REAL ESTATE NEWS

A developer, which planned to demolish a nine-building corporate center in the Irvine Business Complex (IBC) and replace it with a 541K square foot warehouse has reached a deal with the city to build housing on the site instead.

Last month, the Irvine City Council postponed a vote on the huge industrial complex that Von Alton LLC was planning for a 25-acre site at Von Karman Avenue and Alton Parkway after concerns were raised that the project would jeopardize Irvine’s plan to build 15,000 residential units in the IBC to meet its state-mandated goal for new housing.

“The whole idea of creating walkable communities is absolutely destroyed by a warehouse complex that’s an entire square block,” Mayor Larry Agran said.

Agran and several city council members indicated last month they might consider banning large warehouses in Irvine like Von Alton’s project, which was approved by a 3-2 vote of the city’s Planning Commission in November, the Orange County Register reported.

An attorney representing the developer told the council last month that it has no jurisdiction to overturn the Planning Commission’s approval of a master plan modification allowing the industrial use because no appeals were filed to challenge that decision.

At last week’s council meeting, the city announced it has reached a deal with the developer, the Register reported.

According to the report, the city has agreed to grant Von Alton an industrial entitlement for the IBC site, which the developer said will boost the value of its property, and the developer has pledged to build housing there instead of the 100-bay industrial complex.

At the council meeting on Feb. 11, city manager Oliver Chi said he expects the revised project to be finalized and brought back to the council for consideration by late September. However, Chi acknowledged that the deal has some risks.

He said at the meeting, “It’s great to have good intentions, but what guarantees does the city have that this project will come to fruition?”

If the deal for housing unravels, Chi said the two parties have agreed to a backup plan that would allow the city to purchase the 25-acre IBC site for $12.5M per acre, which works out to about $318M, minus a $2.5M fine the developer would have to pay the city.

In October, the Irvine City Council approved rezoning that opens up the Irvine Business Complex to high-density housing as part of the city’s state-mandated eight-year housing element plan, which requires Irvine to plan for 23,554 new homes by 2029.

The council voted 4-1 to rezone the IBC to permit up to 15,000 residential units in the 2,700-acre business district, which is adjacent to John Wayne Airport (JWA).

The rezoning overrode an Orange County Airport Land Use Commission ruling that deemed housing “inconsistent” with a land-use plan for the areas surrounding JWA due to concerns about aircraft noise and safety.

In January, the city council voted to direct Chi to present them with a proposal for new warehouse development regulations this month.

In September, Gov. Gavin Newsom signed Assembly Bill 98, which mandates minimum distances between new warehouses and residential areas in California.

The new law requires that truck-loading bays of warehouses that are 250K square feet or larger must be situated at least 300 feet away from the property lines of homes in industrial-zoned areas and 500 feet away in non-industrial zones.

Source: GlobeSt/ALM