Fluor Plans Big Commercial Complex for Irvine Property : Company Likely to Square Off With City Over Use of Land

Fluor Corp. unveiled plans Monday to build a multimillion-dollar commercial, retail, hotel and office complex on its Irvine property.

But Fluor may be headed for a showdown with Irvine city officials, who said Monday that only Fluor Corp. can build on the property and only for Fluor business operations.

2 Million-Plus Square Feet

Fluor, an engineering and construction company, and its partner, Trammell Crow Co., a Dallas real estate concern, plan to build a 2-million-plus-square-foot project surrounding Fluor’s distinctive aquamarine-glass-and-steel corporate headquarters adjacent to the San Diego Freeway.

At a special meeting set for March 18, the City Council is scheduled to decide whether to allow the Fluor-Trammell Crow project.

Fluor and Trammell Crow officials insist the city’s ordinance clearly permits development of Fluor’s land in any way it chooses. “This complex is going to be built,” said James Rollans, a Fluor vice president, in an interview Monday. Rollans said the development plan is consistent with the existing mixed-use, high-density zoning of the property.

But Irvine City Councilman Larry Agran said the plan raises serious issues for the city, which had granted companies like Fluor the right to expand their corporate headquarters.

In 1982, Irvine’s City Council granted Fluor and seven other corporations the right to eventually expand their operations. The privilege was intended as an incentive to the corporations that chose to locate in Irvine. In exchange for being allowed to expand, the companies must contribute money or provide traffic improvements to the city.

The question is “very, very significant in terms of the stakes here,” said Agran in a phone interview. “What we basically have is a scarce resource, namely the potential for expansion in (the Irvine Business Complex),” proposed by the Irvine Co.

As part of a major corporate restructuring, and to raise cash, Fluor Corp. sold its corporate headquarters and 162 acres of surrounding land to Trammell Crow last October for about $340 million. Fluor will retain an undisclosed interest in the development of the property. The sale is due to close April 29.

2 Hotels in First Phase

The first phase of construction, scheduled to begin by the end of year, calls for 2.1 million square feet of office space, 200,000 square feet of specialty retail stores, including theaters and restaurants, and two hotels with a total of 1,000 rooms. One hotel would be located near Michelson Drive and Jamboree Boulevard; the other would be at Carlson Avenue and Michelson Drive.

First to be built would be the retail complex in the area between Fluor’s headquarters and its engineering building. The office buildings and hotels would follow, along with a health club, recreation area and day care center on the 25-acre parcel adjacent to San Diego Creek. Plans also call for additional office buildings, a third hotel and other facilities.

In addition, Fluor and Trammell Crow plan to build major traffic improvements, including a loop at the intersection of Jamboree and Michelson to ease congestion leading to the San Diego Freeway.

One Irvine city official called the issue “very-high-stakes politics” that involves major Orange County corporations, such as the Irvine Co. “If you create a Century City-type atmosphere,” the official said, “then what is the incentive to locate in the Irvine Business Center, which is their (Irvine Co.’s) prize property down the freeway a bit?”

Irvine officials said one argument against building the multi-use project is the degree to which Fluor can reduce traffic congestion by enacting car and van pooling arrangements. It is nearly impossible for individual offices in huge complexes to develop similar programs, according to Larry Hogle, Irvine’s director of community development.

Fluor officials said many of the new facilities, including theaters, restaurants and the health club, would not compound rush-hour traffic problems because their peak use is in the evening.

8 Firms Allowed to Expand

In all, eight companies were given permission in 1982 to expand their operations. The size of the expansions ranged from 14,000 square feet to 1.6 million, Hogle said. Fluor was allowed to expand its 1.8-million-square-foot site an additional 1.5 million square feet. Fluor officials said the ordinance permits it to build more than 1.5 million square feet if it makes improvements of value to the city.

The other affected companies are Allergan Pharmaceuticals, American Hospital Supply Corp., Landsdale and Carr, MPC Industries, Parker-Jamboree, Parker-Bertea and Uniloc.