Google plans major corporate campus in Ann Arbor

Internet giant Google is planning a major expansion of its Ann Arbor operation with plans to construct a new facility near the University of Michigan's North Campus.

The company confirmed Friday that it will relocate its current operations out of downtown Ann Arbor to a new corporate campus on the city's north side.

"Google has had a wonderful home in Ann Arbor since 2006, and we're thrilled to continue to grow here," said Mike Miller, head of Google's Ann Arbor office, in a statement. "We're excited to move to the north side of the city and create a campus. We're looking forward to getting to know our new neighborhood."

Google will lease a current office on Traverwood Drive and construct an adjacent new facility, all totaling about 140,000 square feet. The new operation will continue to serve primarily as a sales office.

The company has more than 400 employees at its Ann Arbor and Birmingham operations. A spokeswoman would not discuss hiring projections.

But the additional space, owned by Ann Arbor real estate firm First Martin, clearly positions the Google to expand its workforce in a key entrepreneurial hub.

"It's really very positive that they have had a good experience in the community and they want to grow here," said Paul Krutko, CEO of economic development group Ann Arbor SPARK, in an interview. "There's an adage in my business that companies come where they're wanted and stay where they're appreciated. They've had an environment where they've been able to thrive."

The company currently leases about 85,000 square feet of the McKinley Towne Centre office complex at the corner of Liberty and Division in the heart of downtown Ann Arbor. The office primarily handles sales for Google's AdWords search advertisements, its primary source of revenue.

Google also recently signed a lease for 30,000 square feet at the South State Commons II building northeast of the corner of South State Street and Eisenhower Parkway in the Briarwood Mall area. That office was designed as temporary overflow space until Google decided how to permanently handle its growth.

The new corporate campus will consolidate all of Google's Ann Arbor functions into one location in a space abutting a nature area.

The company plans to incorporate employee feedback to design one of its famed, customized office spaces with large, contiguous floor space.

Google first came to Ann Arbor nearly a decade ago to much fanfare, with economic development officials hailing the expansion as a sign of the region's technological strength.

Ann Arbor SPARK's Krutko said Google's presence in Ann Arbor still burnishes the region's technological brand, serving as an economic development anchor, even though it's not devoted to software development.

"I can't tell you how important that location decision validated this as a place for technology companies to thrive and be successful," Krutko said.

When Google came here in 2006, it had plans to hire 1,000 workers within five years, bolstered by tax credits from the Michigan Economic Development Corp., but its growth slowed amid the Great Recession.

Google can still draw upon that tax credit, Krutko said. The company is not expected to pursue separate incentives.

Although the company's move will create a hole in the downtown Ann Arbor office market, it's not likely to stay empty for long.

Albert Berriz, CEO of McKinley, which owns Google's current downtown office, told the Free Press last month that his firm has already received extensive interest in the space. He said brokers plan to show the office to one user that could take the entire space.

Contact Nathan Bomey: 313-223-4743 or nbomey@freepress.com. Follow him on Twitter @NathanBomey.