Taco Bell Site Search May End at UCI : Economy: Firm has university ties and wants campus-like setting. But other states want headquarters too.

IRVINE — A 50-acre site at the north end of the UC Irvine campus is among several Orange County locations being considered by Taco Bell Corp., which has been scouting for a new corporate headquarters.

Relocation to a proposed $150-million corporate park, where plans include 300 condominiums and 650,000 square feet of office space, would further strengthen Taco Bell’s involvement with the university, where the fast-food giant has endowed a chair to study real estate development.

Several states, including Texas, North Carolina and Georgia, are trying to induce Taco Bell to move its headquarters and more than 900 workers out of Irvine when its lease expires in November, 1996.

The Pepsico subsidiary currently uses 285,000 square feet of offices, but says it needs more growing room, preferably in a “campus-style environment,” usually defined as a cluster of several low-rise buildings.

Gov. Pete Wilson has established a business retention committee, a so-called “red team” of state officials and local business leaders, to meet with Taco Bell to persuade it to remain in California.

John Salmon, in the governor’s office of planning and research, said the state is “very supportive of the discussions between Taco Bell and UCI.” Salmon attended a Dec. 13 meeting the red team held with the company, but declined to discuss specifics of that session.

“This is kind of an exciting thing if it were to work,” Salmon said. “I’m sure the governor would be very pleased if we could keep a company here and have the dollars go to reduce budget problems at UCI.”

Taco Bell officials would not comment on the company’s specific relocation plans, but spokeswoman Janis Smith said the company is looking at several sites in Orange County. “We’ve talked about a campus environment, but that doesn’t exclude tall buildings,” she said.

Calling Taco Bell an attractive corporate tenant, Salmon said the land being considered already is zoned for commercial use. He suggested Taco Bell may be interested in becoming involved in additional educational programs at the university.

“I don’t want to limit this to Taco Bell; other corporations may be interested in the space,” Salmon said. “However, Taco Bell brings things that another user might not. The company’s visibility and chair they endowed makes them especially qualified.”

Taco Bell is reportedly interested in leasing or buying space at UCI Corporate Park, planned for UCI’s North Campus, east of Jamboree Road between Campus Drive and Fairchild Road. The park, still in its infancy, is expected to include hundreds of condominiums and 650,000 square feet of commercial space when finished. Any deal with Taco Bell would have to be approved by the University of California Board of Regents.

“I see Taco Bell’s potential interest in the property as nothing but good. They would be an excellent neighbor for our 300 townhouses,” said Matt Witte, a partner in the townhome project, who said he was aware of “negotiations” between UCI and Taco Bell.

The $40-million condominium project is proposed by North Campus Partners, a joint venture between Witte and developer Kathryn Thompson, and would be located near the intersection of Jamboree and Birch Street on 13 acres of university land, said Witte.

“We are very excited about this project. The area is designed for a mix of corporate and residential users,” Thompson said.

She said the project, while not formally announced or approved, has been under development for about two years. Her company signed a letter of intent for the condominiums with UCI about a year ago. The UC Regents are slated to vote on the townhouse project in January, she said.

Thompson was enthusiastic about the possibility of Taco Bell taking over the commercial portion of the site.

“We received preliminary notification that Taco Bell was interested, but they have been looking at several sites,” she said.

Witte said the townhouses would be at entry-level prices as low as $115,000, which could be very attractive housing for many Taco Bell workers.

“The master plan contemplates a well-integrated mix of residential and commercial users. I don’t think anyone thought it would be just one user and I don’t think anyone knew that user’s name would be Taco Bell,” he said.

Several sources close to the preliminary talks said it is not surprising that Taco Bell and UCI are meeting.

In April, 1992, Taco Bell pledged $500,000 to UCI’s Graduate School of Management to hire a distinguished expert in real estate management. As of yet, no professor has been selected for the Taco Bell chair.

At the time, Taco Bell Chief Executive John Martin said he was “excited about aligning ourselves with a prestigious university like UCI.” He said the company was interested in encouraging real estate studies, because a major part of its business was buying property for restaurant development.

Taco Bell had previously established a $50,000 endowment to fund the Taco Bell Minority Fellowship, which assists two students each year, and the company contributes $10,000 annually to the graduate studies program.

“I think many companies are community- and educationally-oriented and Taco Bell is one of those. They have been a corporate donor in the past so there is a sense of corporate responsibility,” Salmon said. “If they can satisfy a real estate need and see the deal benefit UCI, it could be a win-win situation. “

State and local officials are especially concerned about the prospects of Taco Bell leaving California, because it is exactly the kind of business most states want: a corporate office with more than 1,100 full- and part-time employees working at headquarters to help direct more than 4,200 fast-food restaurants nationwide. With $3.3 billion in sales last year, Taco Bell is one of the nation’s fastest growing and most closely watched firms.

“The more exciting story is that the state is stepping in and trying to be creative to keep a corporation in the state,” Salmon said. “How many university campuses have you seen with corporate users, where the university was used to lure a corporate citizen?”

In May, 1992, UCI announced plans to create a large, private biomedical business complex on another corporate park site on the western end of the campus. Located at the junction of MacArthur Boulevard and Newport Coast Drive, that 124-acre development was expected to include research and commercial facilities. The university plans to lease the land to private companies.

UCI’s proposed business parks are the only such projects in the UC system, although Stanford and other national universities have developed similar business complexes on their land.

University officials overseeing the North Campus corporate park would not return phone calls. Fred Mickelson, red team leader and general manager of Southern California Edison, said he could not comment.

However, Louis Masotti, director of the real estate program at UCI, questioned the feasibility of such a move by Taco Bell.

“I would think UCI is a real possibility for Taco Bell, but I’m not sure it makes sense,” he said. “North Campus is 50 acres. Maybe you could squeeze a corporate headquarters on the site with the homes that are planned, but I don’t know.”

Masotti, who attended the Dec. 13 red team session, would only say that the UCI site was discussed “at one point” during the meeting.