From the Wall St. Journal 5/5/13
For over a decade, city officials in Irvine, Calif., have dreamed of building one of the most ambitious urban parks in the country. Twice the size of Manhattan's Central Park, with a massive sports complex, lake and man-made canyon, the Orange County Great Park would reinvent a closed military base and anchor a new city-within-a-city. Now, as the housing market convalesces, construction is set to begin this month on the first new homes in the Great Park Neighborhoods, a new community adjacent to the park that is set to include more than 10,000 homes. There is only one problem: hardly any of the Great Park has been built.
Heritage Fields LLC, a partnership led by home builder Lennar Corp.bought the Marine Air Base at El Toro—about 4,680 acres located southeast of Irvine—from the Navy in 2005 and gave more than 1,400 acres of land and $200 million in cash to the city to start work on the park. The land is about 15 miles from the Pacific Coast, off Interstate 5.
Lennar then began working on its plan to build thousands of homes and millions of square feet of retail space in nearby Great Park Neighborhoods. But the plan to build housing was put on ice after Lehman Brothers Holdings Corp., the project's main lender, failed in 2008, and the housing market crashed. In the meantime, the city spent the $200 million Lennar gave it, as well as about $50 million generated by leases on the land at the former base, on concerts, fairs, architectural design, a free hot-air balloon ride attraction and some construction. So far, only a fraction of the park is developed.
Larry Agran, an Irvine city councilman who headed up the park's board of directors from 2004 to 2010, defended the park's progress, saying about 15% of the park's acreage is developed, including 100 acres leased to a private farming concern. He noted that about 1 million people visit the park each year. "Part of our vision was not to wait 15 or 20 years to build the elements of this park then invite people in, but to build and activate this park simultaneously," Mr. Agran said. "The real metric that counts is how many people come to the park and enjoy its concerts and festivals."
In June, when its fiscal year ends, the park is expected to show about $20 million in funds remaining, said Christina Shea, a former Irvine mayor who was re-elected to the city council late last year.. The park's slow progress has sparked a nasty fight in Irvine's City Council, with Ms. Shea and others calling for a full accounting of how the money was spent. In November, a Republican majority took control of the city council after running on a platform that included building more at the Great Park.
In the latest twist, Emile Haddad, chief executive and controlling partner of FivePoint Communities Inc., the neighborhood project's master developer, last week offered the city another $170 million in cash and future bond revenues to develop the park himself. The city council is reviewing his proposal. Mr. Haddad said in an interview that with the funds he's offering, he could develop 65% of the park, including removing its concrete runways, greening and landscaping a large portion of the park, and building a sports complex with dozens of athletic fields.
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