BERLIN — It looks like Google may have a fight on its hands in Berlin.
The search giant wants to open a new startup hub in the city’s Kreuzberg neighbourhood but locals are concerned about gentrification of the area.
Kreuzberg has a reputation for being one of Berlin’s edgiest districts; it’s full of punks, anti-fascists, and other lefty-types. The neighbourhood is widely perceived as being “cool,” which means that some of the world’s biggest companies want to be based there, including Google, whose market cap of around $US640 billion (£495 billion) makes it one of the most valuable companies in the world.
Google, which already has an office in Berlin’s upmarket Mitte district, first announced it wanted to open up a space in Kreuzberg last November when it unveiled plans for a new 2,400 square metre startup “Campus” that would open in autumn 2017. That date has now been pushed back to the end of the year.
Mary Grove, director of Google for entrepreneurs and campus, wrote in a blog post: “Our goal for Campus Berlin is to support the existing startup ecosystem even more and to promote entrepreneurship.”
Google wants to rent around a quarter of a former electricity substation called Umspannwerk that was built around the 1920s for its Campus space. Today, Umspannwerk is primarily used as an event space but it is also home to around a dozen companies and a restaurant called The Volt. No more than 10 Google employees will be based at Campus Berlin but dozens of startups will be able to use space.
But residents in the area are concerned that Google’s presence will damage the area’s vibe and drive up rents as entrepreneurs backed by investor’s millions rush to move in. Anti-gentrification protestors in Berlin deliberately marched past Umspannwerk on May Day, which occurred on Monday.
“While I see the concept of the Google Campus being a good asset to the city, I find it to be rather out of place in Kreuzberg,” Jazmin Medrano, a life coach and a startup cofounder, told Business Insider. “Yes, gentrification is part of Berlin, but Google coming in to the heart of Kreuzberg is like a conservative, right-winged, homophobic person going to Kit Kat Club. It makes no sense.”
Medrano added: “Google has a bigger social responsibility to consciously think out where it’s wanted, where it’s not, and its implications. The cool factor to Kreuzberg is that it’s alternative, somewhat dodgy, mysterious, raw, and still a bit unadulterated. Hence it being seen as cool, hip, and vibrant. And I’m sure Google wants to be in the mix of a hip scene. But what Google doesn’t realise is that its mere presence will alter the cool factor, the makeup of Kreuzberg. And I think that is what most people fear.”
Ngoc Duong, co-owner of Katie’s Blue Cat coffee shop, situated less than 100m from Umspannwerk, told Business Insider that she is concerned many of her staff will be priced out of properties in the area if rents go up any more. Fortunately for Duong, she’s been in Berlin for 17 years and she’s on one of the city’s highly sought after old rental contracts — Berlin property laws prevent landlords from increasing rents without making significant changes to the building first.
While Campus clearly has its sceptics, not everyone thinks Google moving to the area is all that bad.
Niklas Lechner, founder of Berlin fintech firm Innolend, told Business Insider: “From a company/startup point of view, I think it’s great to have a Google Campus within your city/district. Besides attracting new talents and companies, it will also be a great source of inspiration having them here and good for the overall vibe and ecosystem in general.
“However, I can also understand other local residents who are concerned about increasing rents, noise and especially the influence this might have on the overall culture, since I am also living 50 meters from here. We’ve moved here because I don’t want to run into startup people every day, especially on weekends.”
Last week, Green Party councillor Julian Schwarze reportedly told the Neues Deutschland newspaper that the initial construction plans for Campus had been sent back to Google because of noise concerns from local residents and because “the planned installation of an additional story in the historical building would also exceed the designated floor-area size for the district.”
Google downplayed the remarks and said Campus hadn’t been “rejected” as several media reports (including Business Insider) suggested, adding that it was perfectly normal for changes to be made during the planning process.
However, the search giant admitted that Campus Berlin may open “a few weeks” behind schedule but insisted that it will be open by the end of 2017.
Ralf Bremer, a spokesperson for Google, told Business Insider: “We are excited to house Campus Berlin in the [substation]. As with every rebuilding of historical sites there are tasks that we solve together with the authorities. We build out our space for local community and local entrepreneurs, and are thus working closely with the city to not only preserve, but highlight, the historic features of the building.”
Bremmer did not specify what the next step was for Google in the planning process of Campus Berlin.
Google already has six Campus buildings in cities around the world, with the others in London, Tel Aviv, Seoul, Warsaw, Sao Paulo, and Madrid. The Campus spaces are designed to help entrepreneurs to form and build their businesses alongside other founders that are doing the same thing. Google claims that startups in its Campuses have raised over €260 million (£220 million) and created more than 4,600 new jobs.
“We ourselves began in a garage nearly two decades ago and today we celebrate our entrepreneurial roots,” Google writes on the Campus website. “Google for Entrepreneurs partners with startup communities and builds Campuses where entrepreneurs can learn, connect, and create companies that will change the world.
“Since 2011, we’ve launched Campuses and formed partnerships that support entrepreneurs across 125 countries.”
Google isn’t the only tech giant looking to move into Berlin’s now-trendy old buildings. Elsewhere in the city, homegrown tech giant Zalando has recently opened a clothing store in a building on the River Spree dating back to a similar period.
Get the latest Google stock price here.