$77-Million Appraisal Helps Ziggurat Lose ‘White Elephant’ Status

After four years of trying to sell a massive, partly empty federal building in Laguna Niguel known as the Ziggurat, federal officials now say it is more economical to keep it.

A General Accounting Office report released Thursday said the Chet Holifield Building, previously appraised by the government at $40 million, is now worth up to $77 million--more than any private or public agency has ever bid for it.

The report by William Anderson, GAO assistant comptroller general, said it would be less expensive to renovate and keep the 1-million-square-foot, pyramid-shaped building than to move its 1,800 federal employees and 11 federal agencies to new quarters. Anderson said he was reaffirming a previous conclusion by the federal General Services Administration.

Rep. Robert E. Badham (R-Newport Beach), who requested the report and who had strongly advocated selling the building, said he now believes that it makes sense to keep it.

The building is valuable not only because it is worth much more than previously believed but because it is no longer “in the boondocks,” Badham said. “In the 14 or so years since the federal government bought it, civilization has moved” to the Saddleback Valley, Badham said. “So now, when a citizen comes in to IRS, Census, you’ve not only got a pool of employee potential, you’ve got habitat that’s there and people around there.”

Rep. Ron Packard (R-Oceanside) also applauded the report. Keeping and renovating the Ziggurat is “the most economical way of dealing with the building,” Packard said. “Rather than being a burden on our government, it ought to contribute to government.”

Ezell Vindicated

The report’s conclusion adds impetus to a three-year effort by Harold Ezell, Immigration and Naturalization Service regional director and a Laguna Hills resident, to move his administrative headquarters out of crowded offices at Terminal Island and into the building.

“This will be Harold Ezell’s shop,” Badham said.

For most of the 13 years the government has owned the Ziggurat, it has been less than half full and has been widely viewed as a “white elephant.” Badham and other officials estimate that the government has spent millions of dollars maintaining plumbing and electricity for empty floors.

Built by Rockwell International Corp. in 1971, the building was traded to the federal government in 1974 after the aerospace industry plunged into a recession. But initially, few federal agencies wanted to move to a developing area where cows still can be seen grazing outside the building’s windows.

Recently, as residential and commercial buildings have filled the valley, the GSA renewed efforts to place government agencies there. The building is now 62% occupied, GSA regional deputy director Russ Biatek said Thursday.

However, the GAO report said, government officials have remained “in a Catch-22 position,” with Congress and the Office of Management and Budget questioning whether to appropriate money to renovate it and agencies “reluctant to move in” until funds for renovation are appropriated.

Badham last August helped block a $10-million renovation project for the building. He said Thursday that he had feared it would be “throwing good money after bad.” In September, he and several other members of Congress asked for the GAO study after learning that the GSA had rejected an offer by representatives of Hughes Aircraft to buy the building for $60 million.

Badham said he is now satisfied that the building can be put to good use and will support the $10-million appropriation.