(Bloomberg) -- A Babylonian inspired-pyramid that turned out to be a white elephant is now set for demolition in one of California’s priciest real estate markets.
A bidder whose name hasn’t yet been revealed offered $177 million for the Orange County landmark dubbed the Ziggurat. Envisioned as an aerospace factory and since converted to a now vacant federal office complex, the building is best known as a shooting location for futuristic dystopian movies including Coma, Outbreak and Death Race 2000.
“The real value here is the size of the site and its location,” said Scott Wild, senior vice president of John Burns Research and Consulting, a homebuilding advisory firm in Irvine, California. “Although this will be a long and arduous redevelopment effort, opportunities of this scale are rare in A+ locations like southern Orange County.”
If the deal closes, the buyer of the nearly 90-acre (36-hectare) property would need to change the site’s zoning to residential use if it wants to build apartments or houses, according to Erica Roess, a senior planner with the City of Laguna Niguel.
William Shopoff, an Orange County investor who won approval in September to develop 29 acres in the county’s Huntington Beach, expected the Ziggurat site would sell for more than $200 million, with the potential value soaring to between $360 million and $450 million after scoring local sign-off to build housing.
“As entitled residential land, it is likely worth $4 million to $5 million per acre, so there’s still some room for a good margin,” Shopoff said.
The median price of an Orange County home was about $1.4 million in September, the California Association of Realtors reported. The median price in Laguna Niguel was $1.7 million in the third quarter, according to brokerage Douglas Elliman Real Estate and appraiser Miller Samuel Inc.
Formally called the Chet Holifield Federal Building, the Ziggurat was designed by William Pereira, a modernist architect and city planner, to resemble a Mesopotamian temple. The centerpiece seven-floor pyramid-shaped tower was constructed from 1968 to 1971 as an electronics factory for an affiliate of the firm then known as North American Rockwell, a defense and aerospace company that never occupied the building.
It was designed to fit 7,500 workers, according to a report prepared by the National Register of Historic Places, and set to be “the world’s largest electronics manufacturing plant of its time and the largest building in Orange County.”
Rockwell unsuccessfully tried to sell the building before finally trading it to the US government in 1974 for other property, according to the City of Laguna Niguel. A decade later, the government tried to sell the building, which was only 29% occupied by federal agencies at the time.
Subsequent attempts to find a buyer failed, including a 2023 auction that drew no bidders. This time, the government, after reaching an agreement with preservation groups, allowed a new owner to demolish the Ziggurat, activating buyer interest.
“The re-offering affords the purchaser the option, but not the requirement, to preserve the building,” a spokesperson for the General Services Administration, which owns the building and conducted the sale, said in an email. “Thus, a purchaser may consider a wider range of redevelopment options in working with the local community and stakeholders.”
Bidding for the almost 1 million-square-foot building started in June at $70 million and inched up daily. One potential buyer dropped out in August at $148.5 million. Two dueling finalists each raised their offers $300,000 every 24 hours until one candidate threw in the towel this week, according to the GSA.
The highest bidder must remit 10% of its offer and will have 180 days to close the transaction through escrow, according to the GSA. The name won’t be revealed until the deal closes.
“GSA is reviewing the bids received and will consider the high bid for the award,” an agency spokesperson said in an email Friday.
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