SAN JOSE, Calif. - April 17, 1996 - Cisco Systems, Inc., the world leaderin internetworking, today announced an agreement with the State ofCalifornia and City of San Jose on the purchase of approximately 139 acresof land to accommodate the company's future growth.
The agreement reflects a unique joint effort by the State and City toretain high-growth companies who can make a positive long-term economicimpact in the region. It was announced at a joint appearance at Cisco'sSan Jose headquarters by California Governor Pete Wilson, City of San JoseMayor Susan Hammer and Cisco Systems Chairman John Morgridge.
"This agreement signals our confidence not only in our own future, but alsoin California and the City of San Jose as a place to do business,"Morgridge said. "In the highly competitive environment for site location,we have been impressed by the willingness of the State and City to work outa mutually beneficial arrangement to meet our growth needs."
This transaction is valued at approximately $90 million for the estimated139-acre, undeveloped site. The State and the cities of San Jose andMilpitas will together provide approximately $20 million in infrastructureimprovements, mostly road work.
"This agreement demonstrates the strong commitment by the State to ensuresolid, long-term job growth in California," Governor Wilson said. "We wantleading high-tech companies like Cisco to find a healthy business climatein California."
"Cisco's decision to continue growing its headquarters in San Jose isfurther evidence that San Jose truly is the capital of Silicon Valley,"Mayor Hammer stated. "Cisco has been an excellent corporate citizen, andwe are very pleased to know they will be a major force in the San Jose'seconomy for years to come."
The land is located in northeast San Jose, adjacent to Agnews StateHospital. No specific building plans were announced, pending completion ofthe sale and land-use planning approvals that are expected to take about ayear. However, the company anticipates the site will accommodate thecompany's growth for five to 10 years. Cisco Systems will act as its owndeveloper.
In the last two years, Cisco's employment in the San Francisco Bay Area hasgrown from less than 1,900 to more than 3,200. Assuming current businessconditions, the company believes Bay Area employment could grow to nearly10,000 by January 2000. Additional facts regarding the announcementinclude:
- The potential creation of up to 12,000 indirect jobs in the Santa Claraeconomy.
- The economic multiplier effect from the new site estimated at more than$2.5 billion in sales among area businesses in the near-term.
- An estimated increase of $6.7 million in the state's annual sales taxrevenue. This will be generated from two sources - Cisco Systems'direct purchase of taxable goods and the increase in retail sales oftaxable goods induced by Cisco's expanding output.
- A one-time collection of state sales tax of approximately $4 millionfrom the initial purchase of furniture,fixtures and equipment.
- An expected increase in the City of San Jose's General Fund andproperty tax receipts by more than $2 million annually as a result ofincreases in sales, utility, property and other taxes.
Cisco Systems was founded in 1984 by a small group of computer systemsprofessionals from Stanford University. Initially operating out of a housein Atherton, the company shipped its first products in 1986 and lateropened offices in Menlo Park. In 1994, the company moved to a 46-acre siteon West Tasman Drive in San Jose. It currently occupies eight buildingswith a combined 811,000 square feet. Four more buildings, totaling 553,000square feet, are nearing completion across Tasman Drive. Plans are beingcompleted for construction of two more buildings at the corner of TasmanDrive and Rio Robles.
Current worldwide employment for Cisco Systems is approximately 5,800. Thecompany's revenues over the most recent four quarters (ending January 1996)were $2.66 billion. With a market capitalization of about $25 billion,Cisco is the third-largest company on the NASDAQ stock market and ranks #40on the BusinessWeek 1000 listing.
Cisco Systems (NASDAQ: CSCO) is the leading globalsupplier ofinternetworkingsolutions for corporate intranets and the global Internet.Cisco's products, including routers, LAN and ATM switches, dial-up accessservers and network management software, are integrated by the
Posted: Wed Apr 17 12:32:18 PDT 1996
