Bolsa Chica Co. to Buy Koll Real Estate Unit : Acquisition: The move is seen as a time-saving way for the Newport Beach developer to take one of its divisions public.
Bolsa Chica Co. said Thursday that it will acquire the U.S. real estate development operations of Koll Co. for $4.7 million in cash.
The new development company, Koll Real Estate Group Inc., will own the Bolsa Chica Wetlands, part of 1,700 acres of environmentally sensitive coastal land near Huntington Beach. Richard Ortwein, previously regional president of the Newport Beach office of Koll Co., will be president of the new company.
Top Koll executives have controlled publicly traded Bolsa Chica Co. since March. Thursday’s acquisition was seen by analysts as a way for the Newport Beach developer to take one of its own divisions public without going through the long, costly process of filing for an initial stock offering.
“It’s as if they are selling a ring on one hand to the other hand,” said Mark Matheson, an analyst with the brokerage Crowell, Weedon & Co. in Los Angeles.
“If I were a Bolsa Chica shareholder, I’d like to see the two combined, then I’d know all my apples were in one basket,” said Matheson, who follows Koll Management Services, Koll’s publicly traded property management division.
Don Koll, chairman of Koll Co., said of the acquisition: “Bolsa Chica needed a business. It holds a lot of land. We’ve chosen to make it a developer.”
His company’s strategy, Koll said, “was to sell our development division to this public company we run.”
Bolsa Chica Co.’s stock is traded on the Nasdaq market. The acquisition was announced after the market closed and did not affect the price of the company’s stock, which ended the day at 16 cents a share, unchanged.
Don Koll said that the merger may facilitate winning approval for the controversial Bolsa Chica project, which would build 4,900 homes, townhomes and condominiums on 400 acres surrounding the wetlands.
The plan has drawn vehement criticism from environmental and public interest groups concerned about the protection and preservation of the area.
“Instead of having an absentee owner, now the person who owns the land is the developer,” Koll said. “It makes it more personal and up close. I think it’s easier from the public’s standpoint because they are dealing with just one person.”
Adrianne Morrison, executive director of Amigos de Bolsa Chica, an 18-year-old environmental group dedicated to protecting the wetlands, agreed with Koll.
“I think people here have a lot of respect for Don Koll, and I can see where having one entity would diminish some of the confusion,” she said. An environmental impact report on Bolsa Chica is expected this month, she said.
As part of the transaction announced Thursday, Koll Co. agreed not to compete with Koll Real Estate Group Inc. in domestic real estate development.
Since June, 1990, Koll Co. has managed most of Bolsa Chica Co.’s real estate assets, including the Huntington Beach site and Eagle Crest, a golf-oriented residential development of more than 500 homes in Escondido.
The new company will control Lake Superior Land Co., a Bolsa Chica Co. subsidiary that owns 300,000 acres of forest lands and more than 90 miles of shoreline property in Michigan and Wisconsin. It will also pursue plans by Bolsa Chica Co. for a development in Wentworth By The Sea, N.H.
In March, Bolsa Chica Co. announced a restructuring in which its top executives resigned, ceding management of the company to the chairman and president of Koll Co. It also moved its headquarters from Hampton, N.H., to Newport Beach, where Koll Co. is based.
