Whittier Law School is expected to remain in Costa Mesa for the time being, but will be a renter after its 15-acre campus was sold to an investor that appears to have ties to China.
The four-building campus—on Harbor Boulevard just north of the San Diego (I-405) Freeway and across the street from the Automobile Club of California’s headquarters—recently sold for $35 million.
An Arcadia-based LLC listed in property records as BEG Holdings bought the property, Interim Dean and Professor of Law Judith Daar confirmed last week.
Marc Stevens, Whittier Law School’s director of communications and marketing, said Whittier College will continue to operate the law school at the site under a leaseback agreement.
School officials declined to provide any details on the agreement, but said that students will not experience any disruption as a result of the transaction.
The school put the campus on the market last year and had been considering relocating its operations. The law school has been based in Costa Mesa since 1997. Its buildings total about 126,000 square feet.
Whittier originally rented the property, and purchased it in 2004, College President Sharon Herzberger said.
The college has been approached by various entities interested in purchasing the law school campus over the years, she said.
“The recent sale allows us to lease the space from the new owner and retire the debt associated with the initial purchase,” she said.
Lars Platt, Jason Ward and Rick Kaplan, brokers with the Irvine office of Cushman & Wakefield Inc., listed the property for the school.
Cushman & Wakefield brokers last week confirmed that the sale was completed around the end of January but declined to provide details on the transaction, citing confidentiality agreements in place.
Whittier officials also declined to comment on the buyer’s long-range plans for the site. Sources familiar with the transaction tell the Business Journal that while the site was initially expected to sell to developers, the new owner is expected to retain an educational focus for the property.
Data gleaned from state filings suggest the buyer is affiliated with Baocheng Education Group, a Dalian, China-based company with ties to some other schools in the U.S. Both entities have a legal presence established in the San Gabriel Valley city of Arcadia, state records show. Attempts last week to contact representatives of that company were unsuccessful.
The property sale comes amid a challenging time for Whittier College, which has its main undergraduate campus in the city of the same name in Los Angeles County.Â
Operating revenue for the college overall dropped from $77.5 million in its 2015 fiscal year to $76.7 million last year, according to audited financial statements. Expenses increased from $74.8 million to $76.7 million over the same period, while net assets decreased from $208.8 million to $205.4 million.
Enrollment at the law school declined by 35% in fiscal 2016 from its recent peak in fiscal 2013.
There were 133 incoming students to the law school last fall. The entire law school student body is close to 400.
Law school enrollments have been declining nationally, according to the college, which reported that it took actions in fiscal 2016 to downsize the law school and reduce expenses in personnel and operations.
Daar deferred questions about measures being taken to increase revenue to Whittier College officials who did not comment.
Whittier was the first American Bar Association-accredited law school in Orange County, but it’s faced accreditation challenges in the past decade due to low bar passage rates. Last year, for example, out of all 21 ABA-accredited California law schools, Whittier scored the lowest for first-time takers—at 22%, far below the statewide average of 62%.
Daar said Whittier’s law school has a number of programs to support student success on the bar exam, including its department of bar preparation and academic support that’s staffed by “a team of experts who work with our students from orientation to graduation to teach them the skills they need to pass the bar.”
Daar said she considers Whittier a high-performing law school.
“Our alums in general are really successful and do tremendous work on behalf of their clients,” she said. “As dean, I know there are a number of measurements of success, but I measure it in part by good works. Many of our alums pursue careers to advance social justice.”
The law school has not had a permanent dean since Penelope Bryan stepped down in Feb. 2016.
Whittier Law School prides itself on racial and socioeconomic diversity, according to its website, which touts that it was ranked the “4th Most Diverse Law School in the Nation” by U.S. News and World Report in 2016 and the “Most Diverse Law School in California” by U.S. News and World Report in 2014, among several rankings (see related OC Leader Board, page 53). 64% of its student body are students of color, according to its website. And 51% are women.
The ABA recently decided not to tighten bar passage rate standards for accredited law schools. A lot of criticism has been lobbed at the proposed revision, which would require 75% of a law school’s graduates to pass a bar exam within a two-year period, for the school to meet accreditation standards. Various groups, including the National Black Law Students Association testified at a hearing in August that the proposal “failed to address racial inequities in the law school admissions process and legal education,” according to the ABA Journal.
