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Putting the green in Orange County Great Park

Emile Haddad, with a new financing deal approved by Irvine for the site of the former El Toro Marine Corps base, hopes to develop a mixed-use site where people walk more and drive less.

November 30, 2009|Michael Hiltzik
  • Emile Haddad is managing development of the old El Toro Marine Corps Air Station site. Above, Haddad walks on what was the main runway.
Emile Haddad is managing development of the old El Toro Marine Corps Air… (Don Bartletti / Los Angeles…)

The first memory Emile Haddad has of what would become the site of the Orange County Great Park and the location of his biggest development project dates from 1986, not long after he and his family fled their home in Lebanon.

Then it was still the El Toro Marine Corps Air Station, and as he tried to make a phone call from the roadside the quiet was shattered by the sound of an F/A-18 fighter jet screaming overhead.

Haddad, 51, had grown up amid the nearly constant bloodshed of a sectarian Beirut, and his first instinct was to hit the ground. "I still had the Lebanese mind-set," he says.

The jet engines have been stilled, but that doesn't mean the noise level around the site has fallen. Once the Pentagon announced the base would be decommissioned in 1999, surrounding communities started to squabble about how to put its nearly six square miles of Irvine real estate to use.

Four referendums ensued, including two that asked voters to weigh in on plans to turn the base into a commercial airport. The airport idea prevailed in the first vote and died in the second; at that point the plans shifted to the creation of a regional park of about two square miles, surrounded by private development.

Yet as Haddad recognizes, "the politics of Great Park will never be over. This is a politically divided city, and the park is a great thing for people to debate with each other."

Haddad today is managing the site's development as principal of Five Point Communities, a development spinoff of Miami-based home builder Lennar Corp., which acquired the shuttered base in 2005 for about $1 billion. A complicated life path got him to this point. He was raised in a middle-class Greek Orthodox home in Beirut, where his father was a corporate executive and his mother, a banker.

By 1986 he had graduated from the American University in Beirut with a civil engineering degree, but the city's sectarian violence made it unlivable.

"People were dying in front of me all the time," Haddad, a tall, fit man recalls in his lightly accented English. That year his family fled, leaving behind all their possessions, and fetched up in the San Fernando Valley.

Haddad eventually landed a job with Lennar and rose to become its West Coast development chief and chief investment officer. Earlier this year Lennar spun off several Lennar projects, including El Toro and the Newhall Ranch projectnearValencia, into Five Point. Lennar kept a 60% stake and ceded Haddad operational control.

By then the El Toro development had already become an exercise in keeping a mixed-use project moving when its basic economic assumptions are upended.

The real estate crash "threw us a curveball," he told me when we met at the park site recently. "We needed to look at how to move forward with the development, knowing that the residential market has no visibility." (That's the phrase businesspeople use when the future's plenty visible but looks grim.) "We were supposed to be selling homes there by 2007; now I don't think I'll be selling homes until 2013."

The cost and pace of work on the project, which at the moment consists of a tethered balloon ride and a small "preview" park, have been the subject of nearly ceaseless political bickering, not least because the ultimate price tag has, well, ballooned to nearly $1.4 billion. About a third of that money was supposed to be financed through residential and commercial development undertaken by Haddad's firm.

Real estate market conditions prompted a renegotiation of the development agreement with the city of Irvine, which called for construction of 3,600 homes on the site and included plans for 45 holes of golf (two courses of 18 holes and one of nine). The developer was to front the city about $400 million in cash and infrastructure improvements as construction proceeded.

The new deal, approved by the Irvine City Council late this summer, scraps the golf courses along with a 171-acre agricultural preserve, and requires Haddad to put up $58 million for site improvements in the next three to five years -- in effect, guaranteeing infrastructure development regardless of how the real estate market fares over that time.

The council simultaneously approved an expansion of the residential limit to about 4,900 homes, including about 500 affordable units, and it prepared to move ahead with the first phase of park construction, an athletics center with playing fields for soccer and other sports in the southwest corner of the old base.

The renegotiation provided an opportunity for the park's opponents and skeptics to raise persistent issues about the project. As one would expect, Haddad's view is that opponents harbor unrealistic expectations.

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