August 5, 2016
Both the public and private sector know that development, especially of broad-scale projects, is no easy task. Last week, Connect Orange County brought together over 500 CRE professionals for an afternoon of engaging panels and an immersive keynote presentation, “The Tale of Two Cities”.
The keynote discussion, featuring the City of Tustin’s Director of Economic Development John A. Buchanan and FivePoint’s Chairman & CEO Emile Haddad, was moderated by Bank of America Merrill Lynch’s Kevin Jennings. The presentation took the audience behind the development process of their respective master-planned communities, in Tustin and Irvine.
FivePoint’s Emile Haddad is creating the Great Parks Neighborhoods, a master-planned community (MPC) in Irvine that brings the eminent developer’s ahead-of-its-time vision to life. To get the process started, Haddad was challenged to prove that he’d create an economic engine to make up for the loss of a military base. After shelling out $650 million dollars for the four parcels of land, the community will include: 1,200 homes, the country’s largest sports complex (twice the size of Disneyland), an elementary school and high school, and a one million-SF village, to name a few of the features. The MPC, which will have a “European feel” is “focused on a lifestyle that allows people to get out of their cars and connect.”
Haddad shared that Orange County, like Silicon Valley, is facing the challenge of attracting young talent, which is ultimately a “lifestyle issue.” Therefore, he urged the importance of developing with a vision of the future in mind, sometimes two decades down the line, but expressed his frustration in saying “decision-makers aren’t looking long-term.” Since redevelopment agencies are obsolete, it has become the private developer’s responsibility to create communities that keep culture alive. Additionally, since such projects will open years down the line, there isn’t much capital remaining in the space to work with. Therefore, he compared himself to a salmon, “always swimming against the current.”
On the other hand, John A. Buchanan is working on a MPC that began 15 years ago, called the Tustin Legacy. With one million-SF to work with on a site that was once a blimp hangar, he has his own list of hurdles to cross. After the redevelopment agencies disappeared, there was less money to work with, so it is as if the public entity must act like a private developer.
“While people desire lower densities, they still want to maintain the same community feeling, so the City of Tustin must educate councils in the right way to get what is desired by all parties,” Buchanan stated. One of his big pieces of advice is to “always keep something moving.” When Haddad mentioned the topic of regional planning, which means that neighboring cities work together for a shared sense of community, Buchanan quickly replied that it’s “too logical to work” and followed with, “cities are competitive.”
Therefore, he concluded, “developers have just one chance to get things right”, and that’s a task that both the private and public sector can surely agree on.
For comments, questions or concerns, please contact Daniella Soloway