Newport Beach-based Olen Properties Corp. has withdrawn plans for building close to 900 apartments around John Wayne Airport in Irvine, the latest sign of a cooling market for local home developers.
Olen had filed plans with the city for three apartment projects in the commercial area around John Wayne Airport known as the Irvine Business Complex. Olen already owns the land and currently has low-rise office and industrial space there.
The decision to back away from the projects in the past month largely was because of the deteriorating housing sector, according to company officials.
The projects would have been Olen’s biggest housing development in Orange County. The company owns some 11,000 apartments across the country, primarily in Arizona, Florida and Las Vegas. It also counts some 6 million square feet of commercial space.
The Irvine plans could be revived if conditions improve, according to Olen officials.
The developer also expressed frustration with the Irvine Planning Commission for its slow pace of issuing guidelines for projects in the area.
Tax Case
The decision to back away from the projects isn’t believed to be related to the recent legal events surrounding Olen’s founder and president, Igor Olenicoff.
Last week, Olenicoff pleaded guilty to a charge relating to the developer’s long-running tax dispute with the government.
The plea deal struck with federal authorities calls for Olenicoff to pay $52 million in back taxes and penalties for 1998 to 2004.
He’s due for sentencing in April and likely will avoid prison.
Olenicoff had disclosed plans for the Irvine apartments in late 2005. Original plans called for as many as 2,000 apartments to be built around the airport in four locations, including a pair of eight-story towers at 1929 Main St., near MacArthur Boulevard.
The project would have been the first apartment towers built in OC in recent memory, and came as other developers in the area were focusing their high-rise efforts on condominium projects.
Plans for the Main Street tower project subsequently were slimmed down to a four-story development, in line with other apartment complexes built in the area by companies such as Newport Beach’s The Irvine Company and Irvine’s Sares-Regis Group.
Olen still is moving ahead with a pair of apartment projects elsewhere in the county. A 260-unit project known as Olen Pointe Brea, near one of the company’s larger local office projects, is slated to start up construction next year.
The company also has plans for a 135-unit apartment project in Santa Ana, which is expected to start construction in early 2008 as well.
In Irvine, Olen also is planning a two-story restaurant next to its Century Centre office towers.
Olen is one of several developers to have a change of heart about building in the airport area.
Not counting the Olen project, plans for more than 2,000 homes,out of the nearly 11,000 condos and apartments developed or planned in the area,have been withdrawn from the city, postponed indefinitely, or re-worked to emphasize commercial uses during 2007.
Other Pullbacks
Notable high-rise projects no longer on the books include a 16-story condo tower proposed by Los Angeles-based KB Home, which was planned near Jamboree Road and the San Diego (I-405) Freeway.
Plans for a pair of 14-story condo towers near the intersection of Jamboree Road and Dupont Avenue have also been withdrawn and are being reworked to include office space and hotels, alongside a project planned by Houston-based Hines Interests LP.
Another four towers of condos planned by Canada’s Bosa Development Corp. at Maguire Properties Inc.’s Park Place complex, totaling more than 500 homes, also are in limbo because of the poor housing market.
Among projects now under construction, sales have been slow. Lennar Corp. last month said it was halting sales for low- and mid-rise condos at its 41-acre Central Park West project until conditions improved.
While next year may see a slowdown in construction for the Irvine Business Complex, developers still will be focusing their efforts on getting entitlements approved with the city, said Tim Strader Jr., principal for Irvine-based Starpointe Ventures, a consultant to developers.
“It will depend on who the principal is. Those (developers) with a long-term view will continue to go forward,” Strader said.
Entitlements for projects in the Irvine Business Complex effectively last for 20 years. As a result, developers aren’t required to start building immediately once their projects are approved by the city, which protects them from a slowdown in the market, Strader said.
At OC’s other big center of urban redevelopment, Anaheim’s Platinum Triangle, city officials have shown little concern over the current sluggish sales market that has kept some developers from breaking ground.
Last week Anaheim City Council members voted to more than double the amount of development for the area around Angel Stadium of Anaheim, to include more than 18,000 homes and nearly 17 million square feet of office space.
