Developers Set Their Sites on Abandoned Plants, Refineries

At the former General Motors plant in Van Nuys where Camaros and Firebirds were once assembled, construction crews are busily remaking the factory into another American icon--a shopping center.

In Santa Fe Springs, a former oil refinery is being converted into industrial warehouses. In Torrance, buildings have been razed at a former McDonnell Douglas aerospace facility to make way for an auto dealership, a shopping center and more warehouses.

Throughout Southern California, the improving economy and related commercial real estate revival are infusing new life into long-stagnant properties.

“The General Motors plant might have sat there forever had there not been a significant upsurge in job growth and a return of capital for development,” said Robert D. Voit, president of Voit Cos., which is developing the site in a joint venture with Selleck Development Group Inc., led by Daniel F. Selleck. GM made cars there for more then 40 years before shuttering the plant in 1992.

Moshe Sassover, a senior vice president at Golden West Refining Co. and manager of Golden Springs Development Co., which is razing the Santa Fe Springs refinery for a development called Golden Springs Business Center, sounded a similar theme.

“Without the economics and the industrial leasing activity in this area, it would have been difficult for us to find another use for this property so soon,” Sassover said. Golden West shut down its oil terminal operations there a year ago, after Golden West’s parent company leased its Thrifty gas stations to Arco.

Golden Springs Development, which expects to complete its first building in October and finish a second, 426,000-square-foot warehouse by the end of the year, has entitlements to build up to 6 million square feet of industrial space on the site of the former refinery at Imperial Highway and Carmenita Road.

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Like the old GM plant and the former Golden West refinery, many of the properties now being converted were developed to serve what were once Southern California’s core industries. One of the industries expected to continue giving up sites for such development is aerospace, thanks to that industry’s consolidation.

Among those sites is 170 acres on 190th Street in a portion of Los Angeles bordering Torrance. The site was a tooling operation for McDonnell Douglas before its merger with Boeing, according to Terry Reitz, a senior vice president with Grubb & Ellis Co., which is marketing the land to users and developers.

Reitz said the aerospace buildings have been razed on the first, 85-acre phase of the development, which will devote about one-third of the land to retail uses and the remainder to industrial warehouse buildings. He said the retail portion will include an AutoNation used-auto dealership as well as an Office Depot, an extended stay hotel and some smaller shops.

“It’s basically a regeneration of this old property into upscale, modern uses,” Reitz said, explaining that the conversion was prompted by the growing demand for modern industrial space in the South Bay, where relatively little new space has been built in recent years.

These large-scale projects are just the biggest and most visible examples of the conversions and rehabilitations occurring at all types of obsolete properties, according to Jack Kyser, chief economist at the Economic Development Corp. of Los Angeles County.

The make-overs range from old industrial buildings being converted to sound stages in the San Fernando Valley, to old downtown Los Angeles office buildings being refurbished, to “a lot of dormant projects that are springing back to life” after being shelved during the downturn, Kyser said. He said the conversions add jobs to the Southern California economy and increase the worth of the properties, many of which declined in value during the downturn.

Developer Voit said properties are being converted to new uses despite the movement by some businesses out of Los Angeles to new, undeveloped lands in the Inland Empire, Lancaster, Ventura County and other places far from L.A.’s core.

“The trend for development to move to outlying areas will continue for many decades, but we will also continue to see a transition in existing areas,” he said. “The eastern part of the San Fernando Valley is typical of this. It was extremely vital in the 1950s, but now it’s among the older areas that need to be revitalized. Part of that revitalization is providing facilities to meet the needs of the people there.”

The Voit-Selleck project at the former GM factory is known as “The Plant.” It will include 35 acres devoted to retail space, about 95% of which has already been leased. Tenants will include Home Depot, a 16-screen Mann theater complex, Babies R Us, Ross Dress for Less and other retailers. The remainder of the site is being developed for manufacturing and warehouse operations, including a 200,000-square-foot manufacturing facility and corporate headquarters that has been leased to Ricon Corp., a wheelchair-lift manufacturer.

Voit, who built much of Warner Center in Woodland Hills, said the conversion of the former GM plant was possible in large part because the property was held by one owner, General Motors.

“Had it been owned by 20 different people, a developer would find it virtually impossible to get them all lined up at the same time at an appropriate price,” Voit said. “Once the property owners in an area are aware that someone is trying to assemble a parcel, somebody is invariably a holdout or asks for twice what the property is worth.”

Voit said the development team first considered trying to retain the former GM site as a factory or to convert it to a shopping mall by using the existing structure, but decided that neither of those options would work.

“When a building is used for just one use for [almost] 50 years, there are so many changes in that space of time in terms of technology and taste, that it’s rare for a commercial or industrial building to survive without needing substantial revitalization,” he said. “Taking a property that is in disrepair or disuse and bringing it back to life is one of the most satisfying experiences [for] a developer.”

Many of the conversions today are driven by fast-growing demand for the huge, modern warehouses such as those being built at the former Golden West refinery, where some of the oil storage tanks now being razed are more than 70 years old. They are making way for modern warehouses with considerably higher ceilings, larger turning areas for trucks, more efficient fire sprinkler systems and other improvements over the outdated space sitting empty in many older industrial areas.

But ultimately, according to Voit, no one can anticipate all the needs of future users of commercial space.

“Fifty years from now,” he said, “someone will probably come along to the General Motors plant we’re redeveloping and find this tired retail facility and aging industrial buildings. And if the economic conditions are right, they’ll retrofit them again.”