CITYWIDE — Another rapidly expanding startup is leaving Santa Monica.
Developers of one of the world’s most played videogames, Riot Games, is headed to West L.A., about a block outside of city limits.
City Hall has acknowledged that Santa Monica is facing a shortage of mid-sized creative office spaces for expanding start-up companies.
Riot Games, which makes League of Legends, an online computer game that has exploded in popularity in the past two years, is worth and estimated $200 million according to a USA Today article.
Currently, It has nearly 1,000 employees at offices scattered throughout the city. Riot Games hopes to make the move to a 280,000-square-foot campus on Bundy Drive and Olympic Boulevard in early 2015.
“In short, Santa Monica doesn’t have enough office space, Riot Games outgrew their space and there wasn’t enough contiguous office space to house them,” Jason Harris, City Hall’s Economic Development Division manager, said in an e-mail.
In 2011, Google announced it was leaving for Venice and city officials have said that other companies are growing out of their offices.
“The city is working with Sony and Red Bull to address their facility needs but they face similar challenges,” Harris said.
Riot Games has been looking for office space for about a year, said a company representative who asked not to be named.
“These things kind of creep up,” the employee said. “We’ve experienced a ton of growth within the last year.”
For Riot Games, the city boundary means less than it does for City Hall.
“I just think that this was the best fit,” the Riot Games spokesperson said. “It’s as close as we could get to being in Santa Monica without actually being in the city of Santa Monica.”
Riot Games’ decision to leave comes in the middle of a debate over the future of the Papermate site in the Bergamot neighborhood. A proposed agreement with developer Hines would bring both residential units and up to 374,000 square feet of creative office to the site.
Planning Commissioner Richard McKinnon has been vocal in his belief that the area needs housing before it needs offices, and Riot Games’ departure does little to change his mind. Santa Monicans for Renters’ Rights, the leading political party in Santa Monica, recently wrote a letter to city officials calling for more housing and less office space.
A campus as large as the one that the gaming company is headed to is not “mid-sized” and is hard to find in any city, McKinnon said.
“These kind of things happen all the time,” he said. “Boeing moved from Chicago to Seattle. There are moments when cities are not big enough to deal with growth.”
Santa Monica has had a jobs-housing imbalance for 15 or 20 years, he said, meaning there are not enough homes to house workers, creating commuter traffic that clogs city streets.
At a recent Planning Commission meeting, consultant Paul Silvern said that City Hall has incentivized residential developments in the commercial districts by doubling density, resulting in a vacuum of creative office space for second- and third-stage companies.
“In this particular location, where you’ve got a very large piece of land and you’ve got the flexibility to develop the kind of commercial office space, or creative office space that is missing in this city, the balance tips a little differently,” he said of the Hines plot.
Mayor Pam O’Connor said that while Santa Monica might not become home to Fortune 500 company headquarters, it could stand to gain some diversity of office sizes.
“I think we want to have spaces for a range of office spaces,” she said. “We’re starting to lose companies. I don’t think we need just offices for these smaller start-up companies.”