Development group for Great Park Neighborhoods in Irvine says formerly stalled project is now a go.
BY SARAH PETERS sarah.peters@latimes.com
IRVINE — The first-phase plans for the development of nearly 5,000 homes and 1.2 million square-feet of commercial space to ring around the Orange County Great Park was submitted to the city by project officials this week.
Five Point Communities, LLC, the development manager of Great Park Neighborhoods, announced that the formerly stalled project would be moving forward with land-grading and infrastructure to begin as early as the end of this year.
The announcement comes in the wake of a $400-million recapitalization in new cash and credit signed by a new lender, Bostonbased State Street Bank & Trust Co., which bought out the loan formerly held by Lehman Brothers Holding Inc.
Under the agreement, State Street wrote down debt on the development from $625 million to $210 million and provided a $180 million line of credit. Additionally, about $200 million in fresh capital was invested by the original investors, Lennar Corp., LNR Property LLC, Rockpoint Group LLC and MSD Capital LP.
“It is very unusual in today’s world to be talking about a project of this magnitude as one that is moving forward,” Emile Haddad, chief executive officer of Five Point, said at a press conference this week. “…We are now looking at one of the few projects of this size in the country that … has fresh capital that is ready to propel it forward.”
The first phase of home construction is expected to be complete, with homeowners already moving in, by 2013, Haddad said.
Plans have been submitted for homes that range in sizes and price ranges from $400,000 to “north of a million,” Haddad said.
However, Haddad could not say how many homes would be built in the first wave of construction; that will depend on the number of homes that the housing market can absorb at that time.
“If you are telling me that we’re still going to be in a recession in 2013, then what that means is that we might have to adjust how many homes we put up,” Haddad explained. “I, for one, believe that 2013 is going to be a healthier year than 2010 and 2011.”
Along with homes, the developer will also be creating more than 1 million square-feet of space designed for retail, recreational, office, research and development and education purposes, according to a press release.
Included throughout the development will be neighborhood parks with trails and bike paths that connect to the adjoining Great Park.
Five Point will be working with the Irvine Unified School District to determine future school needs as the development is ongoing, according to Five Point spokes woman Carol Wold.
Homeowners will pay a Mello- Roos tax to offset the development cost, but the amount can not be set until the time homes are ready to sell, according to Wold.
Irvine Mayor Sukhee Kang, who lauded Five Point for bringing in jobs and economic growth to the city, said that members of the City Council would be working closely with the school district during development.
“One of the reasons why Irvine has been a successful model is because of our excellent school systems, so that is always on top of our priorities in moving forward,” Kang said.
Five Point and the city have been engaged in a public-private partnership since the 2005 sale of
See PROJECT, page C42
