California Resources Corp., the new and homeless spinoff from Occidental Petroleum Corp., is beefing up its presence in Long Beach, a move city officials hope will lead to the oil producer siting its headquarters there.

The company this summer expanded its lease at a downtown Long Beach office tower and plans to move into the additional space next month.

A California Resources spokeswoman said the building will serve as the base for the company’s southern operations.

Long Beach officials said they have been told the building will serve as an interim headquarters while the company searches for a permanent home. Those officials say they hope to keep the company in Long Beach for good.

“Long Beach will be doing the best it can to make this the permanent headquarters for California Resources Corp.,” said Michael Conway, the city’s director of economic and property development. “We will lay out the red carpet and welcome them.”

But Long Beach is not alone. Los Angeles, Santa Clarita and Bakersfield are also trying to lure California Resources in one of the more intense battles for a corporate headquarters location in recent years.

After all, once the spinoff from Occidental is completed late this year or early next, California Resources will rank among the 10 largest public companies in Los Angeles County. It will be the state’s largest natural gas producer and second-largest oil company; Chevron Corp. of San Ramon is the largest.

According to figures released by Occidental in February, the California operations that will be run by the spinoff had 8,000 employees and contractors statewide and earnings before interest, taxes, depreciation and amortization of about $2.6 billion.

Long Beach consolidation

For now, California Resources’ official headquarters is the same Westwood office tower that was home to Occidental for the past several decades.

But sources in Westwood say that building, at the corner of Wilshire and Westwood boulevards, is now virtually empty. Last month, the company acknowledged that it had put the building up for sale, with a complete move-out set for the second quarter of next year.

Meanwhile, in Long Beach, California Resources has added space in downtown’s Landmark Square building at 111 West Ocean Blvd., a building where Occidental already occupied 60,000 square feet.

Long Beach real estate brokers say California Resources this summer negotiated for additional space – between 30,000 square feet and 40,000 square feet. That’s enough space for at least 100 additional employees. The leases for all of the office space will expire in about four years, brokers said.

Pricing of the lease was not disclosed, but asking rents for Class A office space in downtown Long Beach averaged $2.33 a square foot a month.

California Resources spokeswoman Margita Thompson said the extra space is part of a consolidation of the company’s Long Beach offices and will serve as the company’s southern operations base. The company operates several wells around the city, including the oil islands off the Long Beach coast, and is seeking approval for a new drilling project in nearby Carson.

But Conway, the Long Beach economic development official, said he’s had discussions with company executives, including President Todd Stevens. The executives indicated that the Long Beach tower would serve as an interim corporate headquarters while California Resources decides where it will site its permanent headquarters.

“We hope that if they are using the site as an interim headquarters, they will see the advantages and decide to stay here for the long term,” Conway said. “We will accommodate them with permitting, any issues regarding fracking and any workforce support.”

When he first talked with Stevens this past spring, Conway said that Santa Clarita was rumored to be the frontrunner in California Resources’ headquarters search. Another source at one of the other cities vying for the headquarters said the same.

Santa Clarita’s main advantage is its location: It’s halfway between the amenities of the L.A. metro area and the oil fields west of Bakersfield, home to most of the Occidental operations California Resources will inherit.

Jason Crawford, manager of economic development and marketing for Santa Clarita, welcomed the company’s interest in his city.

“We would love to see them choose Santa Clarita for their headquarters location,” Crawford said. “There are many financial advantages to locating a business in Santa Clarita, as we do not assess a gross receipts tax, a payroll tax, a utility user tax, nor do we require business licenses.”   

But Crawford would not say whether he or anyone else at the city had met or spoken with California Resources executives. Nor did he say whether the city had offered any assistance, such as lists of buildings with available space or fast-tracking any required permits.

Los Angeles, of course, lost Occidental to Houston and stands to be the loser if it cannot keep the new California Resources’ corporate headquarters as a consolation prize.

The city has offered CRC lists of buildings with significant available space, according to Jeff Millman, spokesman for Mayor Eric Garcetti.

“We will work with the company to quickly get the permits and approvals needed to start operations in the city,” Millman said.

Oil patch locale?

And then there’s Bakersfield. While not known as a corporate headquarters town, Bakersfield’s main selling point is its proximity to the vast majority of California Resources’ operations. Between 70 percent and 80 percent of the company’s revenues come from oil fields at Elk Hills and other sites in the southwestern San Joaquin Valley, about 30 miles west of Bakersfield.

The company already has office space in Bakersfield, especially near the California State University Bakersfield campus.

But the office market is a drawback. Space is cheaper in Bakersfield than in Los Angeles, Long Beach or Santa Clarita, but there’s not much of it.

Mark Smith, a broker with Newmark Grubb ASU & Associates in Bakersfield, said the citywide vacancy rate for office space is less than 9 percent, about half the rates seen in Los Angeles. And in the office buildings around the university campus, the vacancy rate is between 2 percent and 3 percent.

“It’s not easy to find significant blocks of space there,” Smith said. “If they want to locate there, they might have to build their own space.”

Doug McIsaac, community development director for Bakersfield, said that if California Resources wants to locate its headquarters there, enough space can be cobbled together.

McIsaac said last week that the city sent a four-page letter to California Resources’ Stevens, making the case for Bakersfield as a headquarters location.

“Bakersfield is most definitely interested in being the new home for their corporation,” McIsaac told the Business Journal.