S&L; Bailout Agency Sets Up Shop in Costa Mesa : Thrifts: The Resolution Trust Corp. is hiring 400 workers to work in its regional office.

In what would seem an appropriate setting, the federal agency charged with disposing of billions of dollars worth of assets from failed thrifts has set up operations in the once-lavish headquarters of an ill-fated institution.

From well-worn carpeted offices in a three-story wing of the former Pacific Savings Bank headquarters in Costa Mesa, the Resolution Trust Corp.--created last summer to manage failed savings and loans--is hiring 400 workers to oversee the sale of more than $15 billion in bad real estate, soured loans, devalued securities and other assets.

“We’re looking for a lot of qualified people: credit technicians, clerks, secretaries, managers, contracting agents,” said James G. Klingensmith, managing director of the RTC’s Coastal Consolidated office. About 150 people have been hired in the last two months.

The buildup in regulatory personnel in Costa Mesa, as well as in offices in Phoenix, Denver and throughout the nation, is one more line item on the burgeoning budget of the biggest financial fiasco in the nation’s history.

The debacle in the thrift industry and the law enacted last summer to bail out the S&L; deposit insurance system could wind up costing taxpayers more than $300 billion over the next 30 years, according to recent industry and government estimates.

Besides fostering a bigger government work force, the law has provided a boom to the legal and accounting professions as regulators exercise new-found clout in court and as former thrift owners such as Lincoln Savings & Loan’s Charles H. Keating Jr. fight back.

The law also stands to benefit private companies, especially in the real estate industry, because it requires the RTC’s liquidators in such operations to farm out work to the private sector.

Kevin Shields, an RTC spokesman in the Denver regional office, said as much as 90% of the agency’s liquidation work will be handled by private firms that specialize in such areas as real estate appraisals, loan recoveries, commercial and residential real estate marketing and sales of foreclosed property.

“This law certainly is going to be a boon to a great many contractors,” Shields said.

So far, about 6,000 companies and individuals nationwide have applied to do business with the RTC as independent service contractors, and Shields said he expects the number to climb to 15,000 by this summer.

To help prospective contractors and purchasers of S&Ls; or thrift assets, the RTC is putting on its “How to Work With the RTC” seminar on May 30 at the Anaheim Marriott Hotel. In the last month, five sessions in Midwestern and Eastern cities were sellouts, the agency said.

The RTC office in Costa Mesa, replete with mismatched furniture and dark rings on walls where pictures once hung, has been put together to dispose of the so-called bad assets--those that healthy institutions usually don’t want--of failed thrifts in California, Oregon, Washington, Alaska and Hawaii.

The bad assets are what is left when the RTC closes a thrift, merges it into a healthy institution or sells what it can of the failed S&L;’s holdings. Such action usually comes years after federal regulators seize the institutions, though they expect to pick up the pace of resolutions this year.

So far, Klingensmith has $500 million in assets left over from six failed S&Ls;, including five Orange County thrifts. The biggest chunk--$400 million--came from Pacific Savings, most of whose good assets were sold to Royal Trustco Ltd. in Toronto last October. The remains of two Alaska thrifts also are being sent to the Costa Mesa office in the next few weeks.

By this summer, Klingensmith expects to have roughly $5 billion in assets, including the 120,000-square-foot Pacific Savings building, ready for sale.

Besides handling bad assets, the Costa Mesa office also is sending credit managers to failed thrifts that are being operated by the RTC to help evaluate loans and other assets, Klingensmith said. In California alone, Shields said, the agency is operating 25 failed thrifts, and some assets from each will likely end up in the Costa Mesa office.

It is unclear whether the Phoenix or the Costa Mesa office will get the remains of Irvine-based Lincoln, predicted to become one of the nation’s single-largest bailouts with a taxpayer bill of $2 billion.

Klingensmith thinks unsold Lincoln assets will go to the Phoenix office, where the RTC currently is managing the thrift. But Shields said those assets could go to Costa Mesa because Lincoln’s headquarters is still in Orange County.