Google has struck a deal to expand its office space by 50 percent by leasing land on the grounds of NASA's Ames Research Center, near its Silicon Valley headquarters.
Under the terms of the deal, announced Wednesday, Google can build on 42.2 acres at the former naval air base in Mountain View, Calif. The lease carries an initial term of 40 years and calls for periodic escalations in rent. Options to renew would come at 10-year intervals, with a total term of up to 90 years.
The undeveloped land between Moffett Field, the Googleplex headquarters and the wetlands of San Francisco Bay gives Google room to build up to 1.2 million square feet (111,500 square meters) of offices and campus research facilities.
Google will pay NASA an initial base rent of $3.66 million per year, based on a fair market value assessment of the prime Silicon Valley real estate, the Internet company and the space agency said in a joint statement. At that rate, payments would total more than $146 million over the 40-year minimum lease term.
The deal makes Google the space research center’s biggest tenant, a NASA spokesman said.
NASA plans to use the proceeds to help pay for maintenance and capital improvements at Ames. In addition to housing NASA offices, the facility plays host to a limited-use air field and 40 tenants, including 30 companies, six nonprofit organizations and several university campus extensions. The facilities stretch across 2,000 acres, NASA said.
NASA spokesman Michael Mewhinney said Google’s lease payments will help defray the $7 million cost of operating the air field and other facilities at Ames Research Center. Roughly $4 million already comes from the other organizations leasing space.
NASA has been working for years to develop a research park on the center's grounds. To qualify as a tenant, an organization must be involved in activities related to NASA’s research agenda, which includes not just space but also biotechnology, nanotechnology and defense projects.
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Tenancy “is not open to anyone off the street that says, ‘Oh, I want some prime real estate in Silicon Valley at fair market value,”’ Mewhinney told Reuters.
David Radcliffe, Google's vice president of real estate and workplace services, said in a written statement that the deal was “emblematic of the mutually beneficial partnerships that can be created between the public and private sectors.”
“This long-term lease agreement is a key component of Google’s stragegy for continued growth in Silicon Valley,” he said.
Moffett Field has been used for occasional flights by nearby military aerospace contractor Lockheed Martin, visits by government officials on Air Force One, and, in a minor local controversy, Google’s top management.
Last year, Google co-founders Larry Page and Sergey Brin along with chief executive officer Eric Schmidt reached a separate deal to pay $1.3 million a year to land their Boeing 767 plane and two smaller planes on the airstrip, according to a New York Times report. The deal was criticized as a sweetheart deal for billionaires.
Google plans construction on the new land in three phases, with the first stage to begin in September 2013, the second in 2018 and the third in 2022.
NASA took over Moffett Field after the U.S. government elected to shut down the Navy base there in 1994.
The land deal is part of a series of ties between Google and NASA that began nearly three years ago. The two organizations have announced agreements to work on a variety of projects ranging from space to mapping and disaster response.
This report includes information from Reuters and msnbc.com.