Unocal Will Move Into New Los Angeles Center : Real estate: Developers needed a big firm in their $1-billion complex to lure more financing and tenants.
After months of intense negotiations, Los Angeles-based Unocal Corp. said Friday that it has agreed to keep its headquarters west of the Harbor Freeway near downtown and lease space in the first tower of the massive Los Angeles Center development.
The oil giant’s decision to lease 450,000 square feet in the new project represents a crucial victory for developers Smith & Hricik Urban Development Inc. and Hillman Properties. They had desperately sought a big company to occupy a significant amount of space in their $1-billion development in order to attract additional construction financing as well as other tenants to the site at 6th and Boylston streets.
“We are extremely pleased to have Unocal as the lead tenant,” Mike Chase, president of Hillman Properties, said in a prepared statement. “With a prestigious tenant like Unocal, our Los Angeles Center project will . . . usher in a new generation of development in downtown Los Angeles.”
Still Unocal, aware of the current soft demand for office space in Los Angeles, was said to have demanded huge leasing subsidies from Hillman. In an interview just before negotiations were concluded, John H. Semcken III, director of marketing for the center, said Unocal officials pushed “the deal to the very limit.”
Unocal officials declined to comment on the value of the lease agreement.
A real estate developer who said he was approached by Unocal during its search for office space said company officials indicated that they were seeking a 10-year renewable lease at $6 million to $9 million annually. A Unocal spokesman, however, said his company negotiated a 15-year lease.
Unocal’s headquarters will be spread over 23 floors in the first of five Los Angeles Center towers. The 43-story building, which will carry the Unocal name, will have a total of 836,000 square feet of rentable space.
About 1,200 Unocal employees will occupy the new headquarters, which is adjacent to the company’s current 12-story complex that was built in 1956. Unocal said it expects to complete its move into the new office tower by late 1993. After they move, the old headquarters will be torn down.
“The west side of the Harbor Freeway has always been identified with Unocal,” Chairman Richard J. Stegemeier said in a prepared statement. “Our decision to keep our headquarters there is evidence of our faith in the future of the area.”
When completed, the Los Angeles Center is expected to include five office towers totaling 4.3 million square feet of space and a 500- to 600-room hotel.
