Developers at Home With GM Site’s Risks

About a quarter-century ago, when what is now Warner Center was cornfields and cow pastures, a young real estate developer named Robert D. Voit heard about the Warner family’s plans to turn its land into an urban center with shopping malls, offices, condominiums and manufacturing.

“I thought, ‘Isn’t that a bizarre idea? How could one be so crazy as to dream of high-rises in the middle of cornfields?’ ” Voit recalled. Back then, the suggestion of such a development as far west as Woodland Hills was simply unheard of.

But it didn’t take long for Voit to come around. In 1974 he and his partner, New England Mutual Life Insurance Co., acquired a big chunk of the Warner Ranch property--about 220 acres.

Today, more than any other person, Voit is credited with creating Warner Center and its gleaming towers of steel and granite. The Woodland Hills business park is now considered the prestige white-collar address in the West Valley. Voit, 55, personally owns part of about 20 buildings in Warner Center, and his Voit Cos. manages more than 40 of the center’s buildings.

Now Voit plans to turn his developer’s skills to a different, though no less formidable, task: transforming the old General Motors manufacturing plant site in Panorama City into a new hub of business activity. Voit and partner Selleck Properties have agreed to buy 68 acres from GM and plan to erect a $75- to $100-million mixed-use project that will include retail and industrial buildings and a movie theater complex.

Voit and the Sellecks--including actor Tom Selleck, his father and brothers--will own, develop and manage the project. The Sellecks will focus on retail, while Voit will concentrate on industrial development.

Though redeveloping the site of a former auto plant in an older, run-down neighborhood would appear a far different task than creating a pristine urban center in an undeveloped area, Voit said the new project is merely “a different variation on the same theme.” Any real estate project boils down to trying to fit the development to the area and meeting the needs of prospective tenants and the community, he said.

Observers in the real estate business say that Voit--with his developer’s instinct and business acumen--is just the man for the job. While the Sellecks have the famous name, it is Voit who brings to the partnership a sterling reputation in business and real estate circles. And it is Voit’s involvement, they say, that lends the project credibility.

Bob Voit “has a lot of foresight and the ability to see what the market needs in the future,” said Jim Flynn, a managing director of Copley Real Estate Advisors, which represents the owners of many Warner Center properties that Voit Cos. manages. Voit Cos. has “been a survivor and actually flourished through the downturn in California, which is a tribute to their abilities.”

Seth Dudley, senior vice president in the Los Angeles office of Julien J. Studley Inc., a commercial real estate brokerage, credited Voit for changing his firm’s focus when the local real estate market headed into a long recession around 1990. With speculative development nearly impossible to finance, Voit Cos. segued from developing for its own portfolio into managing properties for others.

“When Voit started out, you could basically tie up a piece of land with someone else’s money and own half of it,” said Dudley. “The game has changed and what we think of as developers now are really people who for fees build and sell for people who own, who are often banks and pension funds. [Voit has] done such a good job of adapting to a changing environment.”

Voit is also considered particularly astute in the way he financed the Warner Center developments, said Michael Zugsmith, chairman of Capital Commercial Real Estate, an Encino-based commercial real estate brokerage. Many developers simply borrow money for a project, preferring to keep 100% of the equity for themselves. Instead, Voit brought in an equity partner. While it limited his ownership stake, it also protected him when the market turned south.

“The greedy developer ends up losing his building,” said Zugsmith. “Voit ends up on his feet and smiling.”

Zugsmith also credited Voit for pinpointing a demand for top-notch commercial development loaded with amenities and tenant-friendly services. He designed his Warner Center buildings with great outward appeal and lavished tenants with day-care facilities, carpooling and security services, recycling centers and sporting and cultural events. By offering the highest-quality product, Voit helped protect himself during the downturns, Zugsmith said.

But Voit is also no stranger to the less urbane world of industrial development. Besides some light industrial buildings in Warner Center, he has built and managed manufacturing facilities in Sacramento and has an industrial project in Arizona.

Dudley said that Voit should have little trouble finding industrial tenants for the project. “I’ve been trying to find a 50,000-square-foot industrial building in that area. It just doesn’t exist.”

Yet, just as he was when Warner Center was in its infancy, Voit was initially somewhat skeptical about the GM property. After further study, however, Voit concluded that “you can’t survive in a sea that’s gone down. Warner Center will not thrive and prosper if the whole Valley goes down.”

Then Voit got wind that the Sellecks were also interested in the property, and that piqued his interest further. Robert Selleck, Tom Selleck’s father, was Voit’s boss in the 1960s, when Voit was a commercial real estate broker in Sherman Oaks. And for a decade, the Voit and Selleck companies have had offices across the hall from each other in Warner Center.

“We always ran into each other in the hall,” Voit said. “It was always, ‘Let’s do a deal together sometime.’ ”

Voit expects escrow to close this summer--providing that tests show that no toxic substances remain after the environmental cleanup is completed. He said he will turn to his usual list of banks, pension funds and insurance companies for financing. If everything goes as planned, the facilities could open in summer 1997.

While acknowledging that the project carries plenty of risks--including the potential for another market fallout, interest rate increases and natural disasters--Voit said that he thrives on the nail-biting aspects of development.

Yet he exudes an outward air of calm and confidence. A Malibu resident since the ’94 earthquake damaged his Woodland Hills condominium, Voit is tan and fit. He readily admits he’s no workaholic. Voit was raised in Arcadia. After graduating from UC Berkeley he went to work as a commercial real estate broker specializing in the Valley office market. In 1971, he started his own company. His 25-year-old daughter Katherine now works for him and will someday take over the business, he said.

When he was helping develop Warner Center--envisioning it as the regional headquarters for insurance, health-care, law and accounting firms that it is today--Voit faced his share of skeptics. “Many people thought we were nuts,” he said. “I did have my days when I thought they were right.”

Now, Voit expects to encounter some doubts about his ability to revitalize an area where liquor stores and graffiti abound--where the pullout of GM’s manufacturing operations in 1992 exacerbated the long-term decline of surrounding neighborhoods.

But Voit has a developer’s unending optimism. “I think the city and the Valley, and that particular part of the Valley, have heard enough about the downers, whether it’s the earthquake, the riots or plant closings,” he said.

This project is an “example of our faith in this community.”