October 7, 2005

Hitachi GST delays opening of headquarters in Evergreen by one year

By Carolyn Straub
Staff writer

Hitachi Global Storage Technologies plans to fully occupy its new worldwide headquarters at the former Dade Behring building in Evergreen by September 2006, more than one year later than originally expected.

Hitachi Global Storage Technologies plans to fully occupy its new worldwide headquarters at the former Dade Behring building in Evergreen by September 2006.

In 2004, the company had anticipated moving its worldwide headquarters from the Cottle Road campus to the southeast Evergreen location in 2005.

“We are now looking toward the end of next September,” said John Grewold, manager of real estate and site operations for Hitachi GST. “The Dade Behring building is not vacant. It is still being refurbished. We delayed the demolition and construction, and a new schedule now mandates opening by September 2006.”

Hitachi is reconfiguring the interior portion of the Dade Behring plant to accommodate a new research facility with laboratories and tools.

The site will eventually house Hitachi’s San Jose Research Center, as well as the worldwide campus. Hitachi has been leasing room for its research operations from IBM at Big Blue’s Almaden Research Facility on Harry Road located near Santa Teresa County Park.

“Our plans are moving forward,” said Jim Pascoe, corporate communications manager.

Hitachi GST was founded in 2003 after the strategic combination of Hitachi and IBM’s storage technology businesses. Hitachi GST bought the hard-drive operation from IBM, recommitting to San Jose. IBM purchased Hitachi’s headquarters at Cottle Road, which will be maintained as a manufacturing facility after the move.

“When we purchased the HDD or hard disk drive business from IBM, we bought a portion of their research work,” Grewohl said.

“We will combine our research group with our worldwide presence in southeast Evergreen,” Grewohl said.

“Basically we are not moving as many employees as we thought,” Grewohl added. Instead of the 650 employees originally targeted to relocate, according to a June 2004 story that appeared in the Evergreen Times, about 500 employees from the Cottle Road site and the San Jose Research Center will now go to Evergreen.

No new jobs will be created, according to Hitachi GST, because the intent is to find a solution for building a new headquarters and lab. Hitachi hopes to invest in excess of $250 million in the next decade in the site. Last year, San Jose City Council approved the memorandum of understanding outlining the global company’s plans to relocate to the district.

The move will take the administrative functions from Cottle Road, such as sales, marketing and finance operations, said Pascoe, as well as the research arm from Harry Road. Cottle Road will become a smaller presence on 150 acres, instead of its present 332 acres, and continue to make hard-drive components as a fabrication facility.

The remaining 182 acres is currently going through the process of being rezoned and redeveloped to allow future mixed uses of the land in the neighborhood for industrial, residential and retail development.

The Dade Behring building is being leased with an option to buy. “That works better for our interests and is in the leasing agreement,” Grewohl said. The proposed 21-acre, 377,000-square-foot new campus at 3403 Yerba Buena Road in the Evergreen District won’t change, he added.

Plans will feature a shuttle service for Hitachi employees to Evergreen to provide transportation to and from Cottle Road meetings, which may help reduce traffic. Labs, office space, a cafeteria and security building are planned for the new Hitachi premises. “It will be larger and will concentrate and expand what we have,” said Grewohl.

“I think it is good that they are here,” said David Cortese, District 8 councilmember for Evergreen. “Lunch businesses will benefit, and maybe the home buying business, however sales tax is the big one. Companies like Hitachi GST that have products to sell may collect sales taxes at headquarters. The city gets a big chunk of sales taxes from companies that file their taxes from a San Jose address.”

“The devil’s in the details as to how much economic benefit we will get,” he added.

For more information, visit the Hitachi GST Web site at www.hitachigst.com.