A recently formed homebuilder based in Mission Viejo has signed on to complete work at the high-profile Brightwater development in Huntington Beach.
Irvine-based California Coastal Com-munities Inc. last week said it had selected Woodbridge Pacific Group Inc. to “assume all construction, sales and marketing responsibilities” at Brightwater, a 365-home development near the Bolsa Chica wetlands.
About 40% of the homes planned at the 110-acre development—which range in price from about $800,000 to more than $2 million—are believed to have been sold to date.
Little is known about the builder taking over operations for the remainder of the development, one of largest remaining coastal housing projects planned in Orange County.
Woodbridge Pacific was formed mid-year, according to state records. Partners Todd Cunningham and Carl Neuss have ties to Pacific Cascade Group, a real estate investment, management and development company that also is based in Mission Viejo.
A news release announcing the deal with Woodbridge Pacific last week said the new builder’s management team has been involved in the development of more than 20,000 homes and several master-planned communities in Southern California.
The news appears to mark a shift in corporate strategy for California Coastal, which was taken private early this year after emerging from a court-overseen reorganization. Homebuilding at Brightwater previously had been handled by Hearthside Homes Inc., a subsidiary of California Coastal that had built more than 2,300 homes in Southern California since its formation in 1994.
Hearthside
Hearthside ranked as the 23rd most active builder in Orange County last year, and the 15th most active in 2009, selling a total of 50 homes locally over those two years, according to Business Journal data. Those sales all came from the Brightwater project. It’s unknown whether Hearthside Homes remains a viable builder. California Coastal is believed to own few assets outside of its land holdings at Brightwater, which it valued at about $219 million in late 2010, the time of its last quarterly report before being taken private. Calls to California Coastal and Woodbridge Pacific last week were not returned.
There have been 48 sales at Brightwater so far in 2011, California Coastal said last week when announcing the hiring of Woodbridge Pacific. About another 100 Brightwater homes had been sold prior to this year, including 17 model homes sold in early 2009 to IHP Capital Partners, an Irvine-based housing investor.
Lengthy Fight
Sales began in 2007, following a lengthy fight over getting coastal permits for Brightwater’s development. The land was once owned by an affiliate of Newport Beach-based developer Donald Koll, who passed away last week (see story, page 1).
The project is near Pacific Coast Highway and overlooks the Pacific Ocean and the 1,200-acre Bolsa Chica wetlands.
This year’s pace of sales would appear to be a big improvement over the prior two years, when the company was operating under debt constraints and bankruptcy-related negative publicity, not to mention the ongoing effects of the down real estate market.
California Coastal, Hearthside Homes and other affiliated companies filed for Chapter 11 bankruptcy protection in October 2009. At the time of the bankruptcy filing, California Coastal owed $82 million tied to a revolving credit line and another $100 million on another loan.
Reorganization Plan
A reorganization plan backed by the company’s three main holders of secured debt— Anchorage Capital Group LLC, Bank of America Corp. and Luxor Capital Group LP—was confirmed earlier this year, after a few court-related hiccups.
The company’s longtime chief executive, Ray Pacini, departed the company around the time the company emerged from bankruptcy. A replacement has not been announced.
Luxor, a New York-based hedge fund operator, is heading up a group of creditors that expects to own 51.5% of the equity of Newport Beach’s William Lyon Homes after a proposed reorganization plan makes its way through Delaware’s federal bankruptcy court early next year.
