Calvary Chapel Buys Spectrum Building That Couldn’t Attract Tech Tenants
The Irvine Spectrum has landed a new occupant and it’s not some flashy technology company moving into Orange County’s tech mecca.
It does, however, have what many consider a big-name backer.
Calvary Chapel of Laguna Beach, a nondenominational Christian ministry, has acquired the 25,026-square-foot research and development building at 45 Tesla Way in the Irvine Spectrum for $4.25 million, or $170 per square foot.
Calvary Chapel plans to move into the Spectrum within 90 days, after improvements are made to the building.
“They bought it as a shell,” said Dave Kluver, a broker with the Newport Beach office of Grubb & Ellis Co. who represented Calvary Chapel. “They are adding classrooms, space for office and administrative needs and a large sanctuary where the warehouse would have been.”
The sanctuary will seat 700.
According to Scott Peotter, an architect and consultant specializing in conditional use entitlements, Calvary Chapel is not alone. Little more than a stone’s throw away, Bethel Korean Church already is up. And Seagate Church has closed escrow in the tech park,no relation to Seagate Technology Inc., if you’re wondering.
Churches are finding a home in the Spectrum for a reason, according to Peotter, who is with Irvine-based JBA-ASLAN Cos.
“One of the main concerns with having a church in a neighborhood or in a business district is with the parking,” Peotter said.
So, many churches are finding homes in industrial and business parks, where there is plenty of parking available, especially in the evenings and on weekends, which are the busiest times for most churches.
But Calvary’s arrival is a sign of the times in the Spectrum. Two years, demand for space from tech companies likely would have muscled out the church or any other type of prospective occupant. But with the dot-com bust and tech meltdown, flex-tech buildings similar to the one Calvary is going into are sitting empty across the Spectrum and other parts of the county.
As such, Calvary’s move is something of a godsend for Irvine-based developer Charna Associates. The company bought 1.65 acres of undeveloped Irvine Spectrum property last year with the idea of developing two 25,000-square-foot flex buildings.
Charna and CompuCable Manufacturing Group, a seller of cable and printing accessories, would occupy one building and Charna would market the second building to tech companies.
But while Charna and CompuCable have taken up their space, the developer found few prospects from within the Spectrum’s preferred tenant mix: tech companies.
“With the tech slowdown, things didn’t materialize and there was little demand for the other building,” said Chris Bates, a broker the Newport Beach office of CB Richard Ellis Services Inc. Bates and fellow CB brokers Jon Marchiorlatti and David Bolt represented Charna in the deal.
Meanwhile, Calvary Chapel of Laguna Beach was looking for a permanent place to worship. The ministry has made do by renting the auditorium at Laguna Beach High School. Kluver of Grubb & Ellis, acting on the church’s behalf, contacted Charna’s brokers.
But pitching a religious institution in the Spectrum is a tough, two-fold sales job.
First, because the land is not zoned for religious use, Calvary had to go to the city for a conditional use permit.
Then, Kluver said, “there’s a process you have to work through with The Irvine Company.”
The company, through deed restrictions on the Spectrum property it sells, maintains a say in who may and may not subsequently buy into the area.
So, Kluver said, the church also had to go through an “informal process” with the Irvine Co. that involved polling at least five adjacent property owners and getting them to sign an acknowledgement backing the church as a neighbor.
The biggest holdup in the approval process was the city’s concerns about parking.
“The critical aspect to working the deal was in reaching a reciprocal parking agreement,” Kluver said.
Charna’s buildings each have a parking ratio of four spaces per 1,000 square feet of floor space.
“That alone wouldn’t cut it” for the building to be used as a church, Kluver said.
So, Charna and Calvary Chapel agreed to share the parking spaces at the other building on the site, with Charna allowing the church to use the additional 95 parking spaces on Sundays and during certain off hours. That gave the church seven spaces per 1,000 square feet and satisfied the city’s requirements.
“(Charna) was motivated to sell and we needed his parking,” Kluver said. “It fit like a glove.” n
