Donald Trump might consider an apprenticeship with Suncal Cos. After all, the Orange County homebuilder out-maneuvered the tough-talking New Yorker for a key Century City parcel.
In one of the highest prices ever paid for L.A. land, Irvine-based Suncal is buying a 2.25-acre site at 10000 Santa Monica Blvd. for $110.2 million or $1,124 a foot.
Similar to homebuilders such as KB Home and Lennar Corp., privately held Suncal is swiftly moving into building high-rise residences in response to soaring housing demand and a land shortage.
“We haven’t developed a final plan, but the project will likely be a high-rise condominium,” said Frank Faye, Suncal’s regional president. “We’ll seek the input of stakeholders like the neighbors, the community and the city before we submit an application.”
Trump had aligned himself with Related Cos. in bidding for the property, which was being sold through a contentious Chapter 11 bankruptcy auction that involved several of the region’s biggest names.
The demolition of the office building on the site designed by noted L.A. architect Welton Becket to be his firm’s headquarters sparked a flurry of litigation that ended with the owner, 10000 Millenium Plaza LLC, an investment group led by developer Larry Taylor, declaring bankruptcy.
Taylor, a developer known for hard-nosed tactics, decided to raze the structure a five-story building once home to tony restaurant Jimmy’s in advance of getting city approval for a high-rise residential project.
However, a dispute arose with billionaire Donald Sterling who claims to own a stake in the building. A lawsuit stemming from the conflict was eventually heard by the state Supreme Court. The bankruptcy court judge ruled Sterling’s interest in the property ends with the sale and he’ll have to collect money from Taylor afterward.
“This is the first time a court formally ruled the property could move to a buyer and Sterling’s claims wouldn’t follow,” said Robert Moore, a partner at Milbank Tweed Hadley & McCloy LLP, which ran the auction process. “Sterling’s claims will be attached to the proceeds of sale.”
Steep price
Trump’s inability to buy 10000 Santa Monica Blvd. is another in a string of his firm’s unsuccessful attempts to develop a high-rise project in L.A. County.
A few years ago, the brash developer and host of NBC’s “The Apprentice” lost out on buying the Robinsons-May property in Beverly Hills, where local developer New Pacific Realty has proposed building a $500 million high-end residential project. (The Robinsons-May property is across Santa Monica Boulevard from the site Suncal is buying.)
Trump’s company, which owns a Rancho Palos Verdes golf course, has been bidding on parcels from downtown to the Westside. While unsuccessful in L.A., Trump’s firm has been successful securing high-profile sites in Toronto, Chicago and Philadelphia for luxury condominium projects.
During the bankruptcy auction process, Trump formed a relationship with New York-based Related Cos. to buy the site once the price had risen to just over $100 million. Related Cos., which built the Time Warner center in New York, remains very active in Los Angeles. The developer is tearing down the St. Regis hotel in Century City to build a condo high-rise and is heading-up the $1.8 billion redevelopment of Grand Avenue.
However, after three days of a raucous and heated bidding process, Suncal prevailed by bidding $200,000 more than the Trump/Related partnership, which ended bidding at $110 million. Recently, only billionaire Larry Ellison, chief executive of Oracle Corp., paid more for L.A. County land when he purchased a shuttered Malibu restaurant two years ago for $1,850 a foot. He is building another restaurant in its place.
In addition to Related Cos.’ plans to build a 147-unit condo tower at the St. Regis site and a likely Suncal high-rise, Century City is facing several other large projects.
Westfield of America Inc., owner of the Century City mall, has announced a $500 million project to expand the shopping center and build a 42-story tower containing 260 condos.
And Chicago-based JMB Realty Corp., which has developed a number of Century City’s skyscrapers, is planning twin 47-story condominium towers that could contain nearly 500 units.
All the development activity has stirred-up community groups and homeowners associations in L.A. and Beverly Hills, which are worried about traffic and other environmental impacts from the high-rise projects.
Still, even though Suncal paid a high price for the property, Faye believes the parcel is an excellent investment. “We think it’s a jewel,” Faye said. “That is probably the most exciting piece of property in California. It’s a great location, in a great neighborhood and its surroundings are spectacular all reasons that made it an exciting auction opportunity.”
