The developer of Irvine’s Heritage Fields community has reworked the financing deal for the stalled mega-project, and could begin home construction there next year, according to a report in the Wall Street Journal.
Aliso Viejo’s FivePoint Communities Inc. in late December completed a refinancing deal with Boston’s State Street Bank & Trust Co. and other investors for the $1.4 billion project that’s planned at the site of the former El Toro Marine base.
The deal clears the way for work to start at Heritage Fields, which calls for 5,000 homes and 5.2 million square feet of commercial space but which has seen little work the past few years because of the down real estate market.
Construction of the project’s first homes now could begin in 2012, Emile Haddad, FivePoint’s chief executive, told the Wall Street Journal.
Miami-based Lennar Corp. bought the former base in 2005, borrowing $775 million from Lehman Brothers Holdings Inc. and getting another $700 million in equity from other investors.
FivePoint, which is majority-owned by Lennar, took over management of the development in 2009.
State Street last month got federal bankruptcy approval to buy Lehman’s $775 million mortgage note tied to Heritage Fields for $153 million.
As part of the refinancing deal, State Street agreed to reduce the outstanding debt balance on the deal to $200 million, and gave the developers a $200 million line of credit to complete land development, according to the Wall Street Journal report.
