cancelled a big project in San Jose, leaving it with a huge hole in the ground, a destroyed neighborhood where buildings were relocated and the financial costs (which Mountain View also had to absorb when Google stopped a project there.
Let’s hope Menlo Park stops the atrocious Sunset project and the replacement of ALL downtown parking north of Santa Cruz with housing and moves it all to Willow Village.