American Sporting Goods Corp., a maker of basketball and other sports shoes, is the latest Irvine company to face relocation because of plans to build homes in the John Wayne Airport area.
That’s just half the problem. There aren’t many other places for the company to go locally.
The issue comes as American Sporting Goods is looking for a buyer. The company, which counts estimated yearly sales of $300 million, has hired Wachovia Securities to work on a possible sale, Chief Executive Kevin Wulff recently told industry publication Footwear News.
“We anticipate the process and sale will be completed sometime in December,” Wulff said. “Interest has been high. I think that is the right amount of time to do this. Then we can get back to focusing on making shoes.”
Chairman Jerry Turner owns the bulk of American Sporting Goods. Wulff, a former Nike Inc. executive, came on last year and owns a stake in the company.
American Sporting Goods came close to selling to a private equity group last year. A sale likely is aimed at giving Turner, who’s in his 70s, a way to cash out.
Inland Move
On the real estate front, American Sporting Goods is preparing to move a big chunk of its operations to the Inland Empire.
The company just signed a five-year lease in Fontana for a new warehouse. The 320,000-square-foot building is set to replace two others the company has in Orange County.
“We’ve got 50 containers of shoes ready to go,” Turner said. “We’re just waiting for the keys (to the new facility).”
American Sporting Goods plans to keep its headquarters here, according to Turner.
Of course, it’s unclear what would happen to the headquarters under a sale. Things likely would stay the same under a private equity owner. Another shoe and apparel maker could consolidate American Sporting Goods’ offices.
The 250,000-square-foot Irvine building that long has housed American Sporting Goods’ primary operations is slated for nearly 450 condominiums.
Irvine-based homebuilder Standard Pacific Corp. plans to build five condo buildings on the 10-acre site at the corner of Main Street and Von Karman Avenue.
The condos, at 2323 Main St., were approved by the city last week, despite objections from Newport Beach officials who question the development’s impact on the area’s traffic, among other concerns.
American Sporting Goods’ lease for a second, 100,000-square-foot warehouse in Anaheim is nearly up. The owner of the building at 300 E. Orangethorpe Ave. wants to bring in a different tenant.
Workers Offered Jobs
The Fontana move is set to be made during the next three months or so. About 120 jobs are moving to the Inland Empire. OC workers are being given the chance to make the move, Turner said.
The Fontana lease is valued at $7.7 million. Sares-Regis Group Inc. of Irvine owns the building in the Sierra Business Park.
Scott Read, senior vice president in the Newport Beach-based office of Grubb & Ellis Co., represented American Sporting Goods in the lease. Mike Wolfe and Joe McKay, a broker with the Ontario office of Lee & Associates Commercial Real Estate Services Inc., represented Sares-Regis.
Roughly 100 people work in the office side of American Sporting Goods, which last year made the biggest deal in the company’s history.
In spring 2005, American Sporting Goods bought And 1, a Paoli, Pa.-based basketball shoemaker that counts more than 80 NBA players who wear its gear under sponsorship deals. And 1 nearly doubled the size of the company.
American Sporting Goods ranks as one of the country’s top 10 sports shoemakers, according to the National Sporting Goods Association. Besides And 1, its brands include Avia and Ryka. The shoes are made at a plant in Shanghai.
The company hasn’t determined where to move its offices. The preference is to stay in Irvine, Turner said.
Wanted to Stay
American Sporting Goods would have liked to have kept its warehouse operations local, Turner said.
“It wasn’t a question of cost,” he said. “There just wasn’t enough space locally. There aren’t many (larger) facilities available.”
Redevelopment around John Wayne Airport with condos and shops is putting an increasing number of local businesses in a similar position.
Costa Mesa-based surfwear maker Hurley International LLC, a Nike unit, has an 85,000-square-foot warehouse near the San Diego (I-405) Freeway that Los Angeles-based homebuilder KB Home wants to redevelop.
Also, along Campus Drive, medical testing company US Labs, landscape architects EDAW Inc. and art supply store Sterling Art could find themselves out of space if redevelopment plans for their land move forward.
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Irvine Tower In Works, Offices,Not Condos
Another Irvine industrial building has been sold for redevelopment,only this time it’s likely to be for office space, not condominiums.
The Orange County office of Houston-based developer Hines Interests LP closed last week on a deal to buy a 6.25-acre site at 18582 Teller Ave., according to Douglas Holte, director of OC and San Diego operations for Hines.
Terms of the deal weren’t disclosed.
Cisco-Linksys LLC, a unit of Cisco Systems Inc., rents the 120,300-square-foot building at the site, which is owned by Connecticut General Life Insurance Co., according to CoStar Group Inc.
The lease for Linksys, a maker of home networking routers and other gear, runs through early 2008. The Cisco-Linksys unit also has 50,000 square feet of space at University Research Park in Irvine.
Redevelopment plans for the Linksys property still are in the early stage, Holte said. Unlike much of the condo construction plans in the works around John Wayne Airport, Hines is considering “office-dominant” redevelopment, he said.
There are more than 40 housing projects totaling about 15,000 homes planned for the area near the airport, long known for its offices, plants and warehouses.
The Linksys building deal is the second foray into the OC market for Hines, a global developer known for skyscrapers and other big commercial developments.
Its other local deal is the construction of one of OC’s first office towers in recent years.
Hines and Fort Worth, Texas-based development partner Crescent Real Estate Equities Co. just finished putting up the steel for a 12-story, 265,000-square-foot office building at 2211 Michelson Drive.
,Mark Mueller
