To get an idea of how much the Irvine Spectrum has changed over the years, just ask Vasken Kassarjian.
His Don De Cristo Concrete Accessories Inc. had been in the Irvine Spectrum for 20 years. But increasingly, the blue-collar maker of construction products felt out of place in the high-tech business park.
So last week the company moved from Irvine to Westminster where it’s taking up 100,000 square feet of space in a facility more than double the size of its Spectrum digs,for the same cost.
“The Irvine Spectrum used to be called the Irvine Industrial Park,” said Kassarjian, the company’s vice president. “For what we do, Irvine is becoming too expensive.”
De Cristo makes scaffolding, hard hats and other construction-related gear. One of the hard hats it sells,produced by sister company KD Plastics in Gardena,comes in the shape of a cowboy hat. Most of Don De Cristo’s Spectrum neighbors, such as Broadcom Corp. and Quest Software Inc., were technol-ogy companies.
“If you’re a high-tech computer company and you’re selling in the hundreds of millions of dollars of product in this space, that’s one thing,” Kassarjian said. “When you’re a down and dirty industrial application, you’re being pushed out of this area by market forces,even if you are strong enough to build and buy your own buildings, which we are.”
De Cristo had about 52,000 square feet and 110 employees at the Spectrum. Kassarjian expects to add about 40 employees at the new site in the next couple of years. Most of those will be manufacturing workers using punch presses, shears, lathes and welders, Kassarjian said. The new employees should fill out the building, he said.
The Westminster lease is valued at $4.3 million over seven years. The company’s old Spectrum space has been leased to a company that makes displays for grocery stores.
In the Spectrum, the company had leased 50,000 square feet of manufacturing space for $35,000 a month and 15,000 square feet of warehouse for $10,000 a month. The new building, at double the size, will cost about the same over the seven years, Kassarjian said.
De Cristo is an old economy company in a tech-heavy town. President Don De Cristo’s founded the company in 1976 in Newport Beach and moved to Irvine four years later, when the Spectrum was merely a sleepy industrial park. De Cristo’s father, Jerry, founded a similar business back east in the 1950s, selling to contractors. Don De Cristo expanded on his dad’s concept by adding large-scale manufacturing and by selling nationally to retailers, instead of just contractors.
The company sells its gear nationally,80% of its products leave Southern California. One of its biggest local customers is Costa Mesa-based White Cap Industries Inc., Kassarjian said.
The company also has a two-year-old regional office in Dallas. Kassarjian said he likes the city for its central U.S. location, rent that costs one-third of that in Southern California and inexpensive entry-level labor.
Don De Cristo moved four times within the Spectrum and owned its most recent site until two years ago when officials sold it to an individual investor and leased it back.
“We outgrew the facility about a year and a half ago,” Kassarjian said. “We leased some storage areas and were trying to make do with what we had.”
Originally, the company planned to build its own facility in Rancho Santa Margarita and even bought land there with money from the sale of its Spectrum facility. But Kassarjian said Mello-Roos taxes alone would have been prohibitive.
“It was going to cost us $250,000 a year just to be in South Orange County,” he said.
Instead, De Cristo sold its six acres to a neighboring developer in Rancho Santa Margarita for about $3 million and chose its new building off the San Diego (405) Freeway at Bolsa Avenue and Goldenwest Street. The previous tenant and owner, magazine and book distributor Anderson News Co., sold the building as part of a regional restructuring.
“We consolidated three production centers in Westminster, Burbank and San Bernardino into a new one in Ontario,” said Doug White, regional vice president for the Knoxville, Tenn.-based Anderson. “Ultimately, it’ll make us more efficient.”
Anderson still has a 35,000-square-feet facility in Placentia.
Costa Mesa-based Cardinal Development formed SIKM Properties LLC to buy the Westminster building for $5 million in June. Eponymous broker John Solomon, representing De Cristo, and Walter Frome and Rooney Daschbah, working for Anderson News, pulled the deal together for De Cristo and Cardinal. Trammell Crow found Anderson’s new space in Placentia.
De Cristo’s lease includes an option to buy the building, Kassarjian said. Most participants in the deal expect the company to exercise the option.
“I wouldn’t be surprised if they do,” Solomon said. “The landlord has to hold it for at least a year because of capital gains, but the functionality is good for (De Cristo). We basically gutted and re-did the entire space.”
De Cristo is making improvements of its own to the building. While the company was out of place in the Spectrum, De Cristo officials are looking to bring some Irvine-style amenities to their new digs.
“They’re trying to make it into a Spectrum-like building,” said David Seidner, Cardinal’s chief financial officer, noting that De Cristo is used to a space with modern design and equipment.
The building in Westminster is at least 30 years old, and Anderson had been in it at least that long.
“They needed to (bring) the building to today’s standards,” broker Frome said. “It was completely original, from the offices to the roof.”
SIKM originally planned to fix up the building for possible sale, and De Cristo got better terms for agreeing to pay for some of the improvements, he said.
“The bottom line that attracted De Cristo was the amount of land and a huge fenced yard,” Frome said. “They have a lot of product that doesn’t need to be in a covered situation.”
Kassarjian said. Westminster offered benefits besides lower cost.
“Westminster is a very nice city to work with compared to Irvine,” Kassarjian said. “It’s like night and day. Once we got our lease signed, we got our permits, (did) the improvements in six weeks and moved in. That’s impossible in Irvine,it takes six weeks just to get your plans looked at.”
Kassarjian said he knows Irvine is backed up,that’s the point, he said.
“These people (in Westminster) are actively seeking employers like us,” Kassarjian said. “The response we got from them was unbelievable.” n
