Delivering the most significant sign the regional economy is gaining strength, residential developer Five Point Communities submitted plans Monday to start building 5,000 new homes and more than 1.2 million square feet of commercial and retail space by early 2013 adjacent to the Great Park in Irvine.
Renderings courtesy of Five Point Communities
“This is a very large statement about this city and the region in terms of its economic stability and promise going forward,” said Five Point CEO Emile Haddad at an overflow press conference in Irvine City Hall, where the developer delivered 10,000 pages of documents and tract maps for approval on the long-awaited project.
Sitting only a few feet away from two 6-foot-long tables piled several feet high with engineering blueprints, maps and drawings, Haddad said he hopes the City Council will approve the project by late summer or early fall so grading for the first phase of the Great Park Neighborhoods could begin before the year's end.
Councilman Larry Agran, who also serves as chairman of the Great Park Corp., described the arrival of Five Point Communities' vision for five tracts of the former El Toro Marine Base as an “extraordinary achievement,” considering the region’s “real estate crash” and the deep recession that has slowed and even threatened the future of this mega project.
The development plans call for construction of 4,895 homes, a 5-acre police station and 1.2 million square feet of shops, office, institutional and R&D space. The homes will be a mix of attached (about one-third of the total) and single-family detached properties. The homes will range from 1,000 to 3,700 square feet with prices starting at $400,000 and running up to more than $1 million. Also, 544 apartment units will be built to meet the project’s affordable-housing requirements.
“It’s very unusual in today’s world to be talking about a project of this magnitude as moving forward,” said Haddad, who has worked for months with lenders and investors to restructure financing to build on the 4,700-acre base. Miami-based homebuilder Lennar purchased the property in 2005 for more than $1 billion, with much of the capital coming from the now-bankrupt Lehman Bros. With Lehman out of the picture and property values plummeting, Haddad, who left his post at Lennar to form Five Point Communities and oversee the Great Park project, among other California opportunities, was forced to find new financial backers.
Late last month, the deal was finally finished when Haddad and his team secured $400 million from several sources, including the largest lender, Boston-based State Street Bank & Trust Co. With fresh funds in hand, and on the wings of an improving economy and interest in homebuying, Haddad decided it’s time to submit plans and win approval for the Great Park Neighborhoods project.
“This is a very exciting day for me,” said Haddad, who told OC METRO that the development ranks in the top five among dozens of projects because of its importance to this region and the challenges in getting the blueprints to this juncture. “We’re ready, and I think the community, the region and the industry is going to be very impressed with what we build.”
Simply filing plans for approval normally does not attract the level of press present at Monday’s conference. But controversy and questions have dogged the Great Park project since the beginning, and officials from both the city and Five Point took full advantage of the moment to recast the positives of this project, one of the largest private-public partnerships currently under way in the U.S.
Agran told reporters that moving forward on this project provides the city access to another $30 million that it can put toward its efforts to build out the 1,347-acre public park on the base. The city is currently spending $70 million to develop 225 acres on the western edge of the park, including 19 acres for recreation, artist studios, gallery space and eventually three lighted soccer fields.
'OC METRO Minute,' Jan. 11: Five Point moves forward with Great Park Neighborhoods project
'OC METRO Minute,' Jan. 6: Five Point gets $400 million in financing
'2010 Homebuilder series – part one '