Continued cuts in Department of Defense contracts and a trend towards consolidation of facilities mean the former powerhouse company now has around 8,000 employees in the Bay Area and a glut of extra building space and land.

"We've been in a constant state of downsizing since the fall of the Soviet Union," said Jim Carl, senior manager in facility planning and resource management.

Carl said that the downsizing has ended, but the company is still operating at just a fraction of its former size.

To deal with that, Lockheed went before the Sunnyvale Planning Commission on Oct. 24.

In a unanimous four-person vote, the commission approved a tentative plan by the company to divide its 303.98 acres into five lots. Lockheed said it plans to consolidate its operations into the northernmost lot, leaving the other four as potential sites for sale and redevelopment. This would allow the company to reduce the number of buildings it is paying for, get rid of unused property and lower costs.

The land is also important for Sunnyvale because the entire Moffett Park area is viewed as potential research and development space for the next wave of technology. Many in the city are looking at biotechnology and nanotechnology as Sunnyvale's next big tech boom, and the area north of 237 would be the incubator for that growth.

Planning Commissioner Brandon Sulser said the entire Moffett and Lockheed area is looked at as prime space for multi-story, class A office space, fit for corporate campuses.

There are eight buildings on the south half of the land; one is empty, and another will be empty within a year.

Even if the buildings aren't used, Lockheed must pay taxes and maintenance fees. Those costs translate into higher "overhead" costs in government contracts that the company competes for.

"Having excess facilities and the costs that go with them puts us in a less competitive position for contracts," Carl said.

While he did not know specifics regarding how much it costs Lockheed to maintain the land, Carl said it is in the hundreds of thousands of dollars.

At the meeting, Commission Chairman Chris Moylan said it was unfortunate to consider Lockheed losing more space, but that it would be good to see them as stronger competitors for government contracts.

Carl said it is unlikely that Lockheed will grow again and need the space it may sell off, but if that happens, he said it is likely that it could move into other offices in the Moffett Park area.

This is not the first time Lockheed has reduced its acreage and opened up development space. Yahoo! and Juniper Networks are both located on former Lockheed land, having moved there in 1999 and 2001 respectively.

"It's change," Sulser said. "Sunnyvale has always been kind of a Lockheed town, so it's strange to think of them having less land, but it will probably work out for the city."

Carl said there are no concrete plans for the site yet, and Lockheed is retaining control, ownership and responsibility for all the sites.