Apple's "Spaceship" Campus 2 is $2 billion over budget, behind schedule

In his last public appearance, Steve Jobs set out his plans for Apple's new corporate home, Campus 2. The new building would, Jobs said, be "a little like a spaceship," and would house around 13,000 Apple employees. The massive circular building would cover 2.8 million square feet and would be 4 stories high, with not a single piece of straight glass in the building. Jobs said that the new Campus would be two thirds the size of the Pentagon, and would be build on an area currently used for parking. The cafés alone would be able to accommodate 6,000 employees. 

Jobs reportedly told the Cupertino City Council that "[Apple has] a shot at building the best office building in the world. I really do think that architecture students will come here to see it." The Campus would be situated in a 176 acre area full of trees, and would hide all of the roads and parking spaces in the area underground. The design included 40-foot, floor-to-ceiling panes of glass, manufactured in Germany, which would provide views of the surrounding area. Jobs told the Council that "there isn’t a straight piece of glass on the whole building … and as you know if you build things, this isn’t the cheapest way to build them."

BusinessWeek have a profile on the building which includes the staggering cost of Campus 2. The project was originally set to cost $3 billion, but that price has since risen to "nearly $5 billion," a staggering increase placing the cost-per-square-foot at $1,500. The $5 billion figure pushes the Campus into a new territory, and makes the development more expensive that the new World Trade Centre complex in New York, which is currently under construction and has a budget of $3.9 billion.

The architects, Foster + Partners, have pushed the finish date back to 2016, one year after it was originally intended to be completed. BusinessWeek notes that the architect firm is looking for ways to cut costs, which were originally raised due to Jobs' exacting standards. Excavating the the site alone will take 6 months, and will require a continuous 24-hour convoy of trucks, according to BusinessWeek. 

While $5 billion does sound like a large sum of money, it is nothing compared to Apple's war chest and quarterly earnings. In Q1 2013, Apple made a profit of $13.1 billion, while raising their cash-in-hand to a staggering $140 billion. The project will use just 3% of Apple available cash, not taking into consideration the money Apple will take in between now and 2016. To put the $5 billion into context, Google splashed out $12 billion for Motorola, which will offer much less gain than a new office facility. 

The building is designed to be carbon neutral, with over 700,000 square feet of solar panels. These panels will generate roughly 8 megawatts of electricity, enough to power 4,000 homes. Despite the massive amount of solar panels, the Campus will require more power and Apple is negotiating deals with solar- and wind-energy companies. 

Source: BusinessWeek | Images via DeviantArt.net, Gizmodo

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So Sarah Palin wanted to "Build a bridge to nowhere" and Steve Jobs " wants to build a spaceship to nowhere"., they were made for each other.

If they took half the building and used it as a factory to build products right here in the USA it would be nice. If not, than its an expensive building for a company that may be losing its grip on a market they made popular.

> Jobs told the Council that "there isn't a straight piece of glass on the whole building … and as you know if you build things, this isn't the cheapest way to build them."

Why is this brought up in every freakin' article there is about this building? Ooooh, curved glass, this is so revolutionary, and it makes every other building in the world obsolete. Who cares? It makes Jobs sound like the douchebag he is/was.

Well it looks like a huge amount of jobs will be created because of this, so there's no reason for people to be whining about it.

This is one of the best things that Apple could do with their cash hoard.

Common reason why a project fails:
a) overbudget. -CHECK-
b) overtime. -CHECK-
c) design changes. -CHECK-
d) re-designs. (rebuild).
e) leadership changes.
f) design flags.

Right now, Apple Spaceship is "only" 3 out of 6.

Also, how much of the schedule slippage is due to REQUIRED approval from governmental entities? Big projects (and this is certainly a biggie from a local or even regional standpoint - never mind that it's Apple and therefore newsworthy in its own right) are going to get extra "scrutineering" simply to make sure the I's are dotted and the T's are crossed (hasn't the same been true of One World Trade Center, AKA Freedom Tower?); then there are those that seek to make a name for themselves by being even more nitpicky than usual (again, for political reasons), etc. Lots of reasons for schedule-slippage and things thus going over-budget. (Surprises are large regional projects being ahead of schedule and UNDER budget - such as the recent Wilson Bridge replacement - this is despite the involvement of THREE state-level departments of transportation, the US DoT, and almost as much paperwork as the Affordable Care Act.)

Well, the price increased due to the scope of project increasing too. Apparently the $3B was for a 6000 person office, where as the new design is for 12,000 to 13,000 people for $5B.

They'll also save quite a bit in energy costs. "Campus 2 is also planned as a "net-zero energy" complex. In addition to architectural energy-saving tactics such as advanced skylights and an airflow design that will help cool and warm the building, the campus will hold 700,000 square feet of solar panels, generating 8 megawatts of power. Although that's enough to power roughly 4,000 homes, Apple will still require additional power, and is said to be negotiating deals on solar- and wind-generated power to augment its supply."

szo said,
Well, the price increased due to the scope of project increasing too. Apparently the $3B was for a 6000 person office, where as the new design is for 12,000 to 13,000 people for $5B.

They'll also save quite a bit in energy costs. "Campus 2 is also planned as a "net-zero energy" complex. In addition to architectural energy-saving tactics such as advanced skylights and an airflow design that will help cool and warm the building, the campus will hold 700,000 square feet of solar panels, generating 8 megawatts of power. Although that's enough to power roughly 4,000 homes, Apple will still require additional power, and is said to be negotiating deals on solar- and wind-generated power to augment its supply."

So if the solar panels are providing enough power to power 4000 homes, how is it not enough power for this building?

All they need is LED leads, as I call them. In cellphones the LED you see on the front is made possible by a bulb inside that shines on a piece of plastic that captures the light and make it appear where the cutout is made on the casing.

In the real world usage, you use a block that is able to guide the light to shine down longer corridors. You only need to add a new block and light panel at the point where the light starts to fade. Depending on how bright the original source is, that light could shine for over 100FT before it needs a new block.

They could also use laser light. It could be a beam that all they have to do is put mirrors on the ceiling to bounce a light source to illuminate a single room or area. All they need is a centralized light source and mirrors to bounce the light to other parts of the room. Only the single source would need power. Far cheap and not much power consumption.

Tho having the power equal to how much 4000 homes use still not being enough is crazy.

There are so many ways to create artificial lighting sources that don't need lots of power.

TechieXP1969 said,
...

Funny if you think most of that power is used up by lighting. And somehow I would absolutely not be surprised if the vast majority if lighting in the building is LED.

szo said,
They'll also save quite a bit in energy costs. "Campus 2 is also planned as a "net-zero energy" complex.

Wow, their internet is going to be really slow.

$5bn for a building! Not sure if their current setup is inefficent but they make make good enough products as it currently is, so to me its waste, but they are beyond the point of no return

onionjuice said,

Apple investors are far from angry. Its sitting on $100 billion in cash, think again.


Well, that's what the article description said

onionjuice said,

Apple investors are far from angry. Its sitting on $100 billion in cash, think again.

But most of the money are not distributed amongst shareholders but keeped in a "piggy bank".

Wow! Think again twice, Apple stock was over 650 5 moths ago, and actually is just over 420. That made Apple lose $200 billions in stock Price, can be an investor and be happy with that!

Apple was trading at way too high a multiple of their earnings per share. This was nothing more than a correction. No one is ever happy when they lose money, but if you invest in a company (or chose to not deinvest) when it is as far over valued as Apple was, you are asking to have your money taken away.

Its really no different than all the people who lost tons of money in Cisco stock. Cisco was the stock that could not go wrong in the late 90's when the internet was first going mainstream. Everyone and their grandma wanted to invest in Cisco. Then in early 2000 there was a correction and a lot of people lost a lot of money. Was it because Cisco did anything wrong? Not really, it was just that the stock should have never gotten as high as it did.

I appreciate that your comment is a joke, but a campus this size and with that much tech isn't overpriced; $10 billion would be overpriced. Plus, what is $5 billion to Apple?

maxslaterrobins said,
I appreciate that your comment is a joke, but a campus this size and with that much tech isn't overpriced; $10 billion would be overpriced. Plus, what is $5 billion to Apple?

How is it NOT overpriced? They budgeted X dollars to build it and it's now $2B over that.
That's grade 1 math. geez

That's over budget, not over priced. If I want to buy a house for $250k, and then I find the perfect house but it's $300k, that would be over my budget. If I put in a bid for $270k and got the house, then that $300k house would have been overpriced.

That's grade 1 economics, I suppose.

ahhell said,

How is it NOT overpriced? They budgeted X dollars to build it and it's now $2B over that.
That's grade 1 math. geez

Over budget, yes. Over priced, no. This thing will house 13,000 Apple employees and looks like a bloody spaceship! $5 billion is nothing.

maxslaterrobins said,
I appreciate that your comment is a joke, but a campus this size and with that much tech isn't overpriced; $10 billion would be overpriced. Plus, what is $5 billion to Apple?

5 billions is actually a lot, even for Apple. $5 billions = 6.250.000 iPhone 5 devices at $800 (retail price).

maxslaterrobins said,
I appreciate that your comment is a joke, but a campus this size and with that much tech isn't overpriced; $10 billion would be overpriced. Plus, what is $5 billion to Apple?

A 70 stories skyscraper costs about half a billion and it holds up to 3'000 "seats". So, for 5 billions, it is possible to build 10 skycrapper with a cap of 30'000 "seats".

Anyways, one factor is the price of the terrain. However, apparently the terrain is "cheap" because the location.

how can you say that's not overpriced? Doesn't matter if they can afford it, I consider a $10 coffee overpriced! I can afford it but I still consider over priced.

The World Trade Center being built is budget is 3.8B 3.5 million sq ft 1800 ft tall, in the heart of NYC where shipping and assembling parts is a lot harder than doing in a open field. http://en.wikipedia.org/wiki/One_World_Trade_Center

Marina Bay in Singapore was built for $5.5 bil in construction cost and the additional amount with to land purchase http://en.wikipedia.org/wiki/Marina_Bay_Sands. If you was spending 5bil which would you want?

doniam9 said,
how can you say that's not overpriced? Doesn't matter if they can afford it, I consider a $10 coffee overpriced! I can afford it but I still consider over priced.

The World Trade Center being built is budget is 3.8B 3.5 million sq ft 1800 ft tall, in the heart of NYC where shipping and assembling parts is a lot harder than doing in a open field. http://en.wikipedia.org/wiki/One_World_Trade_Center

Marina Bay in Singapore was built for $5.5 bil in construction cost and the additional amount with to land purchase http://en.wikipedia.org/wiki/Marina_Bay_Sands. If you was spending 5bil which would you want?

If you build your house with carpet and Home Depot appliances you will surely spend less than using marble and Miele appliances. Now would you call the latter overpriced?
Unless someone has a very detailed knowledge of the Campus details is impossible to state if it is overpriced or not. The same fact mentioned in the article about the structure not having a single flat glass, supposedly they are all curved, is a clear example of it.

Do you review any of the two links? You didn't answer the question! WTC is the tallest building in the US, more Sq ft, built out of steel and is 1.2b cheaper. You telling me this doesn't compare when talking about pricing?

doniam9 said,
Do you review any of the two links? You didn't answer the question! WTC is the tallest building in the US, more Sq ft, built out of steel and is 1.2b cheaper. You telling me this doesn't compare when talking about pricing?

Not necessarily....

doniam9 said,
Do you review any of the two links? You didn't answer the question! WTC is the tallest building in the US, more Sq ft, built out of steel and is 1.2b cheaper. You telling me this doesn't compare when talking about pricing?

Building a tall building doesn't mean it costs a ton. Keep in mind that office buildings are nothing but a frame once you get past the lobby. When you lease the space you are expected to design and install the interior of your suite. Apple's campus is being fully built out with amenities and work spaces. When they are done the employees will be able to start working. When the new trade center is done it just means the smaller construction projects start.

Also, how much bigger exactly do you think that skyscraper is? You talk about it as if it makes Apple's campus look like a dog house. In reality, it has only 25% more square feet.

ShareShiz said,
LOL even their campus is overpriced
I wished I could have said it first. $3billion to $5B. Isn't that a 40% markup? Right about where they price all the crap they sell.

sphbecker said,

Building a tall building doesn't mean it costs a ton. Keep in mind that office buildings are nothing but a frame once you get past the lobby. When you lease the space you are expected to design and install the interior of your suite. Apple's campus is being fully built out with amenities and work spaces. When they are done the employees will be able to start working. When the new trade center is done it just means the smaller construction projects start.

Also, how much bigger exactly do you think that skyscraper is? You talk about it as if it makes Apple's campus look like a dog house. In reality, it has only 25% more square feet.

Your right building tall doesn't mean it cost more, but we are talking about NY, and #2 right again but we were talking about if it was overpriced and considering the other building that was built around the same price (hotel which is comparable to your second argument where everything is being outfitted) which would you spend your money on?