After years of delays, construction is expected to start soon at La Floresta, a nearly 1,350-home and retail development set for the site of a former oil company research center in Brea.
Brea’s City Council in mid-May gave unanimous approval to the nearly 212-acre project, which had been on hiatus with the downturn and changes in ownership.
A little more than three years ago, the project was valued at about $105 million, according to regulatory filings. It’s likely worth less than that now after the real estate crash.
With the housing market starting to show signs of life, landowner Chevron Corp. is hoping to have home lots ready for sale in time to take advantage of rising demand and prices.
Chevron’s plan is to start grading and other early work on the 1,347-home project—one of the largest housing developments planned for Orange County in the near term—in the next six months.
Some actual building at the empty 120-acre site at the corner of Imperial Highway and Valencia Avenue could begin in earnest early next year.
“The hard work is yet to come,” said Jim Martinez, project manager of Chevron Land and Development Co., which is running the La Floresta development.
Progress on La Floresta came as welcome news to Chevron, which took a big blow last week on another long-planned North County project.
West Coyote Hills, a 760-home and retail project proposed on an abandoned oil field in neighboring Fullerton, was struck down last week.
Zoning changes and other entitlements needed for the 510-acre project, slated to be the largest housing development Fullerton’s seen in nearly a decade, were denied by a 3-2 City Council vote that surprised even opponents who were bracing for approval.
It’s unclear what Chevron’s next steps are for the Fullerton project, where redevelopment plans first were proposed in the 1970s. It’s possible the company’s Pacific Coast Homes development unit heading up Coyote Hills could come back to the council with a revised development plan.
Brea’s redevelopment site already was zoned for commercial development, so it didn’t face the same level of resistance from city officials or residents as did the Fullerton open space.
La Floresta is set to have a mix of traditional houses, condominiums, apartments and lofts. It’s also expected to include about 111,000 square feet of retail space and about 45,500 square feet of office space, according to city documents.
In addition to a 222-home assisted living complex, about a quarter of the homes planned for the project are set to be designated as adult active, meaning a buyer needs to be at least 55.
The decision to move ahead with construction at La Floresta marks a quick shift in plans for a site that had been idle for nearly five years.
El Segundo-based Unocal Corp. had operations there for more than 50 years. A Unocal research center at the site was shuttered nearly 15 years ago and razed a few years back.
Chevron acquired the land in its 2005 buy of Unocal and set about designing a masterplanned community. The plans include a 92-acre area alongside the nearby Birch Hills Golf Course where 247 of the nearly 1,350 homes would be built.
When entitlement work was under way in earnest in mid-2006, the plan was to have initial construction start at the site in early 2007, with work on the nearby golf course land set for later that year.
The slumping housing market quickly put a stop to those projections. In addition, Planning Commission approvals and environmental-related entitlement work wasn’t finished until late 2008. A subsequent lawsuit by the city of Yorba Linda over traffic issues wasn’t resolved until recently.
Standard Pacific
In the meantime, one of the project’s main backers, Irvine-based homebuilder Standard Pacific Corp., opted to back out as a direct investor in the project as it worked to manage its finances during the downturn.
Standard Pacific had been a joint venture partner with Chevron in La Floresta and had invested about $13 million in the project through late 2007.
The builder estimated the joint venture to have $105 million of assets tied to it, before opting to get out of the partnership in 2008, according to filings with the Securities and Exchange Commission.
Standard Pacific still is active in the project, said Ted McKibbin, president of Standard Pacific’s Orange County division.
“We do have an interest in purchasing land” at La Floresta for a variety of single-family homes and condos, McKibbin said.
The company’s website lists the Brea site among its active OC projects.
Chevron’s yet to sell any lots to Standard Pacific or any homebuilder, according to Martinez. If the current construction schedule moves as planned, some lot sales for homes could happen in late 2011.
Standard Pacific “is a builder we’ve had a long association with, (but) there are lots of builders interested in buying (lots) right now,” Martinez said.
“There’s plenty of work to be done” before lot sales would go ahead, he said.
Decisions on other developers for the project already have been made.
Valencia Imperial LLC, a Santa Ana-based unit of Newport Beach-based developer World Premier Investments Inc., is in escrow to buy the roughly 16 acres of land where the site’s retail development would be.
Oakmont Senior Living, a Redmond, Wash.-based developer, now is slated to handle an assisted-living facility at the project. Irvine-based Jamboree Housing Corp. is expected to handle the construction of 115 affordable apartments on the project, according to city documents.
Plans for the village center once included a 65,000-square-foot, four-star hotel. That’s been scrapped.
La Floresta could be the largest source of construction jobs on a North County housing project for the next few years.
It was estimated that Fullerton’s Coyote Hills project would create some 1,800 jobs, with about half of those in construction.
La Floresta calls for twice as money homes as well as large-scale retail and offices, which weren’t part of the Coyote Hills proposal.
“We’re excited about being able to do some construction,” Martinez said. “People are desperate for work out there.”
