Last week Cisco announced that it was laying off 6,500 employees. Now the company is asking San Jose to release it from its commitment to develop 1 million square feet in Alviso by 2012.
An amendment signed by the company in 2000 required it to develop at least half of a 2.3 million square foot lot in Alviso by 2012. It did build 376,000 square feet, but never occupied the buildings, which are now being used by Harmonic and IBM. With one year left to complete the terms of the agreement, Cisco has said that it has no plans to invest in further development of the property. With Cisco laying off thousands of people, it is unlikely that it plans to create additional office space, especially considering the amount of office space currently available in San Jose.
That leaves open what will happen to the land. Cisco may consider selling it, and some observers point out could be ideal for the construction of campuses for burgeoning businesses, particularly since it is so close to the Golden Triangle. On the other hand, other developers note that the land could be used for residential development as well.
One thing seems certain. San Jose can hardly say no to Cisco, which is one of the largest employers in the city.