Unocal Backs Out of Planned L.A. Center Lease : Real estate: Oil company pulls out of proposed downtown development, will look elsewhere in area for new headquarters.

Unocal Corp., citing a radical reduction of its corporate staff, said it terminated plans to lease headquarters space in the proposed Los Angeles Center development in downtown Los Angeles.

The oil company, currently based in an office building adjacent to the site of the proposed center, said it will look elsewhere for a new headquarters and expects to remain in the Los Angeles area. But that’s not guaranteed, Unocal said.

Unocal has about 900 people at its existing headquarters in the Unocal Center complex on 5th Street just west of the Harbor Freeway. But that staff is expected to plunge to only 70 people by mid-1996, when the company will vacate the complex.

That means Unocal “now only requires a fraction of the space for headquarters staff that was planned� when Unocal agreed in 1991 to occupy part of the Los Angeles Center, the company said. At that time, Unocal thought it would move about 1,200 people into the center.

Instead, Unocal said it reached a mutual agreement with the Los Angeles Center’s developer, Hillman Properties, to terminate Unocal’s lease.

Unocal said it now will hire a property management firm and consult with Los Angeles Mayor Richard Riordan’s office to find another location for its home office.

But Unocal spokesman Barry Lane said the company won’t comment on where it might move, other than to say that “we expect that our headquarters . . . will remain in the Los Angeles Basin.�

Unocal sold the Unocal Center and adjacent property--totaling 12.6 acres--to Hillman in 1988, and Hillman plans to erect its Los Angeles Center on that property. (Unocal has been leasing back its space in the Unocal Center since the sale.)

The company moved into the Unocal Center in 1958, but the complex, which “by today’s standards is not an efficient building,� ultimately was to be torn down, Lane said.

In its place, the Los Angeles Center was to include a new 43-story office building, of which Unocal had intended to lease 23 floors, or 450,000 square feet. When signed, Unocal’s lease was considered a crucial victory for the center, because it needed a major tenant to attract additional tenants and financing.

Whether the office project will now go forward is unclear. There has also been speculation that a sports arena might be built on the site as well.

Officials of Hillman, which has offices in Newport Beach and Pittsburgh, couldn’t be reached for comment.

Unocal has been shrinking to cut costs in the face of relatively low oil prices and stagnant earnings.

Of the 900 people currently in Unocal’s headquarters, about 150 will be laid off and most of the others will be sent to other Unocal sites, Lane said.