After sitting essentially idle for nearly two decades, a project to transform Rand’s 15-acre ocean view headquarters property in Santa Monica into a major office and residential park is suddenly and rapidly moving forward.

The public policy research institute has contemplated its project several times, but Rand’s financial fortunes and the real estate development cycle never seemed to be in sync. Until now.

“Some people would probably categorize the Rand development as a project that’s permanently on paper,” said Iao Katagiri, Rand’s deputy vice president and project manager for development. “But now is the time. We finally have the opportunity to do it.”

Rand has whittled down its list of prospective developers, and Katagiri said the institution’s choice will be announced in late November.

San Francisco-based Catellus Development Corp. and Houston-based Hines Interests LP are rumored to be the frontrunners for the project, but Katagiri said Rand is considering several developers “with a track record in large mixed-use projects and a familiarity with Santa Monica.”

Rand plans to turn its property into an office, retail and residential village. One major component would be a new headquarters facility to replace Rand’s existing 55-year-old headquarters, but additional for-lease office space is also planned. The asphalt surface parking lots that currently occupy much of the site would be replaced with underground parking, and pedestrian pathways and landscaping would grow in its place.

Rand’s “urban village” is envisioned as being an integral component of the recent revitalization of downtown Santa Monica, linking the city’s bustling Third Street Promenade shopping district with its revitalized Main Street retail corridor. Those two vibrant areas are currently separated by a pedestrian-unfriendly, decades-old Civic Center area that consists of city and county government buildings, the Santa Monica Civic Auditorium and Rand.

“It would be a dream come true to see that (Rand) property developed,” said Suzanne Frick, Santa Monica’s planning director who has heard talk of the project ever since she came to the city 13 years ago. “This is the furthest progress that I’ve ever seen them make.”

Colin Shepherd, a locally based senior vice president at the development company Hines Interests LP, said the mixed-use project has potential to further the city’s efforts to create a more pedestrian-friendly, neighborhood feel in the Civic Center area.

“It has great interaction with the ocean and the downtown,” he said.

Formal plans for the redevelopment of the Civic Center have been in place since city’s voters approved the Civic Center Specific Plan in 1993. Rand owns the portion of the 45-acre Civic Center area that stretches west of Main Street, while the city and Los Angeles County jointly own the rest.

Rand first began toying with the idea of developing its site in the 1970s, but dropped the idea when its workload diminished as several major consulting contracts ended. It revisited the project in the late-1980s and even went so far as to issue a request for development proposals but abandoned it again when the recession hit.

Rand joined the city in the early ’90s in creating the Civic Center Specific Plan, but Katagiri said it only went along because it’s a major property owner in the Civic Center, and Rand wanted to establish zoning requirements for when it eventually did decide to begin the project not because it intended to develop its property during the depths of the real estate recession.

But now, Rand employs far more people than it can accommodate in its 300,000-square-foot headquarters facility, which is why it houses many in a subleased off-site space. Besides the need for a bigger headquarters, another factor driving the project forward is that the real estate market in Santa Monica is booming.

Interest in the project began again last March, when a developer called the public policy think tank to inquire about the project. That triggered additional calls from other developers, leaving the institution with about three dozen unsolicited proposals to sift through as of last week.

“Since that call, it’s been like night and day,” Katagiri said. “We’ve been having non-stop conversations and correspondence with developers ever since.”

To the real estate community, the development site in the heart of Santa Monica is a hot commodity. The city’s office market has become increasingly tight as more entertainment companies have migrated toward the ocean, causing office rents to jump as much as 20 percent for some tenants this year.

“It’s where all the companies want to be these days,” said David Thurman, senior vice president of Westmac Commercial Brokerage Co.

But larger corporations are finding it difficult to move to Santa Monica because most of the city’s office buildings have small floor plates. That makes the Rand project especially attractive because it would put large blocks of contiguous space on the market.

“They have the potential to create a campus environment down by the ocean and that concept has been very successful on the Westside,” said Bob Safai, a partner with Madison Partners. In addition, the site offers unprecedented ocean views, is within walking distance from the Third Street Promenade and Main Street shopping districts and is located just off the Santa Monica Freeway and Pacific Coast Highway.

Even with all those advantages, the project’s success might ultimately depend on how fast the office component can be completed.

Timing can be as paramount as location in the world of real estate, and the think tank has a history of being maddeningly deliberate in its decision making. Furthermore, Rand’s property isn’t the only site that developers are pursuing in Santa Monica.

“With all the Wall Street money out there, all of a sudden the faucet’s been turned on full blast every eligible site on the Westside is going to have a project chasing it,” said Gerald Porter, president of Metrospace Corp., a commercial brokerage firm. “The first half dozen out of the ground will be home runs,” he said, but later projects will not be as assured of success.

Lowe Enterprises is expected break ground on its 133,000-square-foot Arboretum Courtyard office project by the end of the month. Speiker Properties’ Gateway Arboretum office building and the second phase of J.H. Snyder Co.’s Water Garden office complex are slated to break ground later this year, and several other proposed projects are “in the conceptual stage,” Frick said.

If the Rand project were to start the entitlement process by the end of this year, the soonest it could break ground would be early 1999, Frick said.

Katagiri acknowledged that developers have been “a little impatient with us they’re frustrated with how careful we’re being.” But she added that Rand won’t be rushed into development.

“We’re not in real estate and we don’t want to be,” she said. “We just happen to own this land. It’s our principal financial asset, and we want to develop it right. It’s a one-shot deal for us.”

As a non-profit, Rand needs an outside developer to fund the project. The project agreement might include selling the land to a developer, with Rand leasing back its new headquarters, although that’s all subject to negotiations, Katagiri said.

Detailed plans for the project won’t take shape until Rand selects a developer, although the city’s specific plan provides for 300,000 square feet of residential and 800,000 square feet of office and retail use on the site. The specific plan also stipulates that the parking be underground. Katagiri said the project will be built in multiple phases, including one that will be a replacement for Rand’s 45-year-old headquarters.

As for the city-county properties in the Civic Center, Santa Monica and the county had initially planned to undertake improvements that included expanding the county courthouse and building another parking structure. Those projects were slated to occur in conjunction with construction on the Rand site. But Frick said the timing of the county-owned projects will now be contingent on securing funding, which the county lacks.

For now, the city is moving forward with construction of a new Public Safety Building behind City Hall and is building a new street, to be called Olympic Drive, that will connect Main Street to Fourth Avenue. Once the Rand site is developed, Olympic Drive will ultimately be extended from Main Street to Ocean Drive, Frick said.