Photograph by Jacqueline Ramseyer

The new Yahoo! Headquarters is being built at First and Mathilda avenues on former Lockheed land.




Hidden Revenue

Over the last two years Lockheed has quietly sold about 25 percent of its land

By Daniel Hindin

During downtown redevelopment almost every step is visible to the public. However, construction in northern Sunnyvale on much larger parcels of land remains unnoticed by many residents.

Lockheed Martin, which occupied 550 acres of land just east of Moffett Field on either side of Mathilda Avenue, began selling off large parcels of its land for use by major technology companies in 1998. Since then, close to 25 percent of Lockheed's land changed hands. Juniper Networks, Yahoo! and Ariba all obtained significant portions in order to expand their respective companies.

"This will be very positive for the community," says Sunnyvale Planning Officer Trudi Ryan. "This is a great opportunity for reinvestment and redevelopment. If the sites are redeveloped with something that brings more people into the city, more services must be provided. This provides a positive fiscal aspect for the city."

"Property values are reassessed when they change hands," she added, acknowledging the city stands to collect more property tax as a result of the land sales.

Lockheed Martin officials report they have sold all of the land they planned to, and the company remains as strong as ever. Lockheed Martin Communications Manager Jeff Adams says, "These sales allow us to be more competitive. It reduces our maintenance and capital costs. Now we can work on modernizing our existing facilities.

"This country's industrial base has gotten a lot smaller recently," he continues. "There is a lot of downsizing going on in this entire industry. Our employee base was much larger before the budget cuts in national defense spending. But even after selling off all this space, we still have enough room to hold 8,000 to 10,000 employees.

"This company is still moving forward and winning new contracts," he concludes. "We're in a good position to sustain or even grow within our business. We recently won $7 million in new business; we just took on a $4 million missile defense program and a $2.5 million satellite program."

The selling of land began in 1998 when Menlo Equities bought 144,000 square feet of land and subsequently leased it to Juniper Networks. Juniper Networks constructed two buildings on the land, making that its headquarters.

In 1999, Yahoo! purchased 34 acres of land through San Francisco-based Higgins Developers. Their completed headquarters will soon be ready. Yahoo! also purchased another 171,000-square-foot parcel through Menlo Equities. Construction on the larger parcel rapidly continues, while the smaller area remains in the planning stages, according to Jane Vaughn of Menlo Equities. Three thousand employees will fill the headquarters daily.

In November 1999, Jay Paul Co., bought about 25 acres from Lockheed Martin. Construction on the site that will house Ariba's new headquarters began in April 2000. According to Ariba director of corporate facilities Russ Southland at Ariba, which will continue to lease the land from Jay Paul Co., plans to complete their move into the 715,000-square-foot campus by May 2001. According to Southland, this campus will include four separate four-story buildings, each encompassing 175,000 square feet, and will have 2,600 employees daily.

Juniper Networks, continuing its expansion, purchased another two parcels from Lockheed Martin through Menlo Equities earlier this year. One 123,000-square-foot site that lies next to its headquarters is currently in the construction stage and, according to Vaughn, occupancy should begin in February 2001. The other 150,000-square-foot site lies across the street, and officials expect to move in sometime in early 2002.

None of the companies would comment on how much they paid for the land.

"This is terrific for Moffett Park and the city," Vaughn says. "It was an aging supply of buildings that wouldn't attract the wave of what's happening in Silicon Valley. This is the way for Sunnyvale. It's a good thing that will enable them to accommodate these new companies."

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