Northrop Sells Anaheim Complex, 2 Office Towers

Northrop Corp. said Wednesday that it has agreed to sell its 53-acre defense plant complex here--the first aerospace facility built in Orange County nearly 40 years ago--and two Century City office towers, including its corporate headquarters, for more than $250 million.

The Los Angeles-based aerospace giant said it would use the proceeds to pay part of its $1.2-billion debt. Like other defense contractors, Northrop in the past year has felt the pinch from cutbacks in federal defense spending.

The two office buildings are being bought by the California State Teachers Retirement System, a Sacramento-based pension fund that has lately bought several major buildings in Southern California. Northrop will continue to lease space in its headquarters building.

Taiyo Development U.S.A. of Torrance, a subsidiary of Taiyo Real Estate Co. Ltd., one of Japan’s largest builders, is buying the Anaheim property, which consists of 10 factory and office buildings. Northrop announced plans to shutter the facility last year.

Taiyo declined to say what it plans for the land. But real estate brokers suggest that Taiyo would need to tear down the plants and construct retail stores in their place in order to make a profit. The brokers estimate that Taiyo spent about $45 million for the Anaheim property.

That suggests the two office buildings and 2.9 acres in West Los Angeles’ ritzy Century City area sold for more than $200 million, which brokers said was also a high price. Neither Northrop nor the buyers would disclose individual prices for the properties.

Northrop had announced last year that the plant, which still employs 1,300 workers, and the office buildings were for sale, so Wednesday’s announcement came as no surprise.

Of Southern California’s major defense contractors, Northrop has been among the hardest hit by budget cuts. The B-2, or Stealth bomber, is enormously costly, and uncertainty continues over how it will fare in an atmosphere of defense cutbacks.

The two office buildings in the Century City area--one 15 stories high and the other 19--total 540,000 square feet. Northrop’s 300 corporate staffers will lease 130,000 square feet in the taller building, 1840 Century Park East, which is 6 years old. The other building is at 1800 Century Park East and is 20 years old. The sale is expected to close next month.

Northrop last year announced that it would close the Anaheim manufacturing operation as part of a consolidation of Southern California facilities. About 500 employees have resigned, retired or transferred since then. The remaining employees are being offered transfers to plants in Hawthorne and El Segundo.

The Anaheim complex, part of the company’s Electronics Systems Division, makes sensors used by pilots and antiaircraft crews to shoot down targets and also makes equipment for testing missiles.

The Anaheim sale is expected to close in 1991 and Northrop said it would vacate the plant by the end of this year.

The city would like to see the land redeveloped as a mall or shopping center, since that would bring in more tax revenue than a factory.

But the stores would probably have to be discount stores in keeping with the character of the neighborhood, says Al McCord, the city’s economic development manager, and there are already several such stores just across the city line in Fullerton.

Despite those problems, McCord and real estate brokers said the land was highly sought after by Taiyo and other developers.

“God isn’t making any more land right on the freeway in Southern California,” McCord said.