Thursday, June 5, 2008

Face-bloc blacklash & Valley joie de vivre

Maybe the backlash against Facebook will calm down now. Rumors are the cushy $600-a-month subsidy for employees who live within a mile of downtown offices has been cancelled.
So perhaps the blame heaped on the heaps of young Facebookers in downtown Palo Alto will let up.

The social-networking company’s presence has become ubiquitous in the last couple years. Up from its single office in 2004, the firm now rents five spaces and employs 600 people as of this spring -- and counting. Its logo-emblazoned track jackets, hooded sweaters, messenger bags and other collegiate apparel are sported by young people at every crosswalk.

All those people are pushing rents higher and crowding locals out of cafes, a summer 2007 Valleywag post groused. And as the company’s expansion continued unabated, so did the rumor mill, blaming Facebookers for exacerbating the already astronomical rent inflation of downtown.
I decided to write an article for the Palo Alto Weekly examining the Facebook influence on downtown. I found out commercial rents have indeed risen 20 to 25 percent in the last year, according to a local realtor. A residential realtor said subsidies such as Facebook’s are commonplace among tech firms, implying it’s not just the upstart firm inflating prices.
All those clothing logos actually help one employee spot her co-workers, who she otherwise wouldn’t recognize, the company is growing so fast. Read the whole article for more.
But if Facebook’s subsidy-cancellation causes employees to flee downtown, will University Avenue’s bustling vibe take a nosedive?

Currently, the company builds on an already-resurgent feel in downtown.
When I arrived at Stanford in 2002, directly after the tech blow-up, University Avenue seemed so cruelly named. Palo Alto was no college town. Sure, there were plenty of collared shirts eating lunch on the main drag and shoppers in the drugstores in the afternoon. But that was replaced by a weak trickle of pedestrians by the evening. We eyeballed each other curiously, like animals come to drink at a little-visited stream.

Of course, the whole area felt a bit deflated. Then, you could spot empty office parks from the freeway and see through their windows clear to the sky on the other side. It was a bit ghastly, and not just a little reminiscent of abandoned Gold-Rush era towns elsewhere in the West.

Fast forward six years.
It’s a scene from the film, “How Palo Alto got her groove back.” Despite some warning that the subprime crisis will – and has – already affected the area, there’s a genuine bounce-back feel. The restaurants are packed in downtown and several bars now charge cover, a formerly rare practice.

So will Facebook’s end-of-an-era crackdown on employee benefits put a damper on the hoo-rah feel? I don’t think so. Employees will likely continue to fill the street on work days and perhaps go out for drinks after work. (If they’re not busy playing beer pong in the office, that is.)
Since the firm provides free meals a-la Google, the eateries of Palo Alto will probably be minimally affected. Residentially, if some employees move away in search of cheaper pastures, other equally or more affluent renters will pop up to claim those checkbook-squeezing apartments. They will have an equal need for deodorant and coffee from downtown stores.

The bigger question is whether downtown will feel any different when the entire company moves. Rep Brandee Barker said Facebook rents rather than owns office space. And it has intentions to grow, grow, grow, according to reports on founder Mark Zuckerberg. If the company ever wants a campus, it’ll have to decamp to an office park elsewhere. Maybe it’ll make its new home in one of the last of the vacant complexes, still sitting empty out by the freeway…

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