Martin A. Brower's Along the Coast
Irvine Co. Builds on Success
Few real estate development companies have the capability to construct a high-rise office tower without a major tenant or group of tenants first signed to occupy a large portion of the building. But the Irvine Co. – with available land in strategic locations, ample financial sources and the ability to wait for a long period – is such a company. Once again, the Irvine Co. has proved its ability to take a chance with development of not one but two so-called speculative high-rise towers with amazing success.
First is the 21-story, 326,000-square-foot 520 Newport Center Drive tower in Newport Center – perhaps the choicest office location in Orange County. Completed in fall 2014, 520 Newport Center Drive is 85 percent leased with announcement of a lease of the entire 18,000-square-foot 21st floor by Tarsadia Investments, a private investment firm.
The Tarsadia lease adds to 520 Newport Center’s reputation as a prime location for financial firms, with such names as UBS Financial Services, Oppenheimer, JPMorgan Chase, BNY Capital Partners, Northern Trust, Janus Capital, Wells Fargo Advisors and Bank of America’s Merrill Lynch Private Banking as tenants.
This is no surprise, in that the Irvine Co. reports that almost half the space in the company’s 2.5 million square feet of offices in Newport Center is leased to businesses providing financial services.
The second speculative office tower is the 20-story, 426,000-square-foot 200 Spectrum Center office building in the Irvine Spectrum. Just completed, the building is already 60 percent leased.
The Irvine Spectrum is not a financial services location. The building’s major tenant, leasing a full five floors, is Mazda Motor Corp.’s North American headquarters. Two other tenants are Curse Inc., a computer game communications firm bringing employees from San Francisco and Alabama, and WeWork, offering space for small companies and startups.
So what is the Irvine Co. to do with such nearly instant success in developing speculative office buildings? No surprise – grading is already underway for the 20-story 400 Spectrum Center, a twin tower to 200. Completion is set for September 2017, and tenants are probably already lining up.
All three of the new towers were designed by New York City architects Pei Cobb Freed and partners, with the 20-story Spectrum Center buildings, at 323 feet in height, being billed as the tallest buildings in Orange County despite 520 Newport Center’s
Dana Point Steps Forward
After 15 years of my writing about the planned, and planned, and then planned again redevelopment of the Dana Point Harbor, it appears the time for redevelopment has finally arrived. At long last the county has issued a request for interested real estate development companies to provide their qualifications and ability to form a partnership with the county to revitalize the 1968-era harbor. Responses are due by June 20.
From the expected submissions, the county will select a list of developers from which to request a redevelopment proposal. The selected developer will receive a 50-year master ground lease for the 277-acre harbor and will design, permit, fund, construct, renovate and operate the harbor’s commercial core. This involves all of the current retail shop and restaurant buildings, including the Marina Inn. The commercial core and boat launch facilities will be included in phase one of the project, and the east and west marinas and guest slips will be included in phase two. Cost is estimated to range from $150 million to $200 million.
A goal for the selected developer will be to retain Dana Point Harbor’s “small town charm” while creating “a more prominent Orange County destination” and not “over-commercializing the harbor.” Offered one local resident, “We don’t want to create another Newport Beach.”
Don’t rush out to see the changes yet. The county anticipates the time required to select a developer is 18 to 24 months.
What’s Next for Banning Ranch?
At 401 acres, Banning Ranch is one of the largest undeveloped parcels of land overlooking the Pacific Ocean in Southern California, and a fierce battle has long been raging over the
Most of the once-4,100-acre ranch purchased by businessman Phineas Banning in 1874 has long been developed into Costa Mesa and parts of west Newport Beach and east Huntington Beach. The remaining 401 acres, extending inland of West Coast Highway between the Santa Ana River and Superior Avenue and in the jurisdiction of the city of Newport Beach, has operated as an oil field since oil was discovered in 1943.
Two strong forces have been tugging at the site: Newport Banning Ranch LLC, owner of the site, wants to develop a portion of the land; Banning Ranch Conservancy, a local environmentalist group, wants to purchase the land and keep the entire site forever open.
In 2012, the Newport Beach City Council approved development of 95 acres – essentially one-fourth of the land – into 1,375 homes, 75,000 square feet of retail space and a 75-room boutique hotel. The remaining 306 acres would be converted into usable open space. However, approval was also required from the California Coastal Commission. At the Coastal Commission meeting in October, the Banning Ranch Conservancy jammed the meeting, citing increased traffic and negative impact on environmentally sensitive plant and animal habitats.
Rather than deny any development, the Coastal Commission asked the land owners to go back to the drawing board to reduce the scale of development. Newport Banning Ranch scaled back to 62 acres with 895 homes, 45,000 square feet of retail and the 75-room hotel.
Next step is a return to the Coastal Commission. But alas, the commission’s executive director has been fired. As of late March, a new director had not been appointed. Environmentalists decry the firing of the executive director as being developer-inspired. The Coastal Commission’s board denies the charge. So everything is on hold – except for an advertising campaign by both sides.
A Way for Woodbridge
Residents of Irvine’s Village of Woodbridge were concerned that the Irvine Co., owner of the long-failing Woodbridge Village Center in the center of the village, would raze the 1979-era retail center and use the site for an apartment community. Some residents had already formed an opposition group called Friends of Woodbridge Village Center.
Overlooking the Village of Woodbridge’s scenic North Lake along Barranca Parkway, the retail, dining, entertainment and services center conceived by Irvine Co. planners as ideally located in the heart of the village – actually proved to be less than successful not being on a major thoroughfare. The original Vons supermarket has long been gone, as has an upscale Asian market. Smaller shops and second-story offices have been difficult to lease.
The Irvine Co. has a vision. Citing Woodbridge Village Center as “a beloved retail center,” the company plans to invest $30 million to transform the property into a viable retail complex. Re-design calls for demolishing the two-story building in the center of the complex and re-configuring the center using coastal California architecture; upgrading the retail, dining and entertaining mix; and expanding the outdoor plaza overlooking the lake to create an outdoor dining and gathering “front porch.”
The redevelopment plan calls for retaining tenants Barnes & Noble, Ruby’s Diner and Woodbridge 5 cinemas. Construction is scheduled to begin in August with completion set for the second half of 2017.
Woodbridge Village Center is one of 38 neighborhood and community retail centers owned and operated by the Irvine Co. in Irvine, Newport Beach and Tustin.