UCI Agrees to Let Irvine Co. Develop Land

UC Irvine tentatively agreed Monday to grant the Irvine Co. exclusive rights to develop 292 acres of campus land, together with 123 acres of adjoining company property, for a bioscience research and development park that both parties hope will be a magnet for high-technology firms.

The preliminary agreement, signed at a campus press conference, appears to seal a reconciliation between the two institutions after a sometimes rocky relationship stretching over two decades.

“It was clear from the founding of the campus and the initial gift of land to the university from the Irvine Co. that we would be working together,” UCI Chancellor Jack Peltason said.

‘Closer to Goal’

He said “the vision, then as now, was to establish not only a good but a great university--which serves its students and its community with integrity and distinction. The partnership that was started with the Irvine Co. over 25 years ago, which we formally initiated today, brings us closer to that goal.”

Peltason said UCI stands to benefit from the agreement, approved by the Regents in San Francisco on Oct. 18, because “we’ve got lots of land and relatively few dollars” in private endowment. He said the university’s financial problems would be eased significantly by the agreement.

Details will be worked out on a parcel-by-parcel basis, but in most cases the private firms will sign long-term ground leases with UCI. The university will also have an option to “participate as an equity investor in developments.”

How the revenues will be divided will be determined in future negotiations, expected to be completed by May, 1986, and which, Peltason said, also must be approved by the UC Regents.

And despite Monday’s fanfare, the memorandum is not legally binding and is, in Peltason’s words, “an agreement to discuss an agreement.”

Thomas Nielsen, Irvine Co. president, said the proposed development on the southwest edge of the campus would be “comparable in quality and purpose to Stanford’s Research Park, the Princeton Forrestal Center and the North Carolina Research Triangle.” The resulting “synergism” between the campus and the company, Nielsen said, “should benefit all in our society, in fields ranging from bioscience and medicine to high technology.”

Under terms of the agreement, the Irvine Co. will exercise a “master option” for a 35-year ground lease, enabling it to develop a 415-acre package carved out of a larger area over which both the company and the university until now have maintained a reciprocal veto on development.

Sold at Reduced Rate

UC Irvine was built on 1,000 acres of land donated by the Irvine Co., a privately held company that is still Orange County’s biggest landowner. Under terms of a later agreement, an additional 510 acres were sold by the company to the university at a reduced rate, restricting development of the property to “university-oriented” purposes.

A similar restriction was placed on 150 adjoining acres retained by the company. Together, these 660 acres were referred to as the “inclusion area,” and in the years since, no precise definition of what constituted “university-oriented” has been spelled out.

The university is now building the Beckman Laser Institute on part of its inclusion land not involved in Monday’s agreement. The institute is being financed by $2.5 million from Orange County philanthropist Arnold Beckman, founder of Beckman Instruments, and $500,000 from the Irvine Co. The Irvine Co. is expected to announce in the next several weeks plans to locate the western headquarters of the National Academy of Sciences on its portion of the inclusion land not covered by Monday’s agreement. That building is expected to be underwritten by a $20-million gift from Beckman.

Development Dispute

However, agreement on commercial development of the inclusion land was stalled by a contentious dispute between the university and various elements of the Irvine community, including the Irvine Co., over the location of a hospital. This dispute ended in 1983, when the university gave up its effort to build a medical center on the campus, enabling plans for construction of a community hospital to go forward on land donated by the Irvine Co. near its Irvine Spectrum biotechnology development at the confluence of the San Diego and Santa Ana freeways. The community hospital, called the Irvine Medical Center, is considered a drawing card for biotechnology firms.

Despite the specter of competition between Spectrum and the campus area, Nielsen said “the unique aspects of this (campus) property” will enable it to attract sufficient clients.

Peltason said potential competition with Irvine Spectrum for firms had been “a concern that we all had,” and the university had been reluctant to compete on its own against the Irvine Co. “Now the Irvine Co. has a vested interest in developing the (campus) research and development park,” the chancellor said. “They’re in a position to protect our interests, and in a timely fashion.”

Peltason said, however, that “the university knows how to protect its integrity” in its relationship with the Irvine Co. There are “checks and balances” written into Monday’s agreement “to keep the Irvine Co. from taking advantage of us,” he said.

Model for Future

One of the models for future development cited Monday by the university is the Nelson Research Center. In 1983, Nelson Research Co., the Irvine-based pharmaceutical firm, signed a 30-year ground lease with UCI to build a $6-million facility on part of the inclusion area. The company retained most of the area for its own use and turned over the remaining portion to UCI laboratories.

“Nelson preferred to take space, rather than rent,” Peltason said. In the new development, UCI is looking for a return “more in terms of dollars,” since the university lacks a significant independent endowment. UCI needs space now for classes, the chancellor said, pointing out that some lectures are being held in a nearby movie theater. In the short-term, he said, “money is translatable into space.”

Nielsen said the Nelson Research project helped spur negotiations between the university and the Irvine Co., which did not want to see a proliferation of similar projects on the property without company involvement.

Times staff writer Carla Lazzareschi contributed to this story.