A part of the BayHill project in San Bruno Calif., looking west on Bayhill Drive towards Cherry Avenue, YouTube, the applicant and owner of the BayHill project Phase I Development area, proposes to retain the two existing office buildings on the Phase I Site and construct two new buildings with 440,000 square feet of additional office space. (City of San Bruno via Bay City News)

The San Bruno City Council formally approved a pair of ordinances Tuesday that will pave the way the video-streaming platform YouTube to expand its headquarters at the Bayhill Office Park.

The council, with Mayor Rico Medina recused, unanimously approved an update to the Bayhill area’s land use plan that will serve as a guide to development in the area over the next two decades.

The council also approved the first phase of the project’s development as detailed by YouTube’s parent company Google.

The expansion will include 440,000 square feet of office space across a pair of three-story buildings that will sit on what are currently surface parking lots at the office complex, which is located near Interstate Highway 380 between Interstate Highway 280 and U.S. Highway 101.

The new office buildings will also include a three-level underground parking complex that will replace the existing parking spaces at a one-to-one ratio, according to city officials.

“The Bayhill Specific Plan is another example of smart planning that balances commercial development with community needs,” San Bruno City Manager Jovan Grogan said in a statement. “The Specific Plan provides a roadmap for sustainable growth that offers much needed funding for affordable housing and public infrastructure, as well as community benefit dollars that will have a lasting impact on the City of San Bruno.”

YouTube has been headquartered in San Bruno since 2006, the same year Google purchased the site for $1.65 billion. The site now brings in nearly $20 billion in advertising revenue annually, as of 2020.

Google and YouTube officials first began discussions with the city in 2016 to expand the office campus.

The following year, city officials determined that the expansion Google and YouTube sought would require updates to the land use plans guiding development across Bayhill’s entire 92 acres.

According to Grogan, Google and YouTube paid more than $3 million for the city’s planning officials and consultants to draft and complete updates to the Bayhill Specific Plan.

At the council’s first discussion of the Bayhill Specific Plan update and the YouTube campus expansion during its Sept. 28 meeting, YouTube Director of Real Estate and Workplace Services Drew Sherwood said YouTube’s expansion alone will result in an estimated $130 million in revenue for the city via development fees and funding for affordable housing and local schools

“At a time when so many communities are struggling due to the prolonged pandemic, we could not be more excited about the future for everyone in San Bruno,” Sherwood said.

City officials noted that maximum office development under the updated Bayhill Specific Plan will result in an additional $11 million in revenue beyond the revenue generated by YouTube.

YouTube officials said the company will pay a total of $56.2 million upfront in fees to the city for the first two phases of its expansion once construction begins on the foundations for the new office buildings.

Roughly one-third of that total is development impact fees, according to YouTube, as the company will pay some $20 million to the city to support the development of housing and other infrastructure necessitated by the increase in office development.

In the following phases of YouTube’s expansion, the company estimated it will pay an additional $74 million in fees to the city, including $29 million in development impact fees.

Councilman Tom Hamilton made an effort to assuage concerns that the city placed too much focus on office development in lieu of housing development, arguing the revenue generated by YouTube’s expansion will prevent the city from having to choose between either type of development.

“This is an office park,” Hamilton said. “And our commitment as a council, as a city, to affordable housing and housing in general is not changed by this project. And, in fact, a project like this provides us with an economic engine; it provides us with both one-time and ongoing revenue so that we’re able to provide housing elsewhere in the city.”

The council’s approval will allow YouTube to begin construction of its expansion once it has successfully acquired the necessary construction permits and related approvals, according to the city.