Rand to Review Plans for Its Santa Monica Site
Rand Corp. is about to review final proposals from developers interested in buying or co-developing the strategically located Santa Monica Civic Center property that the nonprofit think tank has owned for nearly half a century.
Rand has hired New York-based real estate investment banking firm Eastdil Realty to review proposals from eight to 12 developers with whom Rand has discussed plans for the nearly 16 acres of prime real estate surrounding Rand’s Main Street headquarters complex, spokeswoman Iao Katagiri said Wednesday.
While the winning developer would almost certainly build an expanded Rand headquarters and adjacent multi-tenant offices and multifamily housing, the ultimate financial relationship between Rand and the developer is a key consideration in the Eastdil team’s reviews over the next several weeks, Katagiri said.
“We aren’t necessarily offering to sell the property; that’s one option among many possibilities,” she said.
“The bottom line is that we’d like the developer to develop the entire parcel as an integrated mixed-use project that includes our headquarters.”
Katagiri declined to estimate the value of the property, noting that Eastdil will help determine a price as it works with candidate developers. She also declined to identify any of the developers, although she acknowledged that Rand has maintained a longtime consulting relationship with Houston-based Hines Interests.
Development of the property--generally between Ocean Avenue and Main Street south of the Santa Monica Freeway and north of Pico Boulevard--would complete a controversial pursuit Rand began nearly a decade ago.
It took a citywide referendum in mid-1994 to approve an overall redevelopment plan for Santa Monica’s aging 45-acre civic center, a plan that includes substantial funding from Rand as well as rights to expand the Rand headquarters and add the commercial and residential developments on the think tank’s property.
Rand’s position has been that it needs to develop the property, which houses about 1,000 employees, to help ensure its financial stability.
In conjunction with the civic center redevelopment plan, Rand agreed to pay nearly $15 million of the estimated $27 million to be spent upgrading the district’s roads, sidewalks and other infrastructure. The plan established design and zoning policies for the civic center make-over, which entails converting surface parking lots into a park, walkways and low- and medium-income housing.
In October, the city’s Planning Commission approved plans for a $32-million headquarters facility for Santa Monica’s police and fire departments as part of the civic center master plan.
In addition to the headquarters expansion of up to 200,000 square feet, Rand’s property is approved for 250,000 square feet of offices, neighborhood retail space and the 350 multifamily units--a third of which must be affordable to low- and moderate-income residents.
Considering the resurgence of the Westside’s commercial real estate market during the last two years, the property would probably fetch substantially more today than it would have during the recessionary early 1990s. Santa Monica boasts one of Southern California’s strongest office markets, with minimal vacancies, rising rents and scant new development approved.
Santa Monica-based office broker Bob Safai noted that downtown Santa Monica office rents have surged 25% over the last year and that ocean-view offices, such as those planned for the Rand property, command a substantial premium. “A low-rise feel along with downtown’s amenities is exactly what [tenants] are looking for today, so the timing is perfect” to develop the Rand property, the Madison Partners principal added.
