Fluor Planning Move to Aliso Viejo
Fluor Corp. said Tuesday that it is moving its Irvine headquarters south to a new, smaller complex in Aliso Viejo to cut $10 million in annual costs.
The construction and engineering giant has reached an agreement with the Mission Viejo Co. to acquire two sites totaling 30 acres on opposite sides of the San Joaquin Hills Corridor. One of the sites will house Fluor’s corporate administration and the other will house its Southern California engineering and construction operations.
A groundbreaking is set for early next year. Fluor plans to move when its current lease expires in mid-1999.
Fluor started considering other options for its headquarters more than a year ago. It looked at sites in Santa Ana and Irvine, and continued to negotiate with its Park Place landlord until recently.
A little over a week ago, the company told its employees that it would move its headquarters out of the landmark building and it was rumored that the company had struck a deal in Aliso Viejo. Fluor, which currently occupies 675,000 square feet at its sprawling Park Place complex near Jamboree Road and the San Diego Freeway, will be cutting its space by 35% when it moves its 2,400 local employees.
Fluor officials say the building, which it built for its headquarters 20 years ago, no longer fits the way the company does business.
“If you look back 20 years ago, there were rows and rows of people sitting at drafting tables,” said Linda J. Delaney, a Fluor vice president and general manager of the Irvine office.
Today, she said, most of the company’s work is done on computers and in small teams.
“We have a whole different culture now on projects,” Delaney said.
Fluor officials say the company chose the Aliso Viejo site because of its access to the San Joaquin Hills toll road and because more than 60% of its employees live in South County. Mission Viejo Co. officials say the company’s move should boost the value of commercial properties in the area and create a larger demand for housing.
Fluor has selected architect McLarand Vasquez & Partners Inc. of Costa Mesa to design the new campus. Santa Monica-based Lowe Development Corp. has gotten a tentative nod to develop the campus, once Fluor officials find a financial partner to build the project and lease it back to the company.
Fluor’s relocation will throw a huge amount of space back onto the office market, a move that analysts say could dampen rental rates in the booming John Wayne Airport area. It also leaves Park Place’s owner, Crow Winthrop Operating Partnership, with a lot of space to fill.
Janine Padia, general manager of Park Place, acknowledges Fluor’s decision to relocate will have a big financial impact on the building.
But demand for office space is brisk, she said, and most of the space could be leased by the time Fluor departs.
Crow filed for Chapter 11 bankruptcy recently and plans to reorganize by ceding a 90% stake in the project to a real estate investment trust made up of its debt holders. Padia said the restructuring was based on the assumption that Fluor would not be renewing its lease.
