Shopoff to Begin Work on $500M HB Project

A plan to build a 215-room hotel, 200-plus houses, 50 affordable apartments with 50% dedicated to the hotel workers and 19,000 square feet of retail on 29 acres near the Huntington Beach coast is moving forward, with the value of the Shopoff Realty Investments mixed-use development forecast to jump more than 17 fold, once it is completed. 

The Huntington Beach City Council last week unanimously approved a mixed-use master plan project near the corner of Magnolia Street and Pacific Coast Highway. The development would be built about one block away from Huntington State Beach. 

The City Council approved the mixed-use project, which is being built at the former Magnolia Tank Farm, nearly two months after the California Coastal Commission gave its support for the development. 

The project, when built, will be the largest mixed-use development to open in Huntington Beach since Pacific City opened in phases nearly a decade ago. 

Irvine-based Shopoff Realty, which owns the Magnolia Tank Farm site, specifically plans to build more than 200 attached and detached single-family homes and a 50-unit affordable multifamily project, in addition to the boutique hotel and retail plaza. 

“We work with a broad range of people, including the building trades, labor, the police union, community and business leaders, affordable housing advocates and environmental groups. In addition, we had the support of the Realtor and building industry,” Shopoff Chief Executive William Shopoff told the Business Journal. “We have allocated 50% of the units for priority to hotel workers in the coastal zone of Huntington Beach. This will help to provide convenient housing options, shorten commutes and enhance their quality of life.” 

Shopoff later told the Business Journal that tentative track maps and grading/infrastructure plans could be approved by the summer of 2025. Construction is slated to begin in early 2026, with the first houses to be delivered later that year or in early 2027. 

The affordable housing units would be completed shortly after that, Shopoff said. 

He added the hotel would open in late 2027 or early 2028. 

Shopoff Realty will serve as the project’s master developer but expects to select a homebuilder to build and sell the houses for sale. The company also owns the hotel but has not yet selected a brand or operator. 

Shopoff bought the 29-acre property for $26.5 million, or $929,055 per acre, in August 2016, per CoStar data. 

He estimated the site could be worth $500 million to $700 million, once development is complete, or about $17.2 million to $24.1 million per acre. 

Shopoff, who got his entrepreneurial start at age 12 with a lawn mowing and pool cleaning business, won a Business Journal Excellence in Entrepreneurship Award in 2023. 

Over the years, Shopoff has made its mark locally getting residential and mixed-use approvals for sites that face their share of challenges in the entitlement process. 

Methane Mitigation Measures 

The Magnolia Tank Farm is located just south of the 38-acre Ascon State Superfund site and east of the former AES power station. 

The California Coastal Commission expressed concern that the Shopoff mixed-use project would be built next to a landfill that received oil field waste and would be affected by predicted sea level rise. 

“Historical records indicate that from 1957 to 1971, chromic acid, nitric acid, sulfuric acid, aluminum slag, oil tank bottoms, oil sump wastes, fuel oils, styrene (a form of plastic) and other wastes were also disposed in the landfill. Between 2003 and now, there have been two major remediation efforts at this site,” according to a California Coastal Commission report about the Magnolia Tank Farm proposal. 

California’s Department of Toxic Substances Control (DTSC) determined the Magnolia Tank Farm site was acceptable for residential development, according to the California Coastal Commission. 

DTSC officials said that groundwater flow from predicted sea level rise would likely flow away from where houses and a hotel are proposed to be built. 

Public documents shared by the California Coastal Commission also show the statewide agency suggested the hotel and all houses be equipped with methane mitigation measures and soil vapor monitoring probes. 

Magnolia Tank Farm History 

The Magnolia Tank Farm was home to three, above-ground tanks that stored 25 million gallons of fuel for a neighboring electrical generation station, which was operated by Southern California Edison. The electric generation station was replaced in 2013 with the AES Huntington Beach Energy Project, a power plant fueled by natural gas. 

The oil storage tanks became obsolete with AES’ arrival and were demolished in 2017, according to California Coastal Commission documents. 

Other landmarks and uses nearby the Magnolia Tank Farm site are the Huntington Beach Channel, single-family residences, Magnolia Marsh, an Orange County flood control channel and the former site of a proposed desalination plant. 

The AES plant itself could be shut down before anyone moves into a home at the former Magnolia Tank Farm site, but there is a possibility it will remain open once Shopoff completes its development. 

“The newly constructed AES plant will continue to operate but it is expected the older portion of the plant will be decommissioned by the time the homes are occupied,” Shopoff said. “That could certainly change should they get another reprieve to continue to operate longer.”