Prize 24-Acre Parcel : Blue Cross to Consider Bids for Developing Warner Center Site
Blue Cross of California officials announced Monday that they are accepting bids to develop a 24-acre parcel of Warner Center property after receiving several unsolicited offers to build on it.
Development of the land--now grassy open space with mature trees and parking lots--stands to increase significantly the density of Warner Center by adding office and commercial buildings, Los Angeles city planning officials said.
Development on the park-like site--bordered by Oxnard Street, Canoga Avenue, Erwin Street and Owensmouth Avenue--would require a zoning change.
But even as developers lined up with plans to build on what several real estate brokers called the most attractive business site in the San Fernando Valley, homeowners promised to fight any zoning change that would lead to increased density and traffic.
An executive of JMB Realty, a giant Chicago-based real estate investment firm that bought Blue Cross’ Warner Center headquarters building last year, said he was very confident his firm will buy the land.
“We are actively negotiating with Blue Cross. . . . We intend to buy it,” said Neal Gumbin, senior vice president of JMB Realty Corporation. “Blue Cross is in the process of trying to generate competitive offers against ours. But they intend to sell it this calendar year.”
Gumbin said his firm envisions a “handsome low- and mid-rise office complex” that would be “a step in the maturation of Warner Center as a regional commercial center.”
Blue Cross spokesman Larry Rodriggs would confirm only that JMB is “one of several organizations with which we have discussions.”
The announcement of development plans by financially struggling Blue Cross, one of the state’s biggest health insurers, came as the company disclosed that it lost $20.5 million in the second quarter, giving it a $51.6-million loss for the first six months of 1988.
In December, 1987, the company sold its 14-story headquarters for $90 million to JMB. It also sold an affiliate called Take Care, a health maintenance organization in Oakland, for an undisclosed price.
The sale price of the Woodland Hills land is difficult to estimate, real estate brokers said, because the density of development depends on getting the zoning changed.
The land is now zoned for a two-story parking structure, surface parking and a strip of commercial buildings. Deuk Perrin, chief city planner for the Valley, estimated that if the land designated for parking were rezoned for commercial use, high-rises could be built containing up to 3.7 million square feet of office space.
Stanley Friedman, national real estate consulting partner of Coopers & Lybrand, an international accounting firm hired by Blue Cross to analyze the property, said the land could be worth $100 million to $150 million. “It could be worth more. It’s difficult to say right now,” he said.
“We are talking about a very significant development of several hundred million dollars,” Friedman said. “It may be one of the premiere projects in the country.”
Gumbin said development of the land “is not a contest to see how much footage” can be built. “It would be a combination of three and four-story buildings and 12- and maybe 20-story buildings. . . . We want to create as valuable a project as possible.”
Gordon Murley, president of the Woodland Hills Homeowners Organization, said that as far as his group is concerned “we will not support one more building under the current conditions that exist in Warner Center.”
He said that traffic in the area is intolerable and that the group will fight any zoning change that does not solve traffic and parking problems.
“What we see is the very greed of trying to make money at the expense of the livability of this community,” Murley said. “How many straws can you put on the camel’s back?”
