Hughes Aircraft May Sell Fullerton Land : Real estate: Company says sale of 150 acres that border its manufacturing plant would ‘reduce costs so we can be competitive.’

Hughes Aircraft Co. is considering selling 150 acres of nearly vacant land that borders its 200-acre manufacturing plant here, the company confirmed Friday.

Dan Reeder, spokesman for Hughes Fullerton, formerly known as Ground Systems Group, said that the manufacturing plant itself, which employs 7,100 people, would not be put up for sale. Hughes makes radar systems, air traffic control systems and other military equipment in Fullerton.

“There will be no disruption to the existing plant,” he said. “We’re not sure if we’re going to sell this land. It is part of a corporate-wide look at selling unused real estate. It is only one option.”

The land in question is bordered by Pioneer Avenue on the north, Sunny Hills High School on the east, Gilbert Street on the west, and the Hughes manufacturing plant on the south.

Paul Dudley, director of development services for the city of Fullerton, said that the company was considering selling parcels of land that could be used to build 600 to 800 homes.

“It’s a major portion of land for Fullerton because we don’t have a lot of land available,” he said.

If the land is sold, Hughes would have to relocate its material recycling facility, a radar testing facility, and a test course, Reeder said. The rest of the land has been leased to farmers. Hughes has owned the land, which is zoned for manufacturing use, since the 1950s.

The decision to consider selling the land is unrelated to a major announcement June 30 that Hughes Aircraft Co. would reduce its work force by 15% over the next 18 months, Reeder said. Hughes Fullerton will probably shed its share of employees during that time.

“It’s to reduce our costs so we can be competitive,” Reeder said. “It’s like owning a house and using only four of the five rooms.”

David Knowlton, an industrial specialist in Grubb & Ellis brokerage’s Anaheim office, said that selling the land might be slow going.

“There’s a shallow market for land right now,” Knowlton said. “Construction loans are difficult to come by, and current lease rates and (building) sales prices are so low that developers have been discouraged from developing land. Landowners aren’t willing to sell land at prices that would make any sense for economic development.”

Knowlton said that prices in central and north Orange County for land zoned for industrial use range from $7.50 to $15 per square foot--down about $3 per square foot from three years ago. Under those prices, that would mean the Hughes parcel could be worth $49 million to $98 million.

Times staff writer Susan Christian contributed to this report.