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Tuesday, May 24, 2022

Great Goals for Great Park

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In another sign of FivePoint Holdings LLC’s rapid rate of development at Irvine’s former El Toro Marine base, the master developer has agreed to kick in a quarter billion dollars to spur more sports-related work at the Orange County Great Park.

The real estate firm last week reached a deal with the city of Irvine to start another batch of work along the western edge of the 688-acre park, the latest efforts by Chief Executive Emile Haddad to “build a new city from scratch” within the confines of the former base.

Under the deal, the developer will fund construction of the future home to USA Water Polo, a state-of-the-art facility that can hold upward of 5,000 people and is envisioned to be used for the Los Angeles Olympic Games in 2028, as well as an adjacent field house, which will have basketball and volleyball courts for public and professional uses.

An expansive parking structure to serve those facilities and other venues nearby is also planned by FivePoint (NYSE: FPH), which said it will issue bonds to cover the cost of the project.

“We’re not asking for anything” to offset the financial costs, Haddad said of the latest deal.

“With the amount of homes built, and with home prices where they are, there is a lot of money available right now to make this possible,” Haddad told the Business Journal last week.

FivePoint oversees development of Irvine’s Great Park Neighborhoods, which over the past six years has seen thousands of homes built on its 2,100 acres of land that are adjacent to the OC Great Park. Taxes on those homes have funded a good portion of the work at the OC Great Park.

Irvine’s planning commission this month approved a new phase of development on Great Park Neighborhoods land not far from the new sports facilities. Dubbed FivePoint X, the 58-acre site is expected to hold some 425,000 square feet of “mixed-commercial” uses, including a 180-key hotel, plus a variety of food and retail options alongside new homes, city records show.

Above and Beyond

Last week’s agreement—which also provided more clarity, and funding, for a new cemetery for military veterans on a plot of Great Park land previously earmarked for a golf course—marked a “proud moment” for Haddad and FivePoint.

In 2013, the company reached a similar deal with the city—it saw the developer make a $172 million commitment that led to the first phase of the sports park at the OC Great Park.

“We did what we said we would do,” Haddad said. Before, “we had to say what we could do, now I can show them.” FivePoint said it went well above that $172 million mark, and has spent close to $250 million, a figure it’s willing to commit to again.

The developer’s tangible work at the site caught the attention of USA Water Polo Chief Executive Chris Ramsey; plans for a new facility in the area have been in the works for over a year, and follows the recent move of the association’s headquarters from Huntington Beach to Irvine.

The new facility will include three pools, one of which will be designated for public use by the city, to host swim lessons and other programs.

Some 50,000 athletes are expected to use the new space to practice and prepare for future national and international competitions.

“Irvine is the world’s best kept secret, and these facilities will put the city on the map internationally,” Haddad said.

Ramsey described the planned facility as “the Sydney Opera House” of water polo facilities, and noted that it was designed with input from the athletes themselves.

Typically, Ramsey says, water polo pools are just reconfigured swimming pools, leaving the facilities with inadequate seating and viewing options.

The new facility will have 1,400 permanent seats, with capacity for up to 5,000 seats, on both sides of the pool, with modern score boards and technology.

It’s possible for the facility to play host in the 2028 Summer Olympics held in L.A. Currently, Long Beach is expected to host competitions for swimming and water polo.

“Our athletes are incredibly excited to call Irvine home,” said Ramsey. “We want to become Irvine and OC’s home team.”

There are efforts already in place to keep the athletes in the city following their retirement from the sport.

Local businesses, including FivePoint, have partnered with the organization to create a business council that would engage athletes with companies in the area, making lasting career connections.

“I told Chris I would be the first to step up to say anyone who is interested in the real estate world has an open invitation to join FivePoint,” Haddad said.

“These athletes are driven people who can bring a great perspective to our organization.”

Connections, No Silos

Putting athletes in contact with business execs, placing sports complexes near a new City of Hope cancer center, and locating thousands of new Great Park Neighborhood residents close to all those things is all part of the plan for Haddad, whose strategy—in business leadership, and development work—is to “break down the silos” that limit capacity in one way or another, or limit interaction between various groups.

“The days are over when a developer would [dictate] what would be built on their land—it’s about collaboration [now],” he said.

In Irvine, that collaboration appears to be taking shape in an elevated version of the “live-work-play” ethos now seen at other regional developments.

“The much bigger picture is about creating a community with social equity in mind, that will integrate people from different backgrounds, and help foster the collective exchange of thoughts and ideas,” Haddad said.

In Irvine, and FivePoint’s other markets in California, “we’re trying to build a model of the city of the future.”

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