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Orange County officials are moving forward with plans to purchase the Orange County District Attorney’s Office’s 10-story headquarters and parking garage from a local developer who was co-chair of DA Todd Spitzer’s election campaign.
Under the deal up for approval Tuesday by OC supervisors, the county would pay $515,000 to buy the Santa Ana building – at 401 W. Civic Center Drive – from a company run by Mike Harrah, who is one of the biggest landlords in downtown Santa Ana.
Harrah has leased the 1960s-era building to the county for the last 20 years and helped lead Spitzer’s successful 2018 election campaign for district attorney, as the campaign’s co-chair.
The county staff report does not disclose the campaign nexus to the district attorney, nor Harrah’s name.
County officials previously rejected an option to buy another 10-story, 60s-era office building from Harrah when he offered it for $100. The county Social Services Agency had been leasing it for more than a decade, amid estimates that it would cost the county millions of dollars to bring it up to modern standards.
The former social services building – at 888 N. Main Street a few blocks away from the DA headquarters – wasn’t retrofitted with modern mechanical, electrical and plumbing systems. County officials said it had mold proliferating in the air vents, elevator malfunctions that got staff stuck on a weekly basis, a leaky roof, and a corroded plumbing system regularly releases sewage gases.
Rather than buy that building for $100, the county opted to move the social services headquarters out of the building.
For the proposed DA headquarters purchase, county agenda documents say costs for maintenance and remodeling of the building are unknown and will be determined through a due diligence process before any purchase is finalized.
Spitzer declined to be interviewed for this article, including about whether he thinks it’s a good deal and if he had anything to do with it.
“This is the natural conclusion of a 20-year real estate transaction negotiated by the CEO in 1999,” said Spitzer’s spokeswoman, Kimberly Edds.
“The price was negotiated in the original contract,” she added, referring further questions to the county’s chief executive officer, Frank Kim.
In an interview Monday, Kim said Spitzer had no involvement in the proposed DA headquarters deal.
“I haven’t spoken to either Todd or [Chief Assistant District Attorney] Shawn [Nelson] related to the acquisition of the building,” Kim said.
He said the decision to recommend buying it was made by Kim’s office and the county’s real estate staff, who are also under Kim’s office.
As for the condition of the DA headquarters the county is looking to buy, Kim noted problems with the elevators and heating, ventilation, and air conditioning system, which he said would be be analyzed during the due diligence process.
“On this particular building, I am aware that the HVAC system is deficient, and there are some improvements that need to be made to the elevator,” Kim said.
Because the county doesn’t currently have responsibility to maintain the building, he said, “we really won’t know what the condition is until we go through our due diligence process.”
“We’ll do our due diligence,” Kim said.
Harrah didn’t return phone messages seeking comment.
Under an overhaul of the county Civic Center approved in recent years, the District Attorney’s Office is in the process of moving to a different building a few blocks away to county buildings at 300 N. Flower St., across the street from the Sheriff’s Department.
County officials say current plans call for a different county department to move into the current DA headquarters.
Kim said the proposed purchase makes a lot of sense, because the property is close to the existing county buildings at the Civic Center.
“The county is in quite a bit of leased buildings throughout the county,” so consolidating them makes sense, Kim said.
Asked why the county would be buying office building at a time many county workers are working from home during the pandemic, Kim said it still makes sense to transfer office space from leased buildings and into buildings owned by the county.
Telecommuting by county workers “is working well in certain applications,” Kim said, adding that going forward he anticipates there would be more telecommuting and the county would need less leased space.
“But I couldn’t tell you today exactly how much” less leased space would be needed, because that analysis hasn’t been done, he added.
“If there was downsizing, we would downsize out of leased buildings. But having property that is adjacent to the Civic Center – there is a value in that,” Kim said.
Plus, the value of the land probably exceeds the purchase cost, according to the county staff report.
“While a formal appraisal of the Property has not been completed, CEO Real Estate estimates the Property’s underlying land value alone to be approximately $1,725,000, without any improvements,” states the staff report, from the county’s top real estate official, Thomas A. Miller.
If the current DA headquarters purchase goes through at Tuesday’s supervisors meeting, county real estate officials plan to finalize the purchase on Feb. 8, 2021.
Nick Gerda covers county government and Santa Ana for Voice of OC. You can contact him at firstname.lastname@example.org.