Five Point Communities will officially break ground Tuesday, Jan. 31, on the much-anticipated new home communities that will surround Irvine's Great Park. The initial construction--and ground breaking--will be at the northern end of the former El Toro Marine Base near Irvine Blvd and Ridge Valley and will mark the beginning of one of the largest new home projects in California over the next several years.
Great Park Neighborhoods, as the residential development is called, represents a significant collaboration between the city of Irvine, which owns the Great Park, and the developer, Five Point Communities. Emile Haddad, CEO of FivePoint Communities Management, said the evolution of such a large project is due to the teamwork between the city and Great Park Neighborhoods.
"This is probably one of the largest public private partnerships," said Haddad, whose company is also the Great Park Neighborhood's development management partner. "The city has been at the table with us as a public partner since day one. We both have a common interest in seeing a metropolitan park being built and that has been a really big factor in why we are here today. This partnership worked."
This first phase of development will include nearly 4,895 new homes and 1.2 million square feet of retail, office, recreational and educational space, including new schools and childcare facilities and 23 miles of walking and biking trails connecting the neighborhoods with the Great Park, nearby restaurants, shops and the Irvine Transportation Center. The new construction area will stretch from the northwestern edge to the northeastern side of the Great Park.
Great Park Neighborhoods received city approval for the development in September, and the project is expected to create more than 16,000 jobs over the course of the planning, development and construction phases. FivePoint is estimating that homes will be available for sale by 2013.
More than $1 billion in funding for the Great Park Neighborhoods development initially came from the now-defunct Lehman Brothers. With the loss of that capital, the company had to find other lenders to bankroll the project and succeeded in raising $400 million from several sources, including Boston-based State Street Bank & Trust Co. Great Park Neighborhoods has already paid $200 million in cash to the city to build the Great Park, and is committed to pay an additional $125 million over the next 10 years, including $65 million within the first five years.
“We are coming off five years off a lot of worry about a lot of funding. We as a private developer have lived through the life of uncertainty for a long time,” Haddad said. “Here we found solutions to find the right funding and find the right restructuring to move forward, so I am confident that as we sit at the table as partners we will find methods to fund, and we will find ways for this park to be built.”
Addressing the question of the state of the housing market, Haddad said that quality housing is always in demand in this area.
“When you talk about the housing market, there is no one housing market. This is a very micro market, and that is the market of Irvine,” he said. “We are fortunate to be in the middle of one of the best-executed master planned communities in the world, maybe. So you have to look at these factors more than you have to listen to the sound bites of the housing markets in general, because every market is behaving differently.”
The second phase of development will include an additional 5,700 homes in neighborhoods to the west and south of the Great Park, and an entertainment district at the southern end near the Irvine Transportation Center.
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