Report says Apple’s spaceship campus is $2B over budget

We already knew there would be delays for Apple’s 2.8-million square foot Campus 2 following reports in November. Apple originally planned to move around 12,000 employees into the currently under construction spaceship-like campus by 2015, but in November warned completion of construction would likely be delayed until mid-2016. Today we get some more insider info on the project in a report from Bloomberg Businessweek, claiming the project is now over budget and possibly delayed even further:

In a story titled “Apple’s Campus 2 shapes up as an investor relations nightmare,” citing sources close to the project, Bloomberg claimed Apple’s grandiose plans for the building have resulted in the budget nearly doubling to $5 billion:

Since 2011, the budget for Apple’s Campus 2 has ballooned from less than $3 billion to nearly $5 billion, according to five people close to the project who were not authorized to speak on the record. If their consensus estimate is accurate, Apple’s expansion would eclipse the $3.9 billion being spent on the new World Trade Center complex in New York, and the new office space would run more than $1,500 per square foot—three times the cost of many top-of-the-line downtown corporate towers.

Apple has yet to actually break ground on the site, but Bloomberg’s sources said Apple has plans to start demolition of 26 buildings that are currently on the land.  According to the report, the delays are due to extra time spent attempting to cut around $1 billion from the budget. Apple has also yet to complete deals with contractors:

One reason for the new timetable, say three people who have spoken to Apple personnel about the project, is that the company has been working with lead architect Foster + Partners to cut $1 billion from the budget before proceeding. Jobs and Apple first hired Norman Foster’s firm, renowned for the rebuilt Reichstag in Berlin and Hearst Tower in New York, in 2010. Apple has named a general contractor—a joint venture of DPR Construction, in Redwood City, Calif., and prefabrication specialists Skanska USA Building in New York—but has not finalized agreements with the scores of subcontractors needed to complete the job. Some contractors will be submitting bids by May. There’s so much dirt to be removed, excavating the site will take six months and require a continuous, 24-hour convoy of trucks, says a former Apple manager who heard a presentation from Foster’s firm.

The report also gave a behind the scenes look at how Apple will construct Campus 2:

Arriving by truck will be thousands of prefabricated 26-foot-long modules in various configurations—bathrooms, utility closets, and banks of offices complete with carpets and window treatments, say three of those who spoke with Bloomberg Businessweekabout the project. Because the work is done in factories designed specifically for the purpose, the approach can yield far more precise construction and fewer hours of on-site labor—and potential savings on local union rates. It’s also faster. Apple hopes to complete construction in two years vs. the three to five it could take using conventional methods…. Contractors would typically erect molds with crude scaffolds to pour the cement in place, but that leaves unsightly ruts where the scaffolding puts extra pressure on the surfaces. According to two people who’ve seen the plans, Apple will instead cast the ceilings in molds on the floor and lift them into place, a far more expensive approach that left one person involved in the project speechless.

Bloomberg noted Apple could have a hard time making deals with contractors, as it is currently “offering a cost-plus contract that pays only half the percentage of profit of some large deals.” There are many more interesting bits about Apple’s upcoming Campus 2 in Bloomberg Businessweek’s full piece.

A peek through the fence reveals what appears to be a life-size mock-up of the entrance to the future headquarters, complete with floor-to-ceiling glass and a huge banner hanging from the ceiling with a photo of an iPhone, like the ones that hang in the lobby of Infinite Loop. It’s clean, minimalist, and stunning—a four-story iPad.