When the St. Clair Co. LLC broke ground on the Newport Technology Center last month, it began one of the largest projects in Newport Beach since the community began pushing for limits on growth.
St. Clair purchased the nearly 14 acres for $27.5 million in November 1999 and plans to redevelop the site with space available for occupancy by the end of the year.
The property’s four buildings, totaling approximately 425,000 square feet, had been a high-tech manufacturing site since the mid-1950s, passing from Hughes Electronics to Raytheon Co. before St. Clair acquired it.
“With the Greenlight Initiative, how often do you get a chance to purchase and develop 14 acres in Newport Beach?” asked Mark C. Barker, director of commercial development for St. Clair.
Passed in November’s general election, Measure S,the Greenlight Initiative,requires voter approval on non-residential projects larger than 40,000 square feet, residential developments exceeding 100 units and residential or non-residential projects that will produce at least 101 more peak-hour car trips.
The measure was intended to give the people of the city the power to balance high-rise business centers with a beach community, according to Phil Arst, co-founder of the Greenlight Initiative.
“This is not a no-growth initiative,” Arst said. “It’s whatever the electorate chooses.”
St. Clair encountered little resistance in its project due to a grandfathering clause in the initiative, allowing some redevelopment projects to avoid a vote.
“We’re basically recreating what is already there,” Barker said. “We’ll refurbish two of the existing buildings and we’ll tear the other two buildings down and build brand new ones in their place.”
The completed buildings will range from approximately 87,000 square feet to more than 114,000 square feet and the completed project will total less square footage than is currently in place.
The recent groundbreaking also marked the first commercial endeavor for St. Clair, primarily a developer of residential communities. And the company has set its sights high in its initial commercial project. Newport Technology Center intends to woo the same tenant base that traditionally makes its home in University Research Park and the Irvine Spectrum.
The project could struggle, however, if St. Clair sets its sights solely on competing with the research park and Spectrum, according to one source.
One criterion of the research park is for companies to have some connection with the University of California, Irvine.
“Companies moving into that area are the cream of the crop of R & D;,” said Walter Hahn, real estate consultant with Ernst & Young LLP. “And those companies want to have that close connection to the research going on at UCI.”
The Newport Technology Center should do OK in the long term if St. Clair prices the product right, according to Hahn.
A cost-conscious approach is the plan, according to Philip Cohen of CB Richard Ellis, Newport Beach. Cohen and Chip Wright, also of CB Richard Ellis, are brokering the space.
The Irvine Company charges from $2.40 to $2.60 per square foot, triple-net, for its R & D; and flex buildings. Newport Technology Center will bill its tenants from $1.65 to $2.25 per square foot, according to Cohen.
Larger floor plates and covered parking are other bargaining chips Newport Technology Center will use. Tenants can choose from 25,000-square-foot to 200,000-square-foot spaces, compared with the 40,000-square-foot to 60,000-square-foot blocks traditionally offered by The Irvine Co.
However, Cohen is banking that location will be a selling point, too. Sitting a quarter mile from West Coast Highway on a bluff above Newport Boulevard, the site offers an ocean view.
“It’s a short commute for executives who live on Lido Island to surf during their lunch breaks,” Cohen said. n
