A dramatic auction that started in June has finally come to an end for a 92-acre site that is expected to become a multi-billion-dollar redevelopment.
Pintar Investment Co. is paying $177 million for the Chet Holifield Federal Building in Laguna Niguel, significantly higher than the $70 million opening bid the federal government set on June 5 when the auction started, sources told the Buisness Journal.
The building, also known as the Ziggurat, spans 1 million square feet. The final price works out to be more than $1.9 million per acre and $177 per square foot.
Properties in south Orange County, per CoStar data, have sold for about $4.6 million an acre, meaning the buyer acquired the federal building and surrounding property at a discount.
There were three bidders who submitted 157 bids. The winner and another undisclosed bidder went back-and-forth in bidding almost every day between June 5 and Oct. 24.
Build Something and They’ll Come?
The 92-acre property at 24000 Avila Road in Laguna Niguel could be a field of dreams for any developer, especially one seeking to tear down the federal building and use the land for other uses.
What those uses could be, however, is up in the air. The property, as it stands today, is zoned for office uses.
San Juan Capistrano-based Pintar Investment Co. must now obtain entitlements and go through possible zoning changes with the city of Laguna Niguel. The city, however, has not committed to rezoning the property to allow for housing, making this site an even riskier purchase.
Pintar Investment bought the property as-is, with no guarantee it could be re-zoned for housing or any other use.
Costco, Home Depot, Kohl’s and Walmart are all located within one mile of the federal building, making the property an ideal location for new houses.
An Unloved Historical Landmark
William Pereira, the renowned architect behind the PacLife Building at Newport Center and the Transamerica Pyramid in San Francisco, designed the Chet Holifield Federal Building. It was built between 1968 and 1971 and commissioned by Rockwell Corp. and labeled as “Modernist” in design.
General contractor Huber, Hunt and Nichols was awarded an $18.5 million contract in 1968 to build a 1-million-square-foot, seven-floor building that would resemble an ancient Babylonian temple called Ziggurat.
Things took a turn for the worse in 1971. Economic conditions and the politics of the day forced Rockwell to abandon its plans with the Ziggurat building. Rockwell’s departure resulted in the building being vacant for the next few years.
The U.S. General Services Administration came into the picture three years later, as Rockwell, unable to sell the Ziggurat, requested a property exchange with the federal agency. Both parties consummated a deal in 1974.
The General Services Administration renamed the Ziggurat as Chet Holifield Federal Building in 1978, and the property until recent years was used to house several government agencies.
The National Register of Historic Places, in its report on the Ziggurat, said the Rockwell building was set to be “the world’s largest electronics manufacturing plant of its time and the largest building in Orange County.”
The National Register of Historic Places considered a proposal to deem the seven-floor federal building, due to its Mesopotamia-style design, as a historical landmark.
Officials with the General Services Administration attempted to designate the federal building as a historical landmark and doing so would restrict what a developer could do with the building and surrounding property. However, no bids were submitted last year when the federal government tried to auction the campus.
The General Services Administration removed all historical designations for the property ahead of the second auction, opening the door for 157 bids between June 5 and Oct. 24.
What’s Next for Pintar Investment?
It could take months for the General Services Administration to officially reveal the identities of the winning and losing bidders, per an agency spokesperson.
The spokesperson person confirmed the federal agency accepted the high bid of $177 million on Oct. 25. She added the winning bidder must submit a $17.5 million deposit. The winning bidder must also close escrow within 180 calendar days of Oct. 25.
Traci Washington, the General Services Administration’s spokesperson, said both her agency and the Internal Revenue Service currently occupy space at the Chet Holifield Federal Building. The IRS, Washington added, will relocate to a new space and vacate the Ziggurat building by Feb. 28, 2025.
The General Services Administration added the Ziggurat campus was sold as-is and includes the federal office building, maintenance building, an energy station, water reservoir, water cooling tower and two guard houses.
