Another high-tech company chooses downtown


Philip Langdon

New Urban Network

Nokia, the Finnish cellphone maker, is moving its Santa Clara County, California, offices into a new development in the increasingly pedestrian-oriented downtown of Sunnyvale, California.

The relocation of approximately 500 Nokia employees to a new $76 million downtown building is seen as a major step toward transforming the center of Sunnyvale, a Silicon Valley city of approximately 140,000 people.

For several years, Sunnyvale, approximately 50 miles south of San Francisco, has had an on-again, off-again experience with downtown redevelopment. In 1979 the city did what many communities were doing at the time — it enticed a regional mall to open in what had been the traditional downtown shopping district.

The indoor mall, Sunnyvale Town Center, prospered for a couple of decades, but several years ago it started to fail. In 2007 it was demolished. Attempts at replacing the mall with street-oriented, more traditional development went through stops and starts as developers announced plans and then encountered financial obstacles.

Now the downtown’s outlook is improving. A New York Times article, available here, says city officials hope Nokia’s lease of the new building for a regional headquarters “will be the catalyst to revive a troubled 36-acre downtown redevelopment project after more than a decade of false starts by one developer after another.”

The Times said it was “unusual, at least among the high-tech businesses of Silicon Valley,” that Noka would decide “against creating a stand-alone, enclosed campus, with features like its own commisary [sic] and gym.”

Such moves are not unheard of in the tech world, however. A June 2010 New Urban Newsarticle, told about the shift of some high-tech offices from automobile-reliant locations in Seattle’s suburbs into the pedestrian-oriented downtowns of Bellevue and Kirkland, Washington. “Drive-only suburban office parks are going to be pretty unattractive when young people want walkable places,” Edward T. McMahon, a senior resident fellow at the Urban Land Institute, observed in the June article.

Nokia’s move is thus just the latest in what may be a growing rejection of stand-alone, car-dependent locations.  The Times report included this statement: “On looking for a location in which to consolidate its offices in Santa Clara County, “there were many vacant buildings, but they tended to be isolated places,” said Karen Lachtanski, a spokeswoman for Nokia. “We wanted to be in an area with amenities, such as being able to go out at lunchtime and have a choice of different places to eat.”

Some restaurants in downtown Sunnyvale have noticed an increase in their business since December, when the Nokia employees began arriving.

In the case of Sunnyvale, Nokia’s commitment to lease the building has been crucial to reviving a development — owned by a venture of RREEF and Sand Hill Property Company — that had fallen into foreclosure more than three years ago.

Said The Times: “While lenders are generally wary of extending more money to failed projects, the interest from Nokia was sufficient to induce the current lenders — Bank of America and Wells Fargo — to advance $70 million to complete the building and related infrastructure like streets and sidewalks.”

Other physical changes in the core of Sunnyvale have been under way. Wikipedia reports that previously-closed portions of the main streets in downtown Sunnyvale were reopened in November 2009 “as part of the ongoing downtown redevelopment, marking the first time in over three decades that those street blocks have been open to vehicle and pedestrian traffic.”