WP4 RD: Why is Company Expansion becoming a form of City Colonialism?
When designing his future headquarters for the entire Apple company, the co-founder of Apple, Steve Jobs, commented on the beauty and successfulness of his blueprint: “Every pane of glass in the main building will be curved. We have a shot at building the best office building in the world” (Jobs, 2007). As a highschool student myself, I walk down the Main Street of Cupertino every day after school to go home, and whenever I pass through the enormous structure of Apple Park, I always dream of visiting the park and possibly working in the structure one day. Having a gigantic structure designed in a futuristic style inspires many young people and attracts potential workers for the company, fulfilling both personal and professional goals for the co-founder himself; as a result, the Cupertino city has profited from land tax by more than 160 million dollars in total (source). Here, not only do these big companies successfully execute their plans of expanding, but also provide large amounts of economic benefits to the city.
However, disagreeing voices on high-tech companies attempting to expand further in smaller cities are nothing new to me. The cooperations between big companies and small cities are not always a dream come true. Roughly two years ago, one city government rejected an expansion proposal offered by Google; indeed, this city is my hometown, Mountain View. At that time, unlike the construction of a newly designed Apple Park structure for Apple, Google had already established its headquarters in Mountain View a decade ago. Then, Google proposed another futuristic new headquarters campus construction plan that requires the city of Mountain View to sacrifice approximately two million square feets of land, but the company promised to provide excessive community and economical benefits in return. The result was a surprising rejection from the city government of Mountain View for a vote of four to three on the court. Given the large amount of benefits provided by these high-tech companies, the requests from these companies are undeniably important to the frontier of technological innovation, but it is never the city’s obligation to sacrifice in order to fulfill the companies’ wishes; thus, this recent rejection of the city government poses an unprecedented yet a critical question to the industries of high-tech companies around the world: “How should we find the balance that allows both big companies and the small cities to mutually benefit without hurting anyone?” While large scale companies always carry out invaluable economic opportunities to cities, I support the idea that the coordination between big companies and city governments should be reworked and readjusted because community benefits offered by the companies often fail to prioritize the civic interests and projects based on the necessity of the city government and local residents.
To understand the importance of Mountain View from an economical perspective, we shall analyze the advantages of living in the city and the aspects that other cities cannot replace. Mountain View is not just one city, but a group of cities, surrounded by cities such as Palo Alto, Sunnyvale, and Stanford University, one of the most prestigious universities around the world, and they are merely 10-minute drive away from each other. Today, Mountain View is home to the headquarters of many of the world’s largest technology companies, with nearly 500 technology companies gathered here such as Microsoft, LinkedIn, Amazon, Samsung, and other world-renowned high-tech companies, as well as many very powerful start-up companies, together constituting the “Kingdom of Science and Technology” in Mountain View. Here, Google’s expansion of headquarters clearly shows Google’s interest in joining the “Tech Kingdom” and utilizes Mountain View’s exclusive networking resources across hundreds of high-tech companies. Then, why does the city government resign such a beneficial offer for both Google and Mountain View?
It all comes down to financial conflicts between Mountain View and Google. For U.S. cities, business and personal sales taxes are the primary source of tax revenue (source, 2012). Although Google is the largest company in Mountain View, it is not the largest taxpayer (source, 2015). This is mainly because the sales revenue of Google’s enterprise services is not covered by the current sales tax and cannot bring the largest income to Mountain View. As such, unlike the successful construction of Apple Park in the city of Cupertino, the expansion of Google does not show a promised return of profit because Google is a company that focuses on public service, not sellable products. While Apple remits large amounts of tax on every single product the company sells, Google does not collect any forms of taxes on the advertisements that we click on and the personal information that we share across the internet; thus, the city government is not convinced by the expected profits claimed by Google. In addition, nearly all of Google’s headquarters provide employees with self-sufficient restaurants, shuttles, laundry, car repairs, entertainment, haircuts and other comprehensive services (source, 2015). By planning a mall-like working environment for Google’s new expansion, the designers ultimately fulfill the necessities of Google’s employees, making surrounding businesses unable to get much income from Google employees who receive increased salaries.
Worse yet, housing tension also represents one of the major problems within the recent decade as Google moves into Mountain View City. Silicon Valley technology companies have created a large number of multi-millionaires, and the annual income of engineers is in the tens or even hundreds of thousands of dollars, far exceeding that of non-tech industry residents. The surge in income has driven up housing prices in Silicon Valley. In the past few years, housing prices and rents in the Silicon Valley area have risen by at least 40%, and Mountain View has been the hardest hit area (Bin, 2015); the increase of living-cost caused by higher salaries offered by Google ultimately inflates the market, negatively affecting local residents’ living standards as prices become unaffordable to households in Silicon Valley cities. As a result, this forces many local residents and families to move to other cities where cost of living is cheaper, contributing to a net loss of local residency. Mountain View wants their city to be more than just Google but a diversified local economy.
So, what has the government done so far to subdue these issues? In response to the increasing living cost and a congested highway, the city government requires Google to offer more community benefit packages. In the list of community benefits that Google has offered before, Google aims to cover its tremendous footprint with its wealth. The company has quietly lobbied for an extra carpooling lane on Highway 101 to accommodate its daily stream of employee shuttles, in addition to bike lanes and bankrolled a free local public bus (Source, 2015). With the hope of alleviating some of its impact on the local community, nevertheless, the traffic merely shows any improvements at all even after Google’s funding (Source, 2015). Here, the fundings of Google’s numerous civic projects and excessive community benefits are controlled by the company itself, where city governments had no freedom to interfere with the distribution of resources. In Google’s opinion, they have provided Mountain View with a lot in return: in addition to the substantial annual property taxes, Google has also provided Mountain View with free Wi-Fi and donated millions of dollars to local schools and equipment, which represents an essential donation of community benefits (Source, 2015). But, for Mountain View residents, they are more worried that their city will become a vassal of Google and gradually evolve into a “Google City’’ when these benefits are not necessarily favoring their needs; at the same time, when evaluating the effectiveness of the city government, local residents often fail to draw a transparent and consistent distinction between a business and a government.
When navigating potential solutions that may resolve the conflicts between small cities and big scale companies, it is always useful to examine similar scenarios for foreign companies in other nations. Globally, the Dubai government established the Dubai Department of Tourism and Commerce Marketing in 1997, and these two individual organizations represent a third-party facilitator that carefully navigates the conflicts between short-term business interests and long-term city development (GCBA, 2016). Although this proposal originates from a country’s perspective, the method of utilizing a “third-party” may integrate well into smaller cities such as Mountain View as well. Additionally, Gizachew Andargeh, the manager for the Office of the Deputy Mayor, states that “cities and businesses can work collaboratively to solve complex civic issues — such as engaging lower and middle-lower and middle-income students with public–private sector workforce development” (GCBA, 2016). By providing educational scholarships to individuals of low income families, both big companies and small cities fulfill the needs of local residents, which inspires more partnership. These measures have created prime conditions for business and fostered a thriving business community.
The relationship between a huge global corporation and a tiny city is a strange one, uneven, but in many ways mutually beneficial. Tech companies are not colonizing cities against their will. Cities need tech funding; tech industries need city support. Especially as more companies buy more real estate in Silicon Valley, more growth is planned. The result is a redefinition of the partnership between local government and the private sector, where selective community benefits may become an important drive of city policy. Without setting additional bars for tax burden, companies can afford to drive future constructions and cities’ policies in their favor, superseding the role of local government and advancing the company’s own ideology; in other words, by accepting the community benefits offered by large scale companies in exchange of their further expansions, these small city governments rely more and more on the companies both economically and environmentally and ultimately lose its role.
