Construction of a new headquarters campus for Broadcom Corp. could be among the immediate byproducts of FivePoint Communities’ recent agreement with the city of Irvine over development plans for the former El Toro Marine Corps air station.
The Irvine-based chipmaker is said to have reached an agreement to build a new campus on land owned by FivePoint, the Aliso Viejo-based developer of Great Park Neighborhoods.
Broadcom could begin construction on a new office campus on land near the Irvine train station as early as mid-2014, according to officials familiar with the negotiations.
Terms of the deal have not been disclosed.
Broadcom—Orange County’s largest office tenant—has not announced plans to relocate, and officials for the company last week declined to discuss the status of negotiations.
Officials with the city of Irvine are acting as if the move is a done deal.
Irvine Mayor Steven Choi said he was “delighted that [Broadcom has] committed to locating their new headquarters on Five Point Communities’ land near the Great Park.”
“Now, not only do we keep those jobs in Irvine, but Broadcom can become the nucleus for the headquarters of more high tech companies,” Choi said in a recent letter to constituents.
FivePoint Chief Executive Emile Haddad, for his part, said he’s confident that Broadcom will become a part of his development but declined to discuss specifics of his company’s agreement with the chipmaker.
The relocation plans were said to be dependent on FivePoint reaching an agreement with city officials on development plans for Orange County Great Park, as well as the surrounding Great Park Neighborhoods, which is set to hold a mix of residential and commercial projects.
That agreement was finalized on Nov. 27, following a lengthy City Council hearing that capped more than a year of negotiations between FivePoint and city officials.
The deal includes approval for FivePoint to build another 4,606 homes at the former Marine base.
FivePoint agreed to pay more than $200 million in return for increasing the number of houses approved for development on its land from about 5,000 homes to 9,600. That money will be spent building about half of the 1,347-acre Orange County Great Park on the adjacent city-owned land over the next five years.
The developer had been pushing for the deal as a way to provide an amenity to its massive housing development, whose first neighborhood opened a few months ago.
Broadcom officials were in attendance at last month’s hearing on the latest deal, as well as prior Irvine City Council meetings involving the fate of the former military base.
The 3-2 City Council vote followed partisan lines. Mayor Choi, a Republican, cited the need to keep Broadcom in Irvine as a key reason for his vote to approve the deal with FivePoint.
“I really want those high-paying jobs to stay in Irvine,” Choi said in a Dec. 6 letter. “I met with Henry Samueli [Broadcom’s cofounder and chairman] to tell him that.”
OC’s Top Tenant
The deal to bring Broadcom to its land, if completed, would be a coup for FivePoint nearly on par with the approval for more homes.
Broadcom is OC’s largest technology company by employee count—with more than 2,000 local employees—and is the area’s largest user of high-end office space.
It occupies about 920,000 square feet of space at its current headquarters at University Research Park, a business park next to the University of California, Irvine, running along the San Joaquin Hills (73) Toll Road.
A lease for the bulk of that space, which opened in 2007, expires in 2017.
Executives of Newport Beach-based Irvine Company, landlord for Broadcom’s existing headquarters, last week declined to comment on whether the tenant had told the company it would or would not be extending their lease.
No Specifics
While specifics of Broadcom’s deal for a new campus on FivePoint’s land have not been disclosed, it is expected that a development would offer the company plenty of room to expand its operations.
Choi’s letter said the company could look to double its local employee count at its new headquarters. Broadcom officials last week refuted that claim and said it has never committed to such an expansion.
The FivePoint land slated to hold Broadcom’s offices is near the southern edge of the former base, near the intersection of the San Diego (405) and Santa Ana (I-5) freeways.
The deal with FivePoint—described by one real estate source as a term sheet and another as a “deal in principle”—is said to give Broadcom the ability to start construction by the second half of next year.
Broadcom employees told the Business Journal they’ve been given no formal notice that a deal to move is done.
The company has also been exploring opportunities for new headquarters at the Tustin Legacy development site for over a year. Broadcom was also said to be eyeing Irvine Co.’s land near the Spectrum shopping center for a new site, in addition to staying at its existing location.
A few real estate sources have suggested that Broadcom still could opt to remain where it is, move to Tustin, or stick with the Irvine Co. for a new campus, despite Mayor Choi’s recent claims that a deal was finalized.
A recent Tustin City Council hearing agenda indicated that negotiations with Broadcom remain active as of earlier this month.
The office campus is one of several new construction projects that FivePoint expects to see move ahead next year on the former base, now that an agreement with the city has been approved.
The first phase of Great Park’s sports park should begin work in earnest next year, Haddad said.
Sports Park
The sports park—a mix of soccer fields, tennis courts and other amenities—is expected to open by the end of 2015, around the same time that FivePoint’s next residential neighborhood opens for sales.
Its first neighborhood—the 720-home Pavilion Park—is now seeing its first move-ins. There have been 35 homes closed, and about a quarter of the homes at Pavilion Park are now under contract, according to Haddad.
About 1,000 homes will be built at the second phase of the Great Park Neighborhoods, and early-stage development work for that land—located between Irvine Boulevard and Trabuco Canyon Road—is now under way.
Haddad said he hopes to close escrow with homebuilders for that phase of development by the end of 2014.
