Meta pulls back on massive Bay Area real estate development

LATEST May 4, 6:10 p.m. The City of Menlo Park confirmed in a statement that the Willow Village project was “paused per Meta as of May 1.”

“The development agreement is still in effect, and the City will continue to review the applicant’s compliance with the terms of the development agreement annually,” the statement reads. “The 2025 annual review will be held at the May 18 Planning Commission meeting.”

May 4, 4:39 p.m. Meta’s sprawling housing development that’s been in the works for nearly a decade has been halted indefinitely. 

Known as Willow Village, the Menlo Park project planned to convert an industrial warehouse complex into a giant campus that included 1.25 million square feet of new Meta office space, 1,729 apartments, a park, a grocery store, a pharmacy, a 193-room hotel and a “town square.”

That’s now on hold “due to shifting real estate market conditions and evolution in space requirements. After careful evaluation, it was determined that the current environment does not support advancing a project of this type and scale at this time,” a statement on the development’s website reads.

The announcement comes on the heels of multiple layoffs at Meta, with around 700 jobs lost and around 8,000 more to come, according to reports. The company is aggressively shifting its efforts to artificial intelligence, offering nearly $1 billion to top executives in a new incentive package just days before the layoff news, as SFGATE previously reported. Just last week, the company reported it had exceeded earnings expectations in the first quarter of the year.

The Willow Village plans were first unveiled in 2017. They underwent an environmental review and received many approvals from the city starting in 2023, but construction had not yet started. 

“The decision to place Willow Village on hold was difficult. While the plan reflects a genuine vision for community-based development, the current real estate market and a shift in space requirements make advancing a project of this type and scale unworkable at this time,” Adam Alberti, a spokesperson for Peninsula Innovation Partners LLC, the property owner and applicant, said in the statement. “We remain deeply committed to the community and appreciate the trust and partnership throughout this process.” 

Meta said it had no further information about the development when reached for comment by SFGATE.

“This decision is not a reflection on the quality of the proposal itself, nor does it diminish the strength of our collaborative work. That work has involved extensive, multi-year engagement with local stakeholders, community organizations, and city partners,” the statement continued. 

Since it was likely that many Facebook employees would choose to live in the new apartments, news reports at the time of the project’s launch often likened it to a “company town,” referencing 19th-century infrastructure that developed around mills or factories, in which all the employees and their families lived on-site. “The ‘company town’ moniker is cute, but the residential units that are being built there will be open to the public,” Alberti, a spokesperson for Willow Village, previously told SFGATE. 

Alberti had also downsized the development’s impact, telling SFGATE in 2021: “It’s not that big. It’s not a city; it’s a mixed-use project that connects the existing campus to the neighborhood.”

Meta has gone through years of negotiations with the city for the project, even amending the proposal to include more housing after pushback on the amount of proposed office space. The statement said the company would continue to work with the city “on next steps.” The news comes as Menlo Park is on the hook for around 3,000 housing units by 2031, with residents fighting development on three downtown parking lots. 

Meta isn’t the only tech giant to have difficulty turning a company town-style dream into a reality. Google’s plans for a village in an industrial part of San Jose have also stalled.