Irvine Company is starting to put its fingerprints on Pacific Arts Plaza, the Costa Mesa office and restaurant campus it bought nearly a year ago.
A multimillion-dollar renovation is under way with landscaping and other work on the 18-acre site, which runs along Anton Boulevard near the Segerstrom Center for the Arts.
Interior work also is being done to some of the four office buildings at the plaza, home to high-profile tenants including law firm Rutan & Tucker LLP and Hyundai Motor America Inc.
The Newport Beach-based developer also is considering expansion plans. A proposal to add a three-story, 350-space parking structure to the campus recently received city approval and could move ahead soon.
Irvine Co. is still considering building an 18-story office tower at the complex, although a timeframe for the project has yet to be determined, according to the developer.
The renovation work at Pacific Arts Plaza looks to be the biggest office-related construction project under way right now for Irvine Co.—Orange County’s largest landlord—outside of a new tower it’s building in Newport Center for money manager Pacific Investment Management Co.
The remodeling efforts should add glitz to the Costa Mesa complex, which competes for tenants in the city’s South Coast office market against high-end buildings run by locally based C.J. Segerstrom & Sons, among others.
Monthly rents at Pacific Arts Plaza run in the $2 to $2.35-per-square-foot range, according to CoStar Group Inc. data. That’s in line with other high-end offices in the South Coast office market, according to brokers.
827,000 SF
Irvine Co. reportedly paid $213 million last year for the 827,000-square-foot complex, which also includes several restaurants.
The buildings were previously owned by Los Angeles-based MPG Office Trust Inc. The plaza was sold by a court-appointed receiver after MPG predecessor Maguire Properties Inc. defaulted on loans tied to the property.
At the time of purchase, Irvine Co. executives said they planned to upgrade the property this year with improvements to on-site amenities, enhanced common areas and upgrading operating systems.
Much of that work, especially landscaping efforts such as adding dozens of palm trees, as well as other exterior work, appears to have ramped up over the past month, turning the complex into an active construction area.
More work could be under way soon. In October the city of Costa Mesa’s planning commission signed off on plans to add a new parking structure at the campus.
The new structure, which will hold a little more than 350 spaces, is needed to handle existing and potential new tenants, according to Irvine Co. planning officials.
Since buying the complex, Irvine Co. has signed Hyundai to a short-term lease of nearly 150,000 square feet while its new North American headquarters complex in Fountain Valley is built, and inked a deal with legal software company Morgan Drexen Inc. for another 65,000 square feet.
The 785,000 square feet of office space at the complex is now about 90% full.
The new parking garage is described by planning officials as an “interim” structure, which is slated to go up on a portion of the campus that’s next to the San Diego (405) Freeway. The parcel has been eyed for nearly a decade as a potential 18-story, 400,000-square-foot office.
The interim parking structure would have to be knocked down to make way for that office, which makes the potential of the 18-story office being built in the next few years unlikely at best.
City OK
Irvine Co. recently got planning commission approval for a two-year extension for development rights to build the office, which would come with a five-story parking garage. The extension runs through mid-2013.
The developer will likely seek to get additional extensions beyond that date.
“Given the current down economy, (there is) minimal expectation that this major development project will occur within the next two years,” according to Irvine Co.’s application with the city, which was approved in mid-October.
Irvine Co. has given no indication that it’s looking at other uses for the site, such as apartments or other condominiums.
City officials said the move to grant an extension for the office tower is similar in nature to what the city has done for other high-rise projects—primarily condominium developments—in the arts district that borders South Coast Plaza. Several such projects were proposed during the last housing boom but shelved during the downturn.
“We’re all sitting on our thumbs waiting for this economy to turn around,” Planning Commission Chairman Colin McCarthy said during an October hearing on the Irvine Co. office extension and new parking structure.
Tear-Down?
If the office market does turn around enough to warrant new office development, Irvine Co. is likely one of the few companies with the financial strength to tear down a just-built parking structure, other city planning commissioners noted.
“Nobody spends money like the Irvine Company,” said Costa Mesa Planning Commission member Jim Fitzpatrick.
