ANAHEIM — City officials Tuesday approved the $2-million sale of 16 acres of vacant downtown land to the Koll Co., which plans to build office towers, a hotel, parking garages and a movie theater in the next decade.
The property's price tag is far less than the $15 million the city paid to acquire the land in several transactions some time ago. But city officials said they were pleased to sell the property to a developer after it sat empty for 17 years.
"We'll take less for the land now," said Elisa Stipkovich, the city's director of community development, "but in the very end . . . we will come out ahead."
Steve Layton, Koll Co. vice president for development in the Newport Beach division, described the purchase as "a very competitive deal." The project is called Anaheim Center.
Koll Co. had been considering a development in downtown Anaheim for several years, Layton said, but was waiting for a corporate tenant to commit to the site.
That turned out to be Pacific Bell. In the project's first phase, the company will have Koll build an eight- or nine-story office tower. Construction will begin in August or September, and Koll will sell the completed 200,000-square-foot building to Pacific Bell for about $16 million.
About 1,000 Pacific Bell employees will move into the new building that will become the company's regional marketing headquarters. "We thought this was a natural," Layton said.
The other building to be completed in the first phase of the project is a 10-story, 200,000-square-foot office tower for Anaheim's public utilities administration. Three parking garages will also be built in the initial phase.
Once the first phase of Anaheim Center is completed in 1992, Layton said the pace for developing the rest of the property will depend on commitments from prospective tenants. Koll Co. officials said they were not discouraged by the fact that the only other office tower downtown, the First Interstate Building, remains partly vacant more than two years after opening, Layton said.
"We do not plan to build any spec (speculative) office space in downtown Anaheim," Layton said. "If there's no tenant, there's no building. But we don't think that's going to be a problem."
The entire development, bounded generally by Anaheim Boulevard, Lincoln Avenue, Broadway and Harbor Boulevard, will be completed over five to 10 years, he added.
Reed L. Royalty, area vice president for Pacific Bell, said his company was attracted by the opportunity to expand within Anaheim Center as well as the quality of the Koll proposal. "We wanted a good place for our people to work," Royalty said. "We found it here."
Additionally, Royalty said Pacific Bell will save $15 million to $19 million in leasing costs over the next 40 years.
As for the city, officials said they are glad the downtown area that has been vacant for 17 years will finally come to life.
"We all have lived here many, many years and have looked at that empty space, hoping someday . . . ," Anaheim City Councilman Irv Pickler said. "Good things are worth waiting for."
Councilman William D. Ehrle added, "To all of us, it's a dream come true. And I say, let's start digging in the dirt."