Apple’s planned new spaceship-like campus headquarters has ballooned in price to almost $5 billion and is being attacked as wildly extravagant by angry shareholders.
Bloomberg quotes anonymous sources “close to the project” who say that since 2011 the budget for gigantic Apple’s Campus 2 has risen from less than $3 billion to close to $5 billion – more expensive than the $4b new World Trade Center complex in New York.
Apple is now working with British architects Foster & Partners to cut as much as $1b from the budget before work begins, delaying the costly project that will host as many as 13,000 Apple employees. Apple’s current Infinite Loop HQ houses a mere 2,800 employees.
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Originally planned for a 2015 move-in date Apple now expects that won’t happen until at least 2016. The Apple HQ delay is due to possible cost-cutting and legal challenges.
Bloomberg reports that, while $1 billion is still less than 1 percent of Apple’s $137 billion in cash reserves, major shareholders are angry that so much is being spent on a flashy new HQ but none handed back to stockholders.
“It would take some convincing for me to understand why $5 billion is the right number for a project like this,” said Keith Goddard, the chief executive of Capital Advisors Inc, which owns 30,537 shares of Apple.
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“This is rubbing salt in the wound, to spend at a level that most anyone would say is extravagant, at a time when they’re being so stingy on dividends.”
Bloomberg also points to bad omens for the project. Before nose-diiving in value and importance once-big-name tech giants such as Silicon Graphics, Borland Software and Sun Microsystems all suffered the “campus curse” where their fortunes reversed shortly after building swanky new offices.
The colossal curved-glass campus is also attracting criticism from architects who claim that the Steve Jobs project is a matter of aesthetics trumping productivity. While Jobs previously favoured floor plans that promote as many chance meetings as possible the new circular plan could isolate people and teams.
“I would be concerned that it would be alienating, as opposed to convening,” says Scott Wyatt, a managing partner at NBBJ, a Seattle-based architecture firm that is designing offices in the region for Google and Samsung.
Rather than making it a great place to work, “it seems more like an object, just like the iPhone is an object,” he told Bloomberg.
“I can imagine Jobs going through some of Foster’s buildings and thinking, ‘This is what architecture should be,’” said Wyatt. “This isn’t a bad thing, but they’re an architect’s architect, not a customer’s architect.”
“The overall feeling of the place is going to be a zillion times better than it is now,” Jobs told the Cupertino City Council four months before he died.
While the project has noble aims in being self-sufficient in terms of energy the burgeoning budget is much about expensive materials.
“As with Apple’s products, Jobs wanted no seam, gap or paintbrush stroke showing; every wall, floor and even ceiling is to be polished to a supernatural smoothness. All of the interior wood was to be harvested from a specific species of maple, and only the finer-quality “heartwood” at the centre of the trees would be used,” Bloomberg quotes a person briefed on the plan last year.
“It’s something like 6 kilometres of glass,” said Peter Arbour, an architect with German glass manufacturer Seele that already makes the glass staircases in Apple Stores around the world. “Normally we talk in terms of square feet.”