“You know how normally you have a desert, and in the desert you have a little oasis?” said Matt Henry, president of the Belle Haven Neighborhood Association. “With us, it’s just the exact opposite. We’re here in Silicon Valley, which is absolutely wonderful. But we’re the little small desert in the middle of something great.” Now, Facebook, the world’s largest social network, is moving in to the neighborhood.

Facebook has grown to more than 750 million active users and is on the verge of an initial public offering projected to value the company at $100 billion. After outgrowing its Palo Alto headquarters, the company is moving to Belle Haven, where it is creating a campus large enough to accommodate nearly 10,000 employees. The move is to be completed by the end of the year.

Residents of Belle Haven and its neighbor East Palo Alto, which is also entrenched in an urban malaise, hope Facebook’s arrival signals their long-awaited integration into the Silicon Valley economy. They picture the company’s wealth and dynamism spreading across the freeways, bringing better housing, services and schools.

“The table is being set for some really great things to happen,” said Charley Scandlyn, executive director of the Ravenswood Education Foundation, which aims to bring East Palo Alto schools up to the same standards as those in neighboring communities.

“The whole Facebook mission is about connecting people,” Mr. Scandlyn said. “Sometimes our kids in East Palo Alto don’t feel like they get to be a part of the good dreams in the world. Here is Facebook, that actually gets to live out its mission in its own neighborhood.”

It may not be that easy. Across the Bay Area, cities continue to hope that tech companies will provide the spark for a renaissance in low-income communities. Earlier this year, for example, San Francisco granted Twitter a six-year tax holiday to lure the company to the blighted mid-Market district.

But there is no conclusive evidence that the presence of a technology company can turn a neighborhood or a city around. Google’s hometown, Mountain View, still struggles to pay its bills and is threatening to lay off employees, despite the presence of several tech companies, including Google, with a combined value of well over $200 billion. Belle Haven’s hopeful uncertainty underscores the growing disconnect between a technology boom fueled by the explosive growth of social media companies and the continuing struggles of the communities in which those companies are located.

According to economists and public officials, the divide is related to the nature of the tech economy, much of which takes place in cyberspace, removed from the world of cash registers, low-income jobs and sales taxes. Companies like Google and Facebook pay property taxes, but cities draw little direct economic benefit from their core businesses. Their highly skilled, highly educated employees commute to lavish, insular campuses where most of their needs are met.

“A social networking company doesn’t have as much revenue-generating material,” said David Johnson, Menlo Park’s business development manager.

Still, Mr. Johnson said he was pleased to have found a company to fill the vacated one-million-square-foot property once occupied by Sun Microsystems.

“How can you not be excited about Facebook coming to town — it’s a potential game changer for that whole part of town,” Mr. Johnson said. “They are showing all indications of being a great corporate neighbor.”

Menlo Park officials said that as Facebook expanded, the city would have leverage to negotiate additional compensation. The site is currently zoned for 3,600 employees. Once Facebook outgrows that number, “the city will be looking for something in exchange,” said Justin Murphy, Menlo Park’s development manager.

In its recent approval of a hotel project, the city agreed to alter zoning requirements in exchange for a guarantee that the developer would spend $1.25 million on capital improvements and lock in the amount of revenue the city would receive from a hotel transient tax.

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Article source: http://www.nytimes.com/2011/08/12/us/12bcfacebook.html