Hilco Development Services placed a winning bid of $177 million for the Chet Holifield Federal Building in Orange County, California, and plans to demolish the landmark structure for a new project.
The U.S. General Services Administration launched an auction for the 1.1 million-square-foot, ziggurat-shaped building in June, starting at $70 million. The auction closed on Oct. 24. Hilco is the winning bidder, firm principal Cameron Hildreth told CoStar News.
The GSA has processed Hilco’s deposit of $17.7 million “and we’re locked in,” Hildreth said. The acquisition includes the main building at 24000 Avila Road, several auxiliary buildings and the surrounding 92 acres.
Hilco, based in Long Beach, is exploring potential financing options with outside firms, Hildreth said. The sale is expected to close in about six months. The timeline for the redevelopment project is unknown.
At $177 million, Hilco's winning bid is the highest price for a property auctioned by the GSA since 2016, according to the agency’s records. The auction comes as the GSA, the federal government’s landlord, is in the process of unloading unwanted buildings across the country to save money. Federal employees working in the building are expected to leave by the end of the year.
Mary Simms, a GSA spokeswoman, did not immediately respond to CoStar News' request for comment.
Although the building in Laguna Niguel is a local landmark, designed by the same architect who designed the Transamerica Pyramid in San Francisco, the property is not suitable for restoration and conversion, Hildreth said.
The Chet Holifield building was designed by architect William Pereira, known for such modernist and brutalist works as buildings on the campus of Pepperdine University in Malibu and the Pacific Life building in Newport Beach, in addition to the Transamerica Pyramid.
Hilco may try to incorporate a ziggurat motif in the design of its new development, Hildreth said.
“We’re going to look at our options to try to save some of it or do some level of homage to the ziggurat,” he said.
The auction requires that if the winning bidder chooses to demolish the building, the bidder must donate $2 million to a local organization for a historic preservation project.
For the record
Anthony Freasier at MGR Real Estate represented Hilco.