College board rejects lease bids

Applicants strayed from requirements; trustees will likely request new round of applications.The Coast Community College District, which in December put four acres of land on its property in Costa Mesa up for lease, may have to wait a while for a new tenant, after both bids that arrived in the last month failed to meet the district’s criteria.

The board put the property near Adams Avenue and Pinecreek Drive up for bidding in hopes of bringing in funds for education and other services. For six weeks, the board invited companies to submit applications for the lease, which would last 35 years and charge at least $480,000 annually for rent.

In the end, only two bidders -- Connell Chevrolet, which already leases a small part of the property, and Valeo Companies, a development firm from Lake Forest -- submitted proposals, both of which the board rejected.

The board has a variety of options, including putting out a second call for proposals, inviting more offers, or encouraging the previous applicants to amend their bids.

Board President Walt Howald said the trustees would most likely put out a second request, citing the district’s need for funds and the remote nature of the property.

“My estimation is we ought to get as best we can in this property, but the property is really landlocked,” he said. “We’ve never asked the City Council, but all indications are that it would be a difficult parcel.”

Both of the bids departed from the district’s request in various ways. Connell Chevrolet offered to pay rent up front for the first 2 1/2 years; the district had mandated the first five years.

The car dealer also shortened the lease from 35 years to 10, with two five-year options.

Valeo asked to put its lease in escrow and not begin paying rent until after the developers got various entitlements from the city.

However, Dick Curnutt, the college district’s attorney, said such a process might take more than two years, and the district had specified April 1 as the first day of the lease.

Connell Chevrolet intended to use the property as parking and storage space; Valeo, which has created college housing elsewhere, wanted to build living facilities for Orange Coast College and Golden West College students.

Valeo and Connell said they planned to submit new applications.

“They [the district] have a situation where they have to please a whole lot of people, and it’s hard for them to do that,” said Paul Doddridge, the owner of Connell Chevrolet. “They have been very responsive to us.”

Gary Citron, the senior vice president of Valeo, said he understood the district’s objections to his proposal, but added that he still favored waiting for entitlements.

“You need some assurance that what you’re paying them is going to deliver value,” he said.