CSUN’s Green Acres : Parcel Quickly Grabs Developers’ Interest; Development Could Mean Windfall for University

Six weeks after publicizing plans to develop a 63-acre patch of campus, officials at Cal State Northridge have been flooded with inquiries from curious developers, including one representing Wal-Mart Stores Inc. a top university official said.

“There’s interest being expressed by literally dozens of folks,” said Elliot I. Mininberg, chief financial officer of the North Campus / University Park Development Corp., a nonprofit affiliate of the university. The campus site, known locally as Devonshire Downs, is bordered by Devonshire and Lassen streets, and Lindley and Zelzah avenues.

Norman J. Kravetz, best known for his Trillium development in Warner Center, also made inquiries about the campus site, Mininberg said.

Lowe Enterprises, a Brentwood firm that was bidding to take over the site of the former General Motors plant in Panorama City, has also signaled interest, according to John Rollow, development consultant on the project. In addition, representatives of Koll Construction Co. of Newport Beach and Overton-Moore & Associates in Gardena have contacted CSUN about the project, Rollow said.

The university is drafting a formal request for proposals, which it expects to pass along to the Board of Regents for approval next month, and to publish by mid-August.

“One of the options is for someone to take on responsibility for the whole thing and develop it in a sequential way,” Mininberg said. But the possibility of leasing the land in smaller segments to a number of developers remains open.

University officials envision an upscale retail-office complex with a potential for housing as well. Preliminary plans call for tearing down the University Tower Apartments, which were heavily damaged by the earthquake, Mininberg said. The nearby University Village Apartments would also be demolished, but would be rebuilt close by. The university’s football-soccer stadium would also be torn down and replaced farther south, he said.

CSUN could reap a windfall of hundreds of thousands of dollars annually through a long-term lease to a developer, who would assume all construction and operation costs. Although the university has no strong projection of potential income, projects of this type elsewhere have garnered $40,000 to $50,000 annually per acre, according to Rollow.

Enthusiasm over the early interest, however, is blunted by the memory of disappointment. Three years ago, a similar, $200-million development plan by Watt Investment Properties Inc. of Santa Monica fell through amid souring economic conditions and planning battles. Only the housing element of the Watt development was constructed, and has proved an economic burden to the university, according to Mininberg.

This time around, the university believes it has a better climate for the project, given Mayor Richard Riordan’s efforts to promote business in the Valley. Officials are heartened by the involvement of the mayor’s office in General Motors’ site negotiations, as well as efforts to fill the former Hughes Missile Division site in Canoga Park and to keep Coast Federal Bank from relocating outside the area.

“I think the city will be interested in us succeeding rather than failing,” Mininberg said. “I think clearly we’re going to have an economic environment in general and a political environment in particular that is going to make this a little easier.”

The mayor’s office already has become involved, spreading the news about the campus site, although thus far in a low-key way, said Miriam Jaffe, a business development representative with Riordan’s Los Angeles Business Team.

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Placing a store as big as Wal-Mart at the edge of the sprawling campus, which is surrounded by residential property, is not favored by university officials who have concerns about the size of the store as well as the traffic it would generate. A draft request for proposals explicitly discourages large, warehouse-style structures that such stores tend to occupy.

“The university’s priorities have been tentatively discussed, and at the moment we are not interested in what we refer to as a box--these large retail sites that are basically a warehouse or box,” Mininberg said.

Both university President Blenda Wilson and Vice President for Student Affairs Ron Kopita expressed reservations about retail-dominated development of the parcel.

Retail development is “much less interesting” than professional offices and research space, said Wilson, who suggested that developers interested in other approaches could easily be found. “If you approach developers with mainly retail experience, that’s what you’re going to get back.”

But Rollow, the development consultant, said developers can conform their plans to the smaller “village street” concept envisioned by the university and still accommodate large retailers. For example, a large Hughes Market managed to open in the heart of Santa Barbara’s restored downtown district, where small and quaint are the operative words.

Thus far, Rollow said, most of the interest in the CSUN property has come from developers involved in retail complexes. Despite reservations by faculty and students who frown on such development on campuses, economic conditions make retail the most likely option.

There are only a handful of sites in the Valley that can accommodate tenants who need more than 100,000 square feet of space, Rollow said, so such companies’ interest is keen in both the Northridge site and the former General Motors plant.

“There’s only a few of these parcels left in the city,” Rollow said. “There’s not a lot of large properties left, and that’s what companies like Wal-Mart want.”

So despite the university’s reservations, Rollow expects Wal-Mart to submit a proposal.

The giant discount chain has been interested in finding a location in the San Fernando Valley for several years. The company, whose nearest store is in the Antelope Valley, is one of four finalists in the running to take over the site of the former General Motors plant. Before that, Wal-Mart had considered a property in Burbank.

Wal-Mart officials in Bentonville, Ark., said they do not comment on potential store sites until they are confirmed.

Whatever is built on the land, it will have to be “university in character,” Mininberg said. The early draft of the request for proposals suggests retailers such as quality book-sellers, specialty foods, office products, electronics and student-run business partnerships.

Under plans outlined in the draft proposal request, the retail center would be located along the south side of Devonshire Street on about 18 acres of land, and extend 700 feet into the property. Office buildings south of the retail complex would be built to a maximum of 25,000 square feet and designed to minimize large expanses of bare walls. Among the possibilities in that same area are a hotel and convention site.

The residential element is far more sketchy. The amount of land reserved for housing is not outlined in the draft, which bluntly acknowledges that “a market for residential development is not now evident.”

On-campus residency has consistently fallen below CSUN’s projections, causing a financial drain, according to Rollow and Mininberg.

In part, plans for developing Devonshire Downs will be influenced by what is built on the site of the former Coast Federal Bank administration building at Zelzah Avenue and Chatsworth Street. Although plans to put a Home Depot store on the site were scrapped after opposition from the community, development on the site could serve as competition to whatever is built on campus.

“It’s expected the site will develop over a period of time,” Rollow said. “The problem is finding a developer who will take the first phase and follow through.”