The long-delayed Marblehead coastal housing development in San Clemente is back in action.
Lehman Brothers Holdings Inc. recently listed the 195.5-acre development site—which is just west of the San Diego (I-5) Freeway and overlooks the ocean—for sale to prospective homebuilders.
The Irvine office of land brokerage Land Advisors Organization has the listing for the property. Bids are due by mid-January, according to the brokerage’s marketing materials.
An asking price for the land has not been disclosed.
Marblehead is slated for 308 high-end homes. The land is considered to be the last major coastal site in Southern California entitled for residential development.
The project took decades to obtain the necessary entitlements from city and state officials.
The deal is likely to provide a good barometer for the health of Orange County’s high-end housing and land markets heading into 2014 (see related 2014 Preview, page 1).
Marblehead was once valued at more than $300 million, although appraisals taken amid the last downturn set the land’s value closer to $100 million.
New York-based Lehman took control of the site and several other residential sites in California last year after a protracted legal struggle with its one-time development partner, SunCal Cos. of Irvine.
Lehman had financed more than $2 billion of land buys—including Marblehead—for the developer prior to the last recession. SunCal paid about $200 million for the San Clemente land in 2005.
Crown Jewel
Marblehead is considered the crown jewel of those former SunCal projects and is believed to be the most valuable real estate asset still owned by Lehman in California.
Those assets are all being sold as part of a liquidation of Lehman under terms of its 2008 bankruptcy.
Lehman executives said in September that the company still had about $1 billion in real estate assets to sell and that “a lot (of those sales) will come in 2014.”
The Marblehead site is expected to draw its share of interest from a wide range of national builders, including several based in Orange County.
Officials with Irvine-based Standard Pacific Corp.—the largest builder based in OC—have previously expressed interest in the site calling it “a very high priority” among potential acquisitions.
It’s not known whether the current sale calls for one builder to purchase the entire development site or if the 308 lots will be offered in multiple batches.
Officials with Land Advisors declined to comment on specifics of the proposed land sale, citing confidentiality requirements.
A time frame for a prospective homebuilder moving ahead on development has also not been disclosed by Marblehead’s seller.
A bit more activity has been seen in and around Marblehead this year after nearly five years of stalled development work.
Lehman told San Clemente’s City Council in September that a bulk of its high-priority infrastructure work related to Marblehead—including road improvements to Avenida Vista Hermosa and Avenida Pico—should be completed by the second quarter of 2014.
“There’s a lot more work to do,” Lehman representative Lisa Gordon said at the hearing.
Gordon, at the time of that hearing, said there were “no immediate plans” to sell lots at Marblehead to builders.
Retail Stalled
Legal issues surrounding Marblehead during Lehman’s bankruptcy also postponed work on a 600,000-square-foot outlet center at the southeast portion of the site, planned by Newport Beach-based Craig Realty Group.
That 70-acre parcel is not part of the current sale. Craig Realty has been waiting for Lehman to complete a number of improvements to the overall development before it proceeds with its commercial project, called Plaza San Clemente.
The first phase of the retail center, expected to run about 300,000 square feet, would take 16 months or so to build, according to Craig Realty.
San Clemente City Council documents filed last month show there’s an agreement in place between Craig Realty, Lehman, the city and Arch Insurance Co. that could transfer some early-stage development obligations at the retail site to Craig Realty, which could speed up development work there.
