—one of the world's leading Internet subscription service providers for movies and TV shows—has outgrown its Winchester Avenue location and is looking to expand—and possibly move out of town if a larger location is not found.
In a letter dated May 10, Amy Dee, director of procurement and corporate facilities, said its headquarter campus can no longer accommodate its employees.
It said the company had already expanded to a building to the north of its current location at 100 Winchester Circle in what is called the South Bay Industrial Park and is actively looking at options for additional space to support its growth needs.
"We'd like to stay in Los Gatos but are concerned about the ultimate availability of space to the south and north," Dee said.
To give its employees a place to work while the company is looking for a larger campus location, it recently leased additional space to the north of its campus and it has taken space in the existing buildings within the Los Gatos Business Park, 90-160 Albright Way and 14600 Los Gatos Blvd., where developer John R. Shenk is proposing to rezone to build to high-rise office buildings and homes for families and seniors, if needed.
On May 11, however, planners decided to hold off on the matter, because they weren't prepared to adequately respond to Shenk's requests and Netflix's wishes. On May 31, however, they recommended that the 21.6-acre site at the intersection of Albright Way and Winchester Boulevard be considered for offices and research and development uses and that the height of the proposed buildings be lowered from five stories or 85 feet to three stories or 55 feet.
The recommendation, which now goes to the Los Gatos Town Council on June 20, could be good for Netflix, because, as Dee puts it, "We would like to continue to grow and invest in Los Gatos."
Like other high-tech corporations, Netflix has said it needs a critical amount of office space and the ability to grow into high-quality, "five-story buildings that facilitate quick intra-company communication."
Dee said, "Our employees interact on an ongoing basis during the workday, and our experience in the buildings we currently occupy has only served to reinforce this point."
Shenk said companies like Yahoo, Facebook and Google all have five-story buildings that are more energy efficient.
Los Gatos Community Development Director Wendie Rooney said Netflix had expanded to the buildings within its current campus last year.
Rooney explained that Mike White with Huettig & Schromm Inc., owner of Los Gatos Business Park, wants town officials to approve a 20-year development agreement giving him certain rights, such as the ability to build the two office buildings on the site.
But what if town officials continue to balk at the idea of the company's desire for high rise office space and Shenk's desire to add more than housing on the site? Would Neflix move?
"Of course it could move," Roonie said. "It doesn't own the building. It's leasing ... Netflix is one of our largest sales tax revenue providers ... It would be a significant loss for the town.
Roonie indicated there are different scenarios that have been presented for the land. The developer could build only offices, up to 550,000 square feet of commercial space. However, if the property owners don't raze the existing buildings at Los Gatos Business Park, only about 250,000 square feet of commercial space could be built.
They would also have to comply with triggers for the land, Roonie said, such as building the 250,000 square feet of office space and letting 30 months pass from the construction of such buildings to then exercise their right to build residential units.
Los Gatos Economic Vitality Manager Jessica von Borck said if Netflix were to move out of town it would have negative fiscal ramifications for the town.
"Not only does Netflix bring revenue to the community, but they also serve as a business attraction tool, because businesses tend to locate where like industries cluster," von Borck said. "Because of Netflix's presence in Los Gatos, the town has also received worldwide attention. Everybody knows Netflix is in Los Gatos and that Los Gatos is a good place to grow and locate your business."
Roonie said concerns about residences being built next to the proposed Netflix campus, which would impact enrollment numbers at local schools, can't be addressed, because the town doesn't have the ability to force the company to build schools.
The state has determined school impact fees that Netflix would be required to pay and that would constitute full mitigation of impacts, Roonie said. "We can't override those requirements. That's state law. We can't require that the developer build a new school or pay anything greater than what the state already requires."
And those numbers aren't high enough for Leslie Paulides, assistant superintendent. According to her student generation numbers for future development in the town, the district is going to need to build a new campus soon to accommodate new students who will move into town with the new housing proposed.