Unocal looks set to move HQ from downtown L.A. to El Segundo.

Hardly two weeks after petroleum giant Atlantic Richfield Co. re-committed to its downtown L.A. corporate headquarters offices, downtown's other big oil company - Unocal Corp. - is apparently set to sign a deal relocating its headquarters to El Segundo.

Neither Unocal nor its presumed future landlord would confirm the specific relocation site, but sources familiar with the negotiations said Unocal will soon sign a long-term lease with Continental Development Corp., owner of the newly renovated Plaza at Continental Park.

A Unocal spokesman would only say the oil giant is considering various Westside locations, "particularly in the LAX area." Continental declined to comment.

Unocal, which has been seeking to relocate other downtown-based operations to Orange County and the Houston area, is expected to lease between 60,000 and 80,000 square feet of office space at the Continental property.

Sources said Unocal prefers El Segundo's access to Los Angeles International Airport, particularly in light of the growth of its Houston area work force.

El Segundo's city government has also substantially upgraded its business development programs as defense/aerospace employment there has shrunk. A city official declined to comment on any municipal participation in Unocal negotiations - until a deal is signed and sealed.

Custom offices offered

Unocal executives are also said to be looking forward to relocating from aging downtown headquarters to custom offices.

El Segundo-based Continental Development has undertaken an extensive renovation of the 475,000-square-foot office complex at 2121 Rosecrans Ave. since its former "anchor" tenants - TRW Inc. and Hughes Aircraft Co. - vacated the 1983-vintage property amid the aerospace/defense cutbacks. Several commercial real estate professionals have characterized the refurbished property as "the South Bay's finest office project."

Murad Skin Research Laboratories and Andersen Consulting LLP have each leased well over 40,000 square feet at the complex, which also features Wolfgang Puck's latest restaurant.

Recent changes in the petroleum industry - and on the L.A. real estate scene - have influenced Unocal's corporate move.

Back in 1988, Unocal sold its aging headquarters property - west across the Harbor (110) Freeway from downtown's "core" area - to a real estate development team headed by Pittsburgh's Hillman Properties and downtown's Smith & Hricik Urban Developments.

Three years later, it signed a pre-lease commitment for about 450,000 square feet in the first skyscraper the Hillman/Smith & Hricik team expected to build within the huge Los Angeles Center mixed-use project planned for the Unocal property.

Since then, the downtown real estate market soured, and the Los Angeles Center team hasn't been able to secure financing for the first highrise. Last fall, Unocal and the developers negotiated a deal canceling the oil giant's commitment to the planned headquarters tower - and leaving the developers scrambling for more viable development plans.

Between the signing and the cancelation, Unocal's downtown work force dropped from about 1,200 to about 900. Further cutbacks planned in response to a restructuring petroleum industry would eliminate more than 300 other downtown-based positions, Unocal announced last November.

"I have to say (Unocal's move) is going to be a major disappointment for downtown and for the people (planning to develop property) west of the Harbor Freeway," commented Jack Kyser, chief economist with the L.A. County Economic Development Corp. "But it does appear that we're keeping Unocal in L.A. County - so that's a victory, even if it's bittersweet."