College to Lease Site to Builder

In search of extra income, Coast Community College District trustees have voted to lease land at their Costa Mesa headquarters for $1.8 million a year to a Lake Forest developer for a 250-unit apartment complex.

The offer from Advanced Real Estate Services Inc. was the highest among 14 bidders at Wednesday’s trustees meeting. Advanced’s original bid was $900,000 annually for the 55-year lease, which was the minimum the district said it would accept. Silverwood Investments offered nearly $1.3 million, the highest original bid.

The meeting turned into an auction, with developers increasing their bids by 5% until Advanced’s last offer went uncontested.

The spirited bidding contrasted with how the district sold its Public Broadcasting Service station, KOCE-TV Channel 50, to a foundation led by a group of Orange County businesspeople. In that case, the district enforced strict rules about deadlines and accepted only written offers.

For the land lease, Advanced won out over better-known developers such as Casden Properties, Trammell Crow and United Dominion. “It was higher than I hoped it would go,” said Rick Julian, co-owner of Advanced.

Advanced owns about 4,000 apartment units, most of them in Orange County, Julian said.

Although trustees had previously discussed leasing district land for commercial development, the state’s budget problems pushed Coast to pursue other revenue more aggressively. The college district recently was placed on a state fiscal watch list because its reserves dropped to an unacceptably low level.

The 14-acre site, at Adams Avenue and Pinecreek Drive near Harbor Boulevard, holds temporary office buildings.

The district plans to move its headquarters to the Orange Coast College campus.

Jerry Patton, vice president of Palomar College in San Diego County and head of a group of community college business officers, said it is unusual for those colleges to build apartments, because few have excess land.