Huge Projects in Offing for 2 O.C. Cities

Major redevelopment projects are in the works for two of Orange County’s oldest and biggest cities, with a Japanese company expected to announce today a $400-million construction project in Santa Ana while a local developer unveils a $200-million project in downtown Anaheim.

The Japanese company, Orient Finance Co., will announce plans for a complex of offices, condominiums, shops and possibly a theatrical stage on 18 acres along Main Street across from the MainPlace/Santa Ana mall.

In Anaheim, the city’s Redevelopment Agency is expected to approve the sale of 16 acres off Harbor Boulevard not far from City Hall to the Koll Co., which will build five office buildings, 30,000 square feet of stores, a hotel, restaurants and movie theaters in the largest redevelopment project in the city’s history.

Both projects are major steps in creating integrated commercial and residential centers in those cities. Santa Ana has pursued an aggressive redevelopment policy for the last 10 years, resulting in the renovation of MainPlace and development of the Hutton Centre office complex, among other projects. Anaheim, meantime, has been less successful in bringing redevelopment projects to fruition.

In Santa Ana, Orient Finance bought the 18 vacant acres last year for $23.5 million, or about $30 per square foot, the highest price ever paid for that much land in that neighborhood. The company will work with the Laguna Niguel developer Birtcher, who will advise Orient Finance as well as build the project, according to Santa Ana officials.

That project will include high-rise condominium towers as well as a clutch of office towers. It would also encompass parking and stores, according to preliminary plans filed with city officials.

The land had long been eyed by local developers, who balked at the price the Hurwitz family was asking for the land. Permits must still be obtained to build on the property.

The purchase last year signaled a change in Japanese investment patterns. Until then, the Japanese had rarely bought land in the county, preferring to buy buildings. Because Japanese companies can borrow at lower rates, they can make a profit on a real estate purchase even while paying so much that a U.S. investor might find the deal unprofitable.

While Orient Finance does not yet have permission to build on the land, it has been negotiating with city officials, including Mayor Daniel H. Young and City Manager David N. Ream, over the project.

“What they’re proposing and what we want to see there are pretty close to the same,” said Bob Hoffman, the city’s redevelopment manager.

Orient Finance is Japan’s largest consumer finance company. This is its first real estate purchase on the U.S. mainland.

In Anaheim, meanwhile, Koll--one of Orange County’s largest developers-- will build an eight-story, 200,000-square-foot building for Pacific Bell in the first phase of developing 16 acres south of Lincoln Avenue and bounded by Broadway and Harbor Boulevard. Koll will also construct a 10-story, 200,000-square-foot office building for the city of Anaheim’s Public Utilities administration.

The City Council and Anaheim Redevelopment Agency are expected to approve the sale today. The price for the land won’t be known until then.

Coupled with a $40-million housing project to be built nearby, the Koll project--called Anaheim Center--is designed to attract more people to live and work downtown. The housing project, 20-acre Lincoln Village, includes shops and nearly 400 houses, condominiums and apartments.

Koll, a big Newport Beach developer, will build three more office towers on the land in successive phases.

Anaheim’s downtown has been something of an embarrassment since the city tore down many buildings about 17 years ago because officials thought that vacant land would attract developers. Instead the empty lots became symbols of the city’s inability to resuscitate its downtown.

In 1982 city officials thought that they had found a solution when the city signed an agreement with Meyer Investment Properties Inc. to develop property. But by 1987 Meyer had built only the First Interstate Bank building at Harbor Boulevard and Broadway and had lost the rights to develop the remaining land.

A City Council member said today’s agreement was worth the wait.

“To have settled for something less or just anything . . . is always more expensive in the end because you have to redo it,” Miriam Kaywood said.

Koll envisions a complex dominated by office buildings along Center Street, which will be a pedestrian walkway lined with shops and restaurants. A multiscreen movie theater is planned for the southeast corner of Lemon and Center streets, and the hotel is planned for the corner of Clementine and Center streets.

“We feel it is a tremendous project which is really going to help consolidate everything in the downtown area,” said Allan C. Hughes, executive director of the Anaheim Chamber of Commerce.

Construction is expected to start this summer on the Pacific Bell building, the first building in the project. Koll will build and then sell the structure to the phone company for about $16 million, according to Pacific Bell.

When the building is completed in 1991, the phone company will move 1,000 employees in from a high-rise on South Main Street in Orange owned by the General Motors pension fund.

The phone company estimates that it will save as much as $19 million by moving into the new building, which will be its marketing headquarters for residence and business accounts in Orange, Riverside and San Bernardino counties.