Citibank Relocates
Through one of the larger downtown L.A. leases in recent months, Citibank has decided to relocate its downtown operations center from the highrise now known as Citicorp Center to 69,295 square feet of offices at the nearby tower at 444 S. Flower St. which will be renamed Citibank Center and feature Citibank’s logo atop the building.
No financial details were disclosed in connection with the 15-year lease transaction.
The downtown offices of Citibank, the principal subsidiary of New York banking giant Citicorp, had actually been located at the 444 Flower building before the company leased about 185,000 square feet back when Citicorp Center was being developed in the 1980s.
Through Cushman Realty Corp., the bank is trying to sublease some 160,000 square feet of offices at Citicorp Center for three years a deal potentially includes building-top signage.
Cushman Realty’s Brian Ulf and Ted Simpson oversaw Citibank’s relocation search and lease negotiations. Trammell Crow Co.’s Joe Faulkner and Jonathan Larsen negotiated on behalf of the 444 Flower tower’s ownership, a partnership of Meijiseimei Realty Of America Inc. and Pacific Freeholds.
Thrift Takeover Update
Fighting a hostile takeover from H.F. Ahmanson & Co., Great Western Financial Corp. last week reaffirmed intentions to merge with Seattle-based Washington Mutual.
Ahmanson first went to Great Western shareholders with a $6.89 billion stock bid in February. Later that month, Washington Mutual made a competing $6.95 billion bid to merge with Great Western.
Great Western board members say they support a merger with Washington Mutual. Stockholders will meet June 13 to vote on the offer.
In the meantime, Ahmanson has asked the Securities and Exchange Commission to allow it to execute a stock swap with Great Western. Despite the move, Great Western officials say the SEC decision will not affect their decision to proceed with the Washington Mutual deal.
Irwindale-based Ahmanson, the largest U.S. thrift, has continually bested Washington Mutual’s offer. But, despite Great Western board’s support of the Washington Mutual deal, it will ultimately be up to stockholders as to which deal to accept.
Insurance Deal
Fremont General Corp. announced it will buy San Francisco-based Industrial Indemnity Holdings for $444 million in cash, while also assuming the company’s debt.
The acquisition would bolster Santa Monica-based Fremont’s status as one of the nation’s largest workers’ compensation insurers. The purchase of Industrial Indemnity is expected to solidify Fremont’s business in the Western United States.
Industrial Indemnity is owned by Talegen Holdings Inc., a subsidiary of Xerox Corp. The pending purchase is expected to boost Fremont’s total revenue by 41 percent to an estimated $1.2 billion next year, according to a company official.
The transaction is subject to regulatory approvals, and is expected to be complete by the end of the year. Once the deal is approved, Fremont will have access to states it currently doesn’t have a presence in including Alaska, Texas and Utah.
The sale of Industrial Indemnity is part of Xerox’s plan to get out of the insurance and financial services sectors so it can concentrate on office machines.
Playa Ruling
A State Court of Appeals backed a previous ruling to dismiss a legal challenge over environmental issues that threatened the Playa Vista development in Marina del Rey.
The 1996 lawsuit filed by the Earth Trust Foundation and other groups claimed that the project failed to receive proper state environmental reviews. A Los Angeles Superior Court judge sided with developer Maguire Thomas Partners last July, after which the case was appealed.
Meanwhile, environmentalists are still waiting on another case filed in opposition to the Playa Vista project slated to be the home of DreamWorks SKG studios.
The federal lawsuit filed last December maintains that government engineers didn’t fully study how the project would impact the wetlands. The case is expected to be heard this summer.
Ticketmaster Sale
Billionaire Paul G. Allen agreed last week to relinquish his 47.5-percent stake in Los Angeles-based Ticketmaster Group Inc. to HSN Inc. in a stock swap deal valued at $210 million.
Allen, who held the title of chairman at Ticketmaster, is essentially transferring his ownership of Ticketmaster into an equity ownership in HSN, a company that owns the Home Shopping Network and that is controlled by Barry Diller.
The deal would enable both companies to merge accounting departments but at the same time remain separate companies.
The stock swap would transform the companies into a sales powerhouse combining Ticketmaster’s phone banks and locations with HSN’s cable television presence. Last year, both companies sold about $2.5 billion worth of merchandise via telephone and the Internet.
The transaction calls for Allen to get an 11 percent stake in HSN in exchange for his 12.3 million Ticketmaster shares.
In addition, Allen, his aide Bill Savoy and Ticketmaster President and Chief Executive Fred Rosen will join HSN’s board. The boards of both companies approved the deal last week, and the swap is expected to take place before July.
Kajima Project
Los Angeles city and some school district officials are voicing objections to costs involved with constructing the Belmont Learning Center in downtown Los Angeles.
The Los Angeles Unified School District has already contracted with Kajima Corp. to build the new high school. However, lawyers for the district now say the $87 million estimate can grow if the project is delayed by environmental problems.
In addition, a lawsuit sponsored by tax groups contends the project is illegal and should not be paid for with bond money. A judge has already ruled that construction can only begin if the project gets approval from the Proposition BB Blue Ribbon Citizens Oversight Committee, which regulates bond money for educational projects.
By Joe Bel Bruno, Douglas Young and Brad Berton
