College plans to become landlord

For lease: 4 acres of prime Costa Mesa real estate. Terms: $480,000 per year for 35 years.The Coast Community College District has put four acres of property next to its Costa Mesa headquarters up for lease, aiming to bring in nearly half a million dollars a year in revenues.

Between now and Jan. 27, the district will accept sealed proposals for the property, which is near Adams Avenue and Pinecreek Drive at the back of a larger parcel. The board of trustees has proposed the starting payment of the 35-year lease at $480,000 per year, money that district officials said could go to educational funds, retirement benefits or other purposes.

“In the past 10 years, we’ve faced a lot of budget cuts along with other community colleges throughout the state,” said Martha Parham, public relations director for the district. “It’s a way to recoup those dollars and provide more services in classes for our students.”

Five years ago, the district considered leasing its entire 14-acre property -- which includes the district headquarters on Adams and Pinecreek -- to Lowe’s Home Centers, a North Carolina-based hardware chain. The board of trustees decided against the deal, however, and is currently making plans to build a new headquarters on the site. Meanwhile, much of the parcel remains unused.

For the last several years, the district has leased one acre of the property to Connell Chevrolet as storage space. The space currently up for bids includes that acre as well as three adjoining ones.

Board members said they would consider the car dealer as a tenant for the larger property, although they had not yet received a bid from Connell.

The owners of the dealership, whose main office is on Harbor Boulevard, could not be reached for comment. Board member George Brown said he would welcome a car dealer on the property, since it would be unobtrusive.

“They could use it for storing brand-new cars,” Brown said. “It doesn’t make any noise. It’s not a trash compactor company or anything. For us, as long as we’re leasing it, it seems ideal.”

Board president Walt Howald said that other possible tenants would be a government agency or a newspaper office. The resolution approved by the board last week grants the district the right to reject any and all proposals -- unlike the 2004 sale of the KOCE-TV station, currently under court dispute, in which the board was obligated to sell to the highest responsible bidder.

The district has put the land up for lease, not for sale, but the tenant would occupy the property for 35 years with one five-year option. Howald said a long-term lease would be more efficient financially.

“We have escalated rents each time we’ve renewed the lease, but in the past it’s been for a much shorter time, which makes income flow from the property less,” he explained.

The board has not yet decided where the lease money would be spent, although member Jerry Patterson said the funds would likely benefit the headquarters rather than programs at Orange Coast College, Golden West College or Coastline Community College, the three sites in the district.

Health insurance and retirement benefits would be possible priorities.

“This particular site being under the administration, it would probably have to go to something that serves all three campuses,” Patterson said.

According to C. M. Brahmbhatt, vice chancellor of administrative services for the district, Connell has rented the one-acre property on a monthly basis for more than 10 years. He estimated the rent payment as around $3,000 a month.

The district has owned the 14-acre parcel since its inception in 1947; prior to that, the property had served as an Army barracks. The land has been at the center of discussion for several years, as board members have debated leasing it or dividing it into sections.

Earlier this year, the board rejected a proposal to lease the property and move the headquarters to the OCC campus. A current idea, Patterson and trustee Mary Hornbuckle said, is to turn the site of the current headquarters into student or faculty housing after the new building is constructed.

“We’re kind of all over that 14-acre site right now,” Hornbuckle said.