Santa Ana-based developer City Ventures LLC is taking on its highest profile and most expensive housing project to date, in Old Town Pasadena.
The upstart company recently closed escrow on a $15 million acquisition of a 10-acre site that formerly served as the campus of Ambassador College in Pasadena. The site is zoned for 98 homes.
That portion of the Ambassador College campus, which in total runs about 20 acres, reportedly was valued at more than $40 million during the boom years of the housing market.
Some 70 pricey condominiums, averaging about $1.5 million each, are slated to be built on the recently acquired portion of the campus starting early next year, according to Craig Atkins, City Ventures’ cofounder.
The acquisition also includes 27 existing apartments, which are set to remain, as well as a historic mansion called Terrace Villa that’s also set to stay. Some older buildings used by the college on the campus are expected to be razed.
The development could have a value of nearly $140 million upon completion, said Atkins, a former land brokerage executive who started City Ventures last year along with Mark Buckland, a former executive with Seal Beach-based homebuilder Olson Co.
City Ventures, which has been buying land to develop in the past year, largely has focused on smaller and more affordable infill housing projects in areas such as Yorba Linda, Santa Ana and Alhambra.
The Pasadena deal is a change in strategy for City Ventures, getting the developer into more expensive homes.
It’s also likely to be the company’s most prominent project, given the site’s location and history.
The site, which sits along Orange Grove Boulevard on the route used for the Tournament of Roses Parade, is on what’s considered to be one of the better parcels of undeveloped land in the city. It’s next to Pasadena’s “Millionaire’s Row,” where dozens of older mansions are.
But the location has proven to be a Bermuda Triangle of sorts for other developers and homebuilders, including other Orange County companies that have failed to get construction off the ground.
All told, there have been four development groups that have proposed various projects on the campus in the past decade, including City Ventures.
Prior developers wanted to build nearly 1,000 homes and several thousand square feet of commercial space. They were thwarted by local preservationists.
That isn’t news to Atkins, who saw the land put up for sale several times while working at his last job with defunct land brokerage O’Donnell/Atkins of Irvine.
Atkins said he thinks his company can get construction moving this time since his project is smaller and is backed by Buckland’s homebuilding experience.
The company still needs to get its design plans signed off by the city.
City Ventures expects homes to average about 2,500 square feet, with the first few completed by late next year. Atkins said he thinks the homes will prove a hit with wealthier buyers who’d like to live within walking distance of downtown Pasadena.
Financing
City Ventures has been using Imperial Capital LLC, a Los Angeles-based investment banking firm, for most of its funding and has paid cash for most of its land deals.
Since starting about a year ago, the company’s bought land in Orange, Los Angeles and San Diego counties. The company has two projects under construction, in Scripps Ranch and La Costa in San Diego County. Another two projects could break ground this quarter.
The company’s also opening a Northern California office, according to Atkins.
City Ventures bought the Pasadena site from an undisclosed New York hedge fund, which reports cite as New York-based Fortress Investment Group LLC.
Fortress foreclosed on the property’s prior ownership team in 2008 after it reportedly defaulted on a $44 million loan. The site’s been in receivership for about two years.
Pasadena-based developer Dorn Platz had been heading up the last project. Irvine-based Standard Pacific Corp. was tasked to build the homes. Standard Pacific pulled out of the project in late 2007.
