Postscript: : An Orange County Rental Offered at Bargain Rate--the Ziggurat

Six months ago, the federal government began a drive to woo private tenants to the largely empty Ziggurat building in Laguna Niguel.

The wooing has yet to produce a lease. But officials are optimistic that the building, at least half empty for most of its 14-year existence, soon will be occupied.

Today, only 57% of the building’s 840,000 square feet is in use. But Denis Faherty, a Coldwell Banker representative assigned to attract tenants, said, “We consider the marketplace healthy, and we’re getting a fair amount of interest.”

The Chet Holifield Building, known locally as the Ziggurat because of its resemblance to a Babylonian pyramid, was built by Rockwell International Corp. for one of its aerospace divisions.

But the Ziggurat fell victim to the industry’s recession and remained empty until 1974, when Rockwell traded it to the federal government for two factories then valued at $20 million.

Almost a decade later, the building still remained only about 50% occupied. So, in 1983, the General Services Administration tried to sell it. Orange County reportedly offered to buy it for $63 million, which the GSA rejected. Later that year, the agency received seven bids for the building, the highest at $22 million. Again the GSA rejected the offers.

Mary Filippini, spokeswoman for the regional GSA headquarters in San Francisco, said the agency has no plans to sell but is pursuing the decision made six months ago to lease space to private firms.

But finding private lessees is a “slow process,” Filippini said.

Faherty said he primarily is wooing high-tech and aerospace companies because they are most likely to need large spaces, and “we’re trying to lease it in large blocks.”

Of the 125,000 square feet designated for private use, Faherty said he is near closing a deal to lease 100,000 square feet to a high-technology firm.

Rent, he said, will be about 25% below market price because “we cannot provide tenant improvements. We’re renting it on an as-is basis. A company will have to invest a certain amount of money to get it the way they like it.”

Currently, the building is occupied by 12 federal agencies, including the U.S. Geological Survey, Department of Health and Human Services, Internal Revenue Service and Department of Labor.

Filippini said her office is holding “serious discussions” with the Immigration and Naturalization Service about 34,000 square feet of space.

“It’s to the government’s best interests that we fill it as soon as possible,” Filippini said. But “we’re breaking even on it right now. It’s not costing the government any money even half-occupied.”