Bixby Land Company
Long Beach, CA
Smart & Final and
Enterprise Rent A Car
Adaptive Use
4.43 Acres
Approx. 5 years from the
first transaction
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OVERVIEW
Bixby
Land Company is the second owner of the Spanish Land Grant for the Los
Cerritos Rancho. That area covers most of Long Beach. Bixby Land Company,
(BLC); still has significant holdings in the area. Over the past two decades,
they have experienced expiring leases on largely obsolete properties.
While the buildings have value, finding new uses that are appropriate
for the area, and don’t lessen the value and ambiance of other nearby
BLC developments is quite challenging. To further complicate matters,
BLC has a long-range plan that contemplates the redevelopment of this
site when the leases on the adjacent parcels expire in about 20 years.
The Smart & Final and Long Beach Toyota service buildings were former
General Telephone buildings. They had relatively low clearance and large
bay depths. Finding users for these buildings is the definition of “adaptive
reuse”.
Consequently, knocking down the existing buildings and building new at
this time was not an option. During a several year period, they experienced
lease expirations on several of the properties in the target area. It
was very challenging to find uses and redevelopment options that fit with
the overall plan, did not need terms beyond the overall redevelopment
date, and fit their other parameters. A partial list of those parameters
is as follows:
• Use that was compatible with other BLC tenants
• New leases that expired concurrently with the existing leases
• Investment that was commensurate with rental rate received
• Tenant mix that was compatible with other BLC surrounding property
uses
• Acceptable rental rates
• Acceptable credit
RESULTS
The
Smart & Final building was the first to become available. We worked
with this credit tenant to adapt an old building to a very effective new
store. We signed a significant lease with options, and Smart & Final
did their own tenant improvements. This use is a significant traffic draw
and destination retailer that is synergistic with the two new retail centers
BLC has developed north of this site.
Next we secured a lease with Enterprise Rent A Car for a small, badly
oriented building on Pacific Coast Highway. The layout was not good for
the average retailer, but for their use it was perfect with the exception
of the fact that they did not want the entire building. Fortunately, we
were able to find a compatible use for the portion they could not use.
Long Beach Toyota occupied the frontage on Pacific Coast Highway, and
the franchise was in the process of being sold. This was one of two small
Toyota stores in Long Beach, neither of which was satisfactory to Toyota.
The store was badly in need of refurbishment, and the service facility
was in the same building as the store. There was no room to expand and
the cost of refurbishing the store was significant. We talked to the buyer
of the franchise and submitted the then vacant former GTE building north
of Smart & Final as a possible service and automobile storage area.
The buyer was interested, but could not see how he could make the remodel
work financially when BLC would only do a twenty-year lease because they
needed to preserve their flexibility to develop the entire two blocks
at that time.
We contacted the Long Beach Redevelopment Agency and secured a proposal
from them to provide the money for refurbishment and expansion in return
for the franchise agreeing to remain in Long Beach. The City was motivated
because they had lost many of their car dealers, and resultant sales tax
revenue to Signal Hill. Toyota threatened to combine the two dealers into
one, and the logical location between the two was in Signal Hill. We were
able to capitalize on that fear to gain the cooperation of the City of
Long Beach.
As a result, the old store on Pacific Coast Highway was completely remodeled
and expanded. The service facility was moved east into the former GTE
building, and cars are stored on the lot in between. BLC has the entire
property in production without the outlay of tenant improvement dollars,
and all the leases for the two-block area have the same expiration date.
The uses are compatible and synergistic with the other BLC tenant uses
in the area, and the remodeled facilities support the appearance and vibrancy
of the area. The new users draw traffic to the area, which has a spill
over effect on the neighboring businesses, and Toyota, has a store they
are proud of.
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