In what city officials said could bring new jobs and economic growth to Long Beach, a real-estate firm announced this week that a major tenant– Mercedes-Benz USA– is moving into the former Boeing 717-assembly plant that has sat vacant off of Lakewood Boulevard at 4501 E. Conant St. for nearly seven years.
Real-estate agents for CB Richard Ellis (CBRE), which has been marketing the site for Irvine-based Sares-Regis Group since the developer purchased the property last year along with the rest of Boeing’s vacant land, announced on Monday, July 8 that Mercedes-Benz USA has signed a long-term lease to occupy the space that totals nearly 1.1 million square feet.
It remains unclear what the multinational automaker has planned for the site, which includes two large former aircraft-assembly hangars, but city officials said New Jersey-based Mercedes-Benz USA is expected to make an official announcement soon.
Long Beach city officials lauded the deal, stating it culminates nearly a year of planning and negotiations between the property owner and the City and will garner new jobs and economic vitality.
“This is significant for Long Beach as it will bring needed jobs and property-tax revenue,” stated 5th District Long Beach City Councilmember Gerrie Schipske in an emailed statement, adding that she knew of the deal for several weeks. “This transaction speaks to the excellence of the Sares-Regis Group as a developer and the fact that they are marketing the convenience and quality of Long Beach to potential businesses. This also speaks to the fact that Long Beach is a desirable location on so many levels.”
Fourth District Councilmember Patrick O’Donnell also sent out an email, applauding the transaction. “This is a great thing for Long Beach and an excellent opportunity to put this facility to good use,” he stated. “Thank you to all involved in making this happen.”
Long Beach Mayor Bob Foster had worked closely with the property owner to lure the new tenant, said Becky Ames, the mayor’s chief of staff.
Although Ames said she couldn’t divulge any further details at the request of Mercedes-Benz, she told the Signal Tribune in a phone interview that the mayor was “intricately involved” along with development services staff in helping to bring together plans for the site after a “substantial number of conversations” and negotiations in the past year. “It was a team effort,” she said.
Ames said the property owner has envisioned a “dramatic re-imagining” of the site, which is adjacent to the Long Beach Airport and across the street from a Marriott Courtyard hotel that opened earlier this year and several other developments that are underway. “It’s going to be a very, very positive thing, and we’re very happy to see it come together,” she said.
A statement from CBRE states that the deal marks a “significant milestone for the City of Long Beach, as the backfilling of the massive facility” and signifies a “new era for the 52.2-acre site,” which is also located across the street from the 260-acre mixed-use development known as Pacific Pointe at Douglas Park.
CBRE real-estate agent John Schumacher stated that the transaction is the “largest infill industrial lease in the Los Angeles area in more than 25 years,” the likelihood of such a transaction happening in the local area again anytime soon would be “virtually impossible.”
“There simply is no way to aggregate a [plus or minus] 50-acre site within the infill area of Los Angeles, let alone in such close proximity to the Port of Long Beach,” Schumacher stated. “It’s unlikely that we’ll see another opportunity for a contiguous parcel with these kinds of improvements within a 20-mile radius of the ports in the foreseeable future.”
It’s undetermined whether Mercedes-Benz qualifies for tax credits through the enterprise zone after the state Legislature has made substantial changes to the program, but Ames said the City’s recent efforts to streamline permitting processes and provide easy access to the mayor and city staff helped close the deal.
The site’s close proximity to airports, freeways and “great public schools” also made Long Beach a prime candidate, she said.
Having close access to the Port of Long Beach, which is where Mercedes-Benz already imports cars through various shipping arrangements, was a major factor as well, Ames added. “In this particular instance, I would say that was certainly a part of it,” she said.
Mercedez-Benz, historically a German luxury-automaker that has moved some manufacturing to America, isn’t entirely unknown to Long Beach. According to the company’s website, the automaker already has fuel-cell operations and a tech center at 4035 Via Ora Ave. in Long Beach, located just off the 710 Freeway.
The major lease transaction comes after several attempts by city officials and real-estate representatives to reel in a tenant to fill up the massive vacancy.
Plans for the former commercial-aircraft assembly plant have included a movie studio and a manufacturing facility for Tesla Motors, which decided to move to Fremont.
At one point, city officials even tried to entice Boeing to return to the site to build its 737 MAX in an effort to revive airline production in California, however Boeing went with Renton, Wash. instead.
The site was left empty after the last 717 commercial airline rolled off the lot in 2006 once Boeing decided to shutter its operations there. Douglas Aircraft Company built the first series of commercial airline DC jets at the site, and then McDonnell Douglas Aircraft built MD 80s and other airline models.
Before being used for commercial-airline production, the site was used for assembling military aircraft at the outset of World War II. The plant was once called the “Arsenal of Defense,” turning out nearly 15,000 military aircraft, including C-47s, B-17s, A-26s and early A-20s amd employing some 70,000 people.
As for the historic “Fly DC Jets” neon sign that has been located on the top of the hangar building for more than 50 years, the landlord entered an agreement with Boeing and the City when the developer bought the property that the sign be “retained in place, protected and maintained as is.” However, preservation groups have called for it to be protected further through a historic-landmark designation.