Fieldstone Plays Master Developer Near Corona
By MATHEW PADILLA
Homebuilder Fieldstone Communities Inc. is taking a page from its larger rivals on a big Inland Empire housing project.
Next spring, Newport Beach-based Fieldstone plans to start offering homes for sale at Sycamore Creek, just south of Corona.
Building in the Inland Empire isn’t new for Fieldstone. Owning land there is.
Late last year, Fieldstone partnered with Greenwich, Conn.-based Starwood Capital Group to buy 715 acres of unincorporated Riverside County land. Field-stone plans to build about half of the 1,763 homes planned for Sycamore Creek and sell the rest of the lots to other homebuilders.
“We wanted to be able to control a larger land inventory for the homebuilding operation,” said Steve Cameron, president of Fieldstone’s Orange County division, which covers the Inland Empire.
Acting as Sycamore Creek’s master developer ensures privately held Fieldstone lots to build on in the hot housing market just east of Orange County.
Larger, publicly traded homebuilders have been in the master development business for years. Miami-based Lennar Corp. and Irvine’s Standard Pacific Corp. have bought land outright or teamed with financial partners as a way of getting lots to build on.
Sycamore Creek “is actually a very smart business move on their side, to give them a competitive advantage against the public builders,” said Michelle Wolkoys, managing director of Costa Mesa-based Meyers Group, which tracks home building.
Seven of the top 10 builders in Southern California are part of public companies, Wolkoys said. It’s uncommon for a private builder such as Fieldstone to own a stake in a development as large as Sycamore Creek, she said.
Fieldstone ranks No. 25 among Southern California homebuilders, according to Meyers Group.
The company builds mid-range to higher-end homes in Orange, Riverside and San Diego counties. Last year, Fieldstone counted revenue of $290 million, up 16% from a year earlier.
Grading of the first phase of 540 lots at Sycamore Creek is done. Plans also call for 12 acres of retail space, an elementary school, a 25-acre park and a swimming club.
Fieldstone teamed with a familiar name on Sycamore Creek with Starwood Capital Group. The investment firm also worked with Standard Pacific and San Francisco-based Catellus Development Corp. on San Clemente’s Talega development.
Peter Ochs and Keith Johnson, both former executives at Newport Beach-based William Lyon Homes Inc., started Fieldstone in San Diego in 1981.
Ochs always planned to retire at 50 and now is chairman. Johnson succeeded him as chief executive in 1993 and now is vice chairman. Frank Foster (photo) took over as chief executive in 2001.
From the start, the founders imposed a rule against nepotism that barred relatives of senior officers from working at the homebuilder. They also studied companies that had been around for a while.
“None of the 300-year-old firms are in the same business as in past centuries,” Johnson said. “Every couple of generations, they morph into a new line of trade.”
Foster has been with Fieldstone for 17 years. Before that, he worked for a bank that worked with Fieldstone.
“I joined as a project manager,” Foster said. “At the time the industry was peaking, I was the regional manager here in Orange County. I was in the same position when the bottom hit.”
Foster was groomed by Johnson, who saw the company through the downturn of the early 1990s. “I inherited the company in a strong position,” Foster said.
The goal is to double the company in five years by expanding in Southern California, Utah and Texas, Foster said. In April, Fieldstone bought Anchor Homes of San Antonio to get a foothold in Texas.
Fieldstone sold 800 homes last year, mostly in California, up from 721 homes in 2001. Utah accounted for about a third of Fieldstone’s home sales last year.
“To anticipate and plan for future growth, we need a steady source of land,” Foster said. “The scarcity of land for moderately priced homes,along with the competition for it and the length of time to acquire it,is our greatest challenge.”
