Dan Young played a leading role in reviving homebuilding here last year.
Young, president of Irvine Co.’s community development division, oversaw one of California’s largest and most successful housing projects in 2010.
The Newport Beach-based developer sold more than 850 homes at its Woodbury, Woodbury East and Stonegate East projects in Irvine.
Those sales—with condominiums starting at about $300,000 and bigger homes topping the $1 million mark—likely brought in close to half a billion dollars in revenue and helped resuscitate a largely dormant local homebuilding industry.
The northern Irvine projects, near the former El Toro Marine base, were responsible for a majority of the new homes that were built and sold here last year.
“The market hasn’t turned nationally, but it has for us,” said Young, a former Santa Ana mayor whose duties with Irvine Co. include planning and overseeing the development of homes, parks and shopping centers on the company’s land.
Looking Ahead
Fewer than 300 homes remain unsold at the projects, according to Irvine Co. officials, who are figuring out their next areas for housing development.
It’s a welcome problem to have in the county’s homebuilding industry, which had seen four years of declining sales and several notable builder bankruptcies.
Nearly one in four jobs in the county that were lost in the downturn were construction-related.
Irvine Co.’s projects—described by Young in early 2010 as “OC’s own economic stimulus package”—have helped.
The biggest challenge at the building sites of late has been finding the room to fit all the workers and equipment, Young said.
Irvine Co.’s projects helped give birth to a pair of local homebuilding companies—Newport Beach’s TriPointe Homes and Aliso Viejo’s New Home Co., which were tapped by Irvine Co. to build on its land.
“It was a great platform for us to organize and help get our company up and running,” said Joe Davis, a former Irvine Co. executive who’s now cofounder and executive vice president at New Home Co., which also includes former John Laing Homes chief executive Larry Webb.
Irvine Co. also revamped a long-dormant builder of its own, Irvine Pacific LP, to build at its projects. Irvine Pacific is expected to be one of OC’s most active builders in 2011 and beyond.
“We’re in,” Young said of Irvine Pacific, which counts about 25 employees and is building two lower-priced home models, Capistrano and Los Altos, at Stonegate East.
It’s a quick turnaround in fortunes for Young’s division, which he took over in late 2007 at the start of the downturn. The past couple years were spent preparing land for an eventual turnaround, with plenty of research on what homebuyers want.
Young describes the past year as being “very profitable” for the developer, which had the advantage of already owning land for its projects.
Sales were more than twice what the company expected when its 2010 New Home Collection program started.
“It was an incredible risk we were willing to take,” Young said. “A lot of people were saying it was absolutely not the right time.”
Irvine Co. “had a huge impact on the industry and region this year,” Davis of New Home Co. said. “We all know that since 2007, the industry has really tanked—it’s been a disaster, really.”
Young and Davis credit Irvine Co. Chairman Donald Bren for taking the risk.
Biggest Gamble
The biggest gamble the company took was with the first batch of homes that went up in 2010. Irvine Co. paid builders to put up a majority of those homes.
Under what the company called its executive builder program, a handful were selected to put up homes in seven neighborhoods. The hired builders were expected to be paid 3% to 6% of each home’s price.
Bren “thought you had to jumpstart the economy, and the (homebuilding) industry,” said Davis, whose New Home Co. has sold more than $60 million worth of Carmel homes in Woodbury and was one of the first hired under the executive builder program. “He really put his money where his mind was.”
Irvine Co. traditionally has sold lots to builders that put up homes according to specifications set by the company.
It’s doing that again now, although it’s still financing some construction under the executive builder program in addition to building other homes itself with Irvine Pacific.
That three-pronged building strategy should carry over to 2011 as well, according to Young, who said he’s expecting another busy sales year.
“2011 will be bigger than 2010, by a fairly significant amount,” Young said.
