Arizona State University will pay nearly $5 million annually to rent and operate a new site in a historic building in downtown Los Angeles.

The university will lease about 86,000 square feet in the historic Herald Examiner building. When ASU announced its plans to open a space in Los Angeles, the university would not provide details on cost.

The first year of rent is below market rate, Arizona Board of Regents documents say, and the landlord is required to renovate and upgrade the building until there's a "usable core and shell."

ASU's Enterprise Partners, a private offshoot of the university, is "contributing to this renovation," board documents say.

The university will get six months of free rent and an allowance to make improvements.

The first full year of "unabated" rent will be more than $3.3 million, board documents say. And the annual cost to operate the building in the first year is $1.5 million.

The lease term is 12 years and can be renewed up to 34.5 years.

But Enterprise Partners entered into a lease with the building's landlord to "preserve ASU's ability to lease space." ASU received approval from the regents Friday to take over the lease from Enterprise Partners.

The big idea behind LA

The Los Angeles building provides ASU a more tangible way to pick off students from California universities.

Nearly 14,000 students from California were enrolled at ASU last fall, board documents show. About 2,700 are from the Los Angeles area, both in online and in-person classes.

But ASU sees Los Angeles as a huge untapped market.

More than 36,000 people between the ages of 18 and 25 live within seven miles of downtown Los Angeles, board documents say.

Beyond enrollment, the university thinks its LA site can boost its reputation.

"Given that Los Angeles is one of the country’s most globally recognized cities, ASU’s greater presence there, much like its presence in Washington, D.C., will allow for reputational advancement that will help build enrollment and financial strength," board documents say.

Program details

ASU plans to move into the building, which has been largely vacant for decades, in 2020. ASU has housed some programs, like journalism and film, at its California Center in Santa Monica since 2013.

ASU plans to bring in programs and initiatives to “draw on the interests and intellectual resources of the Walter Cronkite School of Journalism and Mass Communication, the Herberger Institute of Design and the Arts, and other units of the university.”

The historic 1914 building, commissioned by publishing magnate William Randolph Hearst, was designed by Julia Morgan, the architect who also designed the California landmark Hearst Castle.

The building, in a Mission Revival and Spanish Colonial style, features high ceilings, ornate details like marble and gold and hand-painted tiles. The renovated structure will draw on the building’s roots while modernizing interiors, ASU said last year.

The developers plan to completely renovate the building and add restaurants and retail on the ground floor. Classrooms and offices will occupy higher floors.

Reach reporter Rachel Leingang by email at rachel.leingang@gannett.com or by phone at 602-444-8157, or find her on Twitter and Facebook.

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