The decaying former headquarters of aviation giant Howard Hughes will be turned into an office campus for creative tenants as part of a $50-million makeover of the famous operation at Playa Vista.
The complex includes the enormous hangar where Hughes built his infamous Spruce Goose airplane but is now used mostly as a sound stage for movie and television production. The seven-story structure will be upgraded to contain five sound stages that could be used simultaneously, new owner Wayne Ratkovich said.
Ratkovich, a Los Angeles developer who specializes in renovating historic buildings, expects to complete a $32.4-million purchase of the former Hughes property Friday . His company, the Ratkovich Co., and his financial partner, Penwood Real Estate Investment Management, are buying the 28-acre parcel out of foreclosure from a consortium of lenders led by KeyBank.
The property is occupied by 11 buildings, including the hangar, most of them from the years around World War II when Hughes operated his Hughes Aircraft Co. in the area south of what is now Marina del Rey. It was there that Hughes set out to build a seaplane capable of carrying 750 fully armed soldiers nonstop from Honolulu to Tokyo.
Among his many challenges was the fact that no plane that big had ever been built, and he couldn't use materials considered crucial to the war effort, such as aluminum, to make it. He decided to use wood and settled on birch, which made the popular nickname "Spruce Goose" irksome to him.
The plane, officially dubbed Hercules, sported a 320-foot wingspan, weighed 200 tons and flew only once — for about one minute — in 1947.
The airplane has been gone since then and now resides in a McMinnville, Ore., museum. But the vast redwood hangar where it was built is still in demand as a sound stage and generates about $1.3 million a year in rent from filmmakers, Ratkovich said. Much of director James Cameron's 3-D epic "Avatar" was shot there.
In a nod to Hughes' storied seaplane, Ratkovich will call his new development the Hercules Campus. He plans to divide it into three smaller complexes connected by landscaping. Targeted tenants include media, entertainment and technology companies, Ratkovich said.
"We want those kind of firms that are looking for unconventional space," he said. "That's what these buildings represent."
Los Angeles architect Brenda Levin, who worked with Ratkovich on his transformation of several other historic properties, is designing the new campus.
Crews will immediately start cleaning up the site, Ratkovich said, and put new roofs on every building but the Spruce Goose hangar to make sure they are waterproof. Engineers will be tasked with making the buildings energy efficient.
"We hope to use fuel-cell technology and solar technology with the long-term goal that entire complex will be off the grid someday," Ratkovich said. "This site makes you want to reach, and we are going to reach."
The makeover will take up to three years to complete, he said, but may happen sooner if demand for the 225,000 square feet of office space is strong. Except for periodic use by film crews, the buildings are empty.
Offices at Playa Vista have periodically experienced high vacancy since the first new office building after the Hughes era was completed in 2002. Last year, Fox Interactive abandoned plans to move into 420,000 square feet of office space in a new Playa Vista building owned by Lincoln Property Co., and overall vacancy in the area is more than 25%, well above the rest of the Westside.
Hercules Campus will be different enough to stand out, said real estate broker Jeff Pion of CB Richard Ellis, who represents Ratkovich.
"These [buildings] are unlike anything else on the market," he said. "They will have a low-rise campus feel with a historic preservation aspect."
The former Hughes properties are in roughly the middle of Playa Vista, a 464-acre planned community. The first phase of more than 3,200 homes is virtually complete, and the community has more than 6,500 residents, along with shops, parks, a fire station, a library and an elementary school under construction. Playa Vista has more than 1 million square feet of office space and has room for an additional 2.2 million square feet.
Other historic properties renovated by Ratkovich include the Oviatt and Fine Arts buildings in downtown Los Angeles, the Wiltern Theater and the Alex Theatre in Glendale. He also has made over the former C.F. Braun & Co. office campus in Alhambra and, most recently, a 30-story high-rise at 5900 Wilshire Blvd.
"We have become good students of some of the best engineering and construction techniques in restoring these buildings," he said.
"Wayne Ratkovich is well-known for his sensitive restoration of historic buildings in Los Angeles, and we welcome him to the community," said Patti Sinclair, co-president of Playa Vista.
Also expected to close Friday is the sale of 10 acres of Playa Vista to Dallas-based Lincoln Property Co. The parcel, with entitlements for 550,000 square feet of office space, was formerly owned by New York developer Tishman Speyer.
In August, Tishman bought back 19 acres at Playa Vista it had owned before defaulting on a loan in 2009. That land is also zoned for office development.