The first set of homes, more than 700 of the 5,000 planned, will feature an ‘American Heritage’ character and go on sale for $400,000 to $1 million.

BY SARAH PETERS

IRVINE — Standing on a grassy hilltop overlooking the former Marine Corps Air Station El Toro, filled with overgrown fields and abandoned runways, developers on Wednesday pointed to where the first of 5,000 new homes will open by early next year.

“If you use a little imagination, you can see what this area can become,” said Emile Haddad, president and chief executive of FivePoint Communities, the Aliso Viejo-based developer of the Great Park Neighborhoods.

With the groundbreaking of the first 726 homes Tuesday, the project, which has been marked by challenges, is finally underway.

Among the financial and economic problems FivePoint faced was the 2008 bankruptcy of one of the project’s original loan holders, Lehman Brothers.

“Having that shift meant that a lot of what was envisioned here — with the homes leading the construction of the park — that changed on us,” Haddad said.

In 2010, Boston-based State Street Bank & Trust Co. infused the project with $400 million in cash and credit.

“Through a restructure of the capital, the partnership led by FivePoint was able to recapitalize and replace Lehman Brothers with State Street as the lender,” Haddad explained.

However, with those changes,

See HOMES, page C29

ONLY THE BEGINNING: A view overlooking where Phase One of FivePoint Communities’ Great Park Neighborhoods will be developed at the former Marine Corps Air Station El Toro.