Northrop Grumman Corp. has signed a purchase and sale agreement with Irvine-based developer Sares-Regis Group for 157 acres in Pico Rivera that Majestic Realty Corp. had been vying to develop.
Terms of the agreement were not disclosed.
The property is part of Northrop’s B2 stealth bomber plant, which is winding down operations and will be vacated by the company by late September. The property, at Rosemead and Washington boulevards, served as the headquarters for the B2 program since 1982 and employed 13,000 people at its peak in the early 1990s.
Northrop now employs about 1,500 people in the B2 program, mostly in Palmdale.
Sares-Regis also owns several industrial buildings in the City of Industry. A company official declined comment on any development plans in Pico Rivera until the deal is final, because it is still at the due-diligence stage.
Majestic had already acquired a 43-acre piece of the 200-acre property from Northrop and has been developing the 856,000-square-foot Pico Rivera Business Center there. Majestic was hoping to be the master developer for the entire property and was working on a deal with Northrop to acquire the remaining 157 acres and resell about 55 acres to Vestar Development Co. for a retail development.
Majestic officials said last spring that they thought they had an agreement with Northrop, but Northrop said there was no such deal. Sources said negotiations between the two broke down when Northrop raised its asking price. The transaction with Sares-Regis is expected to be completed this year.
“Northrop Grumman has kept its commitment to the city of Pico Rivera to sign a purchase and sale agreement with a qualified developer capable of developing the property in a timely, responsive and responsible manner,” Scott J. Seymour, vice president of air combat systems for Northrop’s integrated systems sector, said in an statement. “This event presents a tremendous opportunity for the city to move forward with its economic development plans.”
El Segundo Development
With the South Bay and LAX-area market on a roll, Overton, Moore & Associates plans to build a $30 million office project in El Segundo.
Overton Moore and its financial partner Pacific Coast Capital Partners just bought 9.2 acres of entitled land from the Los Angeles Economic Development Corp. for about $7 million. The site sits at South La Cienega Boulevard and Pacific Concourse Drive, just south of the Century (105) Freeway and near a new courthouse.
The partners plan to build a 170,000-square-foot, two-story office building, designed by Nadel Architects. The complex, to be called Cross Pointe, will have two wings, one of 94,000 square feet and one of 76,000 square feet, connected by a two-story glass atrium.
It will feature large floor plates, 15-foot slab-to-slab clearance, redundant power, diesel generators, high-strength floors and fiber-optic availability, said Timur Tecimer, president of OMA. He said the complex will target a wide range of user types, from high-tech to multimedia to telecommunications tenants.
“We feel the building will be very well positioned in the market and provide flexibility to tenants, who will come from the Westside and South Bay,” Tecimer said.
OMA hopes to break ground in December and complete the project in August 2001.
Steve Solomon, Craig Meyer and David Drummond of Colliers Seeley represented both sides in the deal and are charged with leasing the project.
Pasadena Deal
After an extended escrow and massive red tape, the sale of King’s Village Apartments has finally closed.
Fresno-based Affordable Housing Development Corp. and its partner, New York-based Related Cos., purchased the 317-unit affordable housing complex for $25 million. The seller was a partnership headed by general partner Thomas Pottmeyer.
The sales deal was drawn out because of a number of bureaucratic delays. Both the U.S. Department of Housing and Urban Development and the city of Pasadena need to approve the sale. Also, the buyer obtained state bonds worth $20 million for the acquisition, which was an arduous process.
Robin Ossenbeck of Marcus & Millichap, who represented the seller, said the bureaucratic hurdles were very frustrating, especially given the shortage of affordable housing in the region.
“When you make it so difficult to acquire, operate and maintain affordable housing, why would someone do it?” she said. “Affordable-housing companies are hindered dramatically because agencies make it so tough.”
At one point, another buyer emerged who had been willing to pay more, and wanted to convert the complex from restricted rents to market rate.
“This deal was so close to losing affordability. Once it’s gone, it never goes back (to affordable units),” Ossenbeck said. “Those rents would have easily doubled if it had gone to market (levels).”
Seth Polen of M & M; also represented the seller.
Playa Deal?
Playa Capital Co. has selected Hines to enter into exclusive negotiations to purchase a 6.5-acre parcel at Lincoln and Jefferson boulevards in Playa Vista for just under $30 million, sources said. The two sides are putting together a purchase and sales agreement.
About 426,000 square feet of low-rise office space could be built there. Hines is said to be looking at building multiple structures around an open plaza. Cushman Realty Corp. has been marketing the parcel and attracted about 10 serious bids, which were narrowed to three Hines, Legacy Partners and Tishman Speyer Properties.
The sale is far from a done deal, however. Opposing it is developer Robert Maguire, who is charged with developing the commercial portion of Playa Vista.
Maguire and Playa Capital are in the midst of arbitration, which has been postponed until October. It is geared in part to resolve Maguire’s rights regarding parcels up for sale in Playa Vista’s commercial portion. He contends he has the right to buy any parcel on the block as long as he can match any competing offer.
Elizabeth Hayes can be reached at (323) 549-5225, ext. 229, or at [email protected].
