Chet Holifield Federal Building aka "Ziggurat" Property

Property Description

On December 1, 2022, the United States General Service Administration (GSA) issued an Invitation for Bids (IFB) for the purchase of the Chet Holifield Federal Building (CHFB) property. The online auction started on March 7, 2023, and closed on April 12, 2023. The minimum requested bid was $70,000,000. As of the closing time of 11:00 a.m. Central Time, the auction ended with no bids.

The CHFB property, located at 24000 Avila Road, is on 92 acres in the heart of Laguna Niguel. Site improvements include a 1 million square foot, seven-story government office building; 4,777 parking spaces; services support and security buildings; recreational and landscaped areas; and non-contiguous utility parcels including a water reservoir building, cooling tower, thermal energy storage tank, and 3,840-cell photovoltaic system. Approximately 3,000 government employees currently work at the site, to be relocated prior to December 31, 2024. A link to GSA's project website can be found here.

Sale of the CHFB property was initiated as a result of a determination by the Public Buildings Reform Board (PBRB), an independent agency created by the Federal Assets Sale & Transfer Act of 2016, which identified the under-utilized property as an opportunity for the federal government to reduce its real estate inventory and thereby reduce costs significantly.

Local Land Use Authority

The federal government's nominal utilization of the CHFB over its lifetime, combined with a severe lack of property maintenance, has resulted in a long-standing blight on the City of Laguna Niguel. To this point, City Code Compliance staff have identified on-going conditions inconsistent with the City's Municipal Code as follows:

• Unpermitted uses,
• Unpermitted outdoor storage,
• Unpermitted parking lot lighting,
• Damaged pavement and sidewalks,
• Dead vegetation,
• Poor exterior maintenance of the building, including deteriorating paint,
• Improper storage,
• Lack of signage maintenance,
• Lack of irrigation maintenance, and
• Waste stockpiling.

While the federal government is exempt from the City’s land use, property maintenance and nuisance abatement regulations, immediate remedy of the above conditions would be required should the property be transferred to private ownership.

With the federal government now looking to sell the CHFB property with inclusion of a historic preservation easement, the City of Laguna Niguel, as the local land use authority, enthusiastically welcomes consideration of dynamic proposals for preservation and reuse of the CHFB that:

• Include timely resolution of noted Laguna Niguel Municipal Code deficiencies present at the property,
• Are consistent with the City's commitment to maintain and expand the local economy, and
• Are deemed by the community to constitute a significant and beneficial addition to the City's existing land use plan.

Assuming the inclusion of a GSA-imposed historic preservation easement as a condition of property sale, any City considerations regarding the ultimate disposition of the balance of the property, including potential rezoning, must first satisfactorily address this primary issue of preservation and reuse of the existing structure.  Similarly, any actions that require the preservation of the building independent from the development and thorough vetting of a detailed full-building reuse plan are contrary to principles of comprehensive planning and thereby pose a significant risk of further harm to the City, its business owners, and residents.

Based on the above, it is strongly encouraged that any parties interested in the purchase of the property undertake appropriate due diligence, including completion of any anticipated entitlement work requiring City approval, before finalization of sale.

It is the express desire of the City to work toward timely identification and development of a comprehensive plan for the property's future, mutually beneficial to the prospective property owner(s) and the Laguna Niguel community.  To contact City Staff, please email Erica Roess, Senior Planner, at eroess@cityoflagunaniguel.org, or call her at (949) 362-4067.

History of Sale/Trade/Disposal Process

Between 1968 - 1970, the Aerospace and Systems Group of North American Rockwell Corporation (NAR) developed the property and constructed the building. NAR never occupied the building and attempted to sell it but was unsuccessful due to its limited economic viability.

In 1974, NAR traded the property to the federal government. However, it was initially designed as a light manufacturing facility and was never designed to function as an office building since much of the lower three floors have limited or no windows.

In 1984, when various federal agencies occupied only 29% of the building, the GSA attempted to sell the property but was unsuccessful.

In 2016, the GSA decided to sell the property again due to extensive maintenance costs, and the low use of the building due to its design.

Between 2018 – 2019, the GSA commissioned a Feasibility Study and Seismic Analysis to evaluate the existing building and assess its condition relative to the life/safety code and GSA standards, as well as provide an analysis of alternatives for the long-term housing of the CHFB occupants. Three of the six alternatives studied included a “CHFB repair” component. In those three alternatives, the “2019” cost to repair the CHFB ranged from $526,140,000 to $916,518,000. (Portions of the public Feasibility and Seismic Analysis have been redacted by GSA.)

Between 2020 - 2021, the GSA prepared an Environmental Impact Statement (EIS) to dispose of the property. The scope of the EIS was for the relocation of existing agencies, not redevelopment. Links to the City's comment letters regarding the EIS can be found here.

In 2021, the GSA hired Griffin Enright Architects (GEA) to facilitate five virtual workshops to solicit, consider and document community input on the property and potential options for its future use. Six development proposals shared with the public by GEA ranged from improving the existing building, repurposing the existing building (Scheme Nos. 1, 2, and 3), reducing the existing building (Scheme No. 4), and demolishing the building (Scheme No. 5).  Anticipated economic and land use impacts associated with the various proposals were not shared during the workshops.  Also, due to the format selected for the workshops, opportunities for community engagement were limited.  In conclusion, the GSA declined to explain what impact if any the input received would have on the property disposal process.  A link to GSA's virtual workshops can be found here.

On December 1, 2022, the GSA issued an IFB for the purchase of the CHFB. 

The online auction started on March 7, 2023, and closed on April 12, 2023. No bids were received. 

On May 16, 2023, the GSA reopened the Section 106 consultation process. At that time, the GSA introduced the possibility of removing the covenant.

GSA Section 106 Process

The EIS for disposal of the CHFB property included a cultural resources assessment which determined several structures, including the primary office building and two guard stations, to be architecturally significant. These structures and surrounding site improvements collectively were also determined to be eligible for listing on the National Register of Historic Places (NRHP).  Per Section 106 of the National Historic Preservation Act (NHPA), GSA initiated consultation on April 9, 2020. The Section 106 consultation review process addresses two issues:

1. Whether the proposed project has an effect on historic properties; and
2. Whether any effect on the historic property will be adverse.

An effect is considered adverse when it will endanger those qualities that make the property eligible for inclusion in the NRHP.

To consider the two issues identified above, Section 106 requires the GSA to engage in formal consultation with certain groups and individuals, known as consulting parties. Other than the GSA, PBRB, and the City of Laguna Niguel, the consulting parties for this process included the following:

• Federal Preservation Officer (FPO),
• State Historic Preservation Officer (SHPO),
• Advisory Council on Historic Preservation (ACHP),
• National Trust for Historic Preservation (NTHP),
• California Cultural Resources Preservation Alliance Inc,
• Trust for Architectural Easements,
• Preserve Orange County,
• California Preservation Foundation, and
• Juaneno Band of Mission Indians Acjachemen Nation.

In a letter to the State Historic Preservation Officer, dated March 10, 2022, the GSA stated that they intended to offer the CHFB property for sale with enforceable restrictions/conditions to ensure the long-term preservation of noted improvements deemed to be of historical significance. With this restriction, GSA is then able to determine that the disposal process will not constitute an adverse effect.

Pages 5-8 and pages 36-44 of the December 1^st Invitation for Bids describe the proposed historic preservation easement.

Encumbering the CHFB property with a preservation easement effectively negates several redevelopment options identified in the GSA's virtual workshops. However, making a "no adverse effect" finding is not the GSA's only option. The GSA could propose a finding of "adverse effect." When adverse effects on historic properties cannot be avoided, some typical mitigation measures include:

• Limit the magnitude of the undertaking;
• Modify the undertaking through redesign, and reorientation of construction on the project site;
• Develop interpretative media to inform the public of the historical significance of the property; and/or
• Document through drawings, photographs, histories, and oral histories.

Independent of the GSA Section 106 process, consideration of potential impacts to culturally significant resources will also be a focus of the City of Laguna Niguel in its review of any land use entitlements for the property.