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O.C. BUSINESS PLUS

Los Angeles Investment Firms Buy Former S&L Complex in Costa Mesa

Real estate: Site of defunct Pacific Savings Bank sells for $18.5 million.

April 11, 2001|DARYL STRICKLAND | TIMES STAFF WRITER

A group including two Los Angeles-area investment firms has acquired a prominent Costa Mesa office complex for $18.5 million and plans to renovate the mission-style buildings for office and retail use.

Beverly Hills real estate investment company Kennedy-Wilson Inc. and Hudson Properties in Pasadena acquired the complex, former headquarters of the now-defunct Pacific Savings Bank, from Los Angeles businessman Nickolas N. Shammas. He bought it seven years ago for $10.75 million from a federal agency liquidating bankrupt savings and loans.

The three-building complex, which includes a historic schoolhouse, has ornate interiors with teak wood, a three-story beveled glass atrium, carved stone, a grand staircase with intricate balustrades and seven fountains. The new owners have renamed it "1901 Newport Plaza."

The complex, which the city considered using as its City Hall last year, has been mostly vacant since the government's Resolution Trust Corp. moved its Western headquarters out in late 1991.

Lew Halpert, president of the investment group for Kennedy-Wilson, said the company viewed the site as a trophy property.

"It was an opportunity to buy an asset that's been underutilized for 10 years," Halpert said. "Our plan is to . . . get it performing the way it was supposed to be."

The main building has 143,000 square feet, while two smaller structures together provide about 5,000 more square feet.

One tenant has tentatively agreed to lease 20% of the space, Halpert said. He would not provide a name.

The mix of occupants will be determined by tenant interest, Halpert said. Although office tenants could occupy the entire complex, street-level space could be set aside for such tenants as retailers and restaurants, he said.

The three-story headquarters of Pacific Savings was built in 1982. The building, which won accolades for its design, was part of downtown Costa Mesa's renovation plans in the mid-1980s as the Costa Mesa Freeway was completed nearly to the doorstep of what was then the Pacific Savings Plaza. Across the street, developers built Triangle Square shopping center.

Pacific Savings, like many thrifts at the time, used liberal state laws to invest in real estate and provided itself with opulent quarters. As debts outran its income, federal regulators seized the thrift and ran it for a brief period before closing it down and selling its assets.

Workers now are repaving lots, repainting walls and making other cosmetic improvements to spruce up the building. The renovation is expected to be completed within 60 days, Halpert said.

The investor group has a third partner, but Halpert would not disclose the name.

Shammas, the Southern California auto dealer and real estate investor, could not be reached for comment.

Shammas hoped to find a single lessor for the building, but could not agree to terms with potential occupants, said Chris Deason of Voit Commercial Brokerage, who represented Shammas in the sale.

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