Santa Monica’s historic post office building is back on the market.
SkyDance Productions purchased the property in 2014 for about $27 million and has received entitlements to modify the building. However, the company has already outgrown the space and won’t occupy the site.
The application to reuse the building included a remodeled interior and construction of a new addition at the rear of the building. The remodel would reduce the first floor from 17,516 to 16,146 square feet, convert the 2,645-square-foot mezzanine level to an 8,508-square-foot second floor, add an 8,148-square-foot third floor and increase the basement from 13,807 to 16,516 square feet. The project proposes a new 32-foot-tall, 14,490-square-foot building to be built at the rear of the existing landmark building.
However, in the three years since purchasing the site, the SkyDance has grown substantially. Trevor Nelson of Pegasus Investments (who along with Katherine Weaver of Pegasus investments and Travis Landrum of Industry Partners have been hired to facilitate the sale), said SkyDance now has too many employees to fit in even the rebuilt project. Therefore, owner David Ellison has decided to put the building back on the market and look for a larger space in the Santa Monica area.
“He did not go into it with the idea of buying and reselling,” said Nelson. “He hoped this would be the forever home of the company.”
Skydance Media, produces TV shows and films, such as Star Trek Beyond, Mission Impossible Rogue Nation, World War Z and Grace and Frankie. Nelson said the company has grown substantially in recent years thanks to the success of its TV projects and some virtual reality ventures.
“The company grew faster than expected and no longer fits in the project he was approved to build there,” Nelson.
SkyDance will now pursue a new site with a preference for a larger facility somewhere else in Santa Monica.
However, entitlements for a development project are attached to the property, not the developer, so a new owner could still complete the Skydance proposal and Nelson said the existing approvals could be very valuable to a new owner.
“With backlog, a person can come in here and start building that beautiful building (Ellison) designed almost immediately but that doesn’t mean a new buyer is beholden to that,” he said.
Approval for the reuse proposal will expire in August of this year unless SkyDance files for a six-month extension. If existing approvals expire, if a new owner wants to amend the project or if new owners want an entirely different project, they would have to restart the development process and would be held to whatever development standards are in place at the time of their new application including the pending Downtown Community Plan.
Mayor Ted Winterer said he hoped new owners would commit to the preservation of the site.
“I hope that whoever acquires the property has the same commitment to preservation of the historic property that SkyDance has shown,” he said.
Winterer said the city has no say in who the project is sold to but he would like to see a non-profit move in.
“I’ve asked the owners to see if a non-profit could be found that would take the building,” he said noting City Hall can’t force its will on the seller. “It’s a private transaction and I can only encourage them.”
Nelson said SkyDance wants the building to go to good use and is aware of the community’s desire to have some kind of public access to the site. He said there’s a chance the purchaser could be someone who wants to use the project for retail or another kind of community engagement but it’s also dependent on the market value of the property.
“This can be the most prestigious single-tenant office building in Silicon Beach,” said Nelson “It’s a unique opportunity to build something modern and special while preserving an amazing piece of local history.”
Nelson estimated the building could be sold for as much as $40 million but said the price hasn’t been set and the seller is taking offers to determine market value.
“(Ellison) isn’t a developer trying to make a specific amount of profit, he’s just a person who doesn’t need the asset,” said Nelson.
Construction had already begun on the renovations, including a controversial fence surrounding the site. Nelson said active construction projects (such as the fence) will be completed but no new work will occur until the sale is complete.
Potential buyers can visit https://www.smpostoffice.com for more information about the project.