Brookfield Residential cited as new buyer of development company
The announcement of the pending sale of undeveloped land where Playa Capital is planning to build apartments and condominiums in the second phase of its development has brought a variety of emotions and reactions.
The Argonaut reported Nov. 22 that Playa Capital is planning to sell approximately 100 acres of land that has been set aside for residential units in the Village, the second stage of development in the planned community of Playa Vista.
According to real estate sources close to the pending transaction, Newport Beach-based The Irvine Co. is one of the leading candidates in line to purchase several of the residential parcels of land in the Village.
The Village is a 111-acre development that will contain 2,600 residential units, 175,000 square feet of office space, and 150,000 square feet of retail space.
Lincoln Properties, the co-developer of the Runway project, was said to be one of the bidders on the acreage, but they were not selected.
The Runway at Playa Vista will be comprised of 11 acres and offer nearly 200,000 square feet of retail space, 25,000 square feet of office space and 220 residential units.
Playa Capital, the parent company of the planned master community Playa Vista, recently received a new equity infusion from Brookfield Residential Properties, which will be taking over approximately 50 acres of undeveloped land, according to sources.
Brookfield would take over land that is zoned for approximately 2,000 housing units. The company is expected to sell its interest to The Irvine Co., a real estate investor that is one of the state’s largest real estate companies and master planners.
The Irvine Co. owns the Irvine Ranch, one of the largest planned communities in the United States.
Mark Redick, vice president of the Neighborhood Council of Westchester-Playa, pointed out that the original vision of Playa Vista as a planned community was much more expansive. In the 1990s, when plans were being formalized to build Playa Vista, they included occupying the area of the Ballona Wetlands on the west side of Lincoln Boulevard.
“People should remember that the project was greatly scaled back,” Redick recalled. “Playa Capital left a lot on the table.
“The original development by Summa Corporation would have been an environmental nightmare.”
The Summa Corporation, which was renamed the Howard Hughes Corporation in 1994, was the name that was used for the business interests of aviator and business magnate Howard Hughes after he sold the equipment division of his company in 1972.
Stephen Donell, a longtime Playa Vista homeowner, is aware of some of the details behind the recent reconfiguration of Playa Capital, which is largely owned by investment bank Goldman Sachs.
“I view this as being extremely positive,” said Donell, president of FedReciever, a West Los Angeles consulting real estate management and receivership firm. “We have a real estate company that is driving the show instead of a lender. I was made aware of this process a very long time ago and I am thrilled at the outcome.”
Playa Vista officials have long sought to integrate the planned supermarket and entertainment component of the Village with Phase I of the development, which contains some retail and office space but consists largely of residential units as well as public parks and recreation facilities.
Donell said he has been told that Playa Capital will not be dissolved until after a buyer for the residential acreage has been sold.
“The entity itself, as well as many of the principals of that corporation, will remain in place to see the development through to its conclusion,” he said.
Los Angeles Councilman Bill Rosendahl, one of two council members who voted against Phase II, said he was happy that plans to build a supermarket as well as the entertainment portion of the Village are still on track. He also is proud of that the project will include the Jewish Home for the Aging as well as several affordable housing units.
Marcia Hanscom, an environmentalist who was part of several lawsuits opposing the building of Playa Vista’s Phase I, agrees that conservationists helped to reduce the size of the initial project through community pressure. But she thinks the public’s work is not done in light of the news of the pending sale.
“The most important thing right now is to make sure that Councilman Rosendahl and Mayor (Antonio) Villaraigosa know that the public expects any ‘successors and assignees’ to be held responsible for any and all mitigations that Playa Vista was required to do,” she said. “We do not believe that Playa Vista has lived up to all of its agreements.”
Lincoln Property executive David S. Binswanger could not be reached for comment.
“I hope the new acquirers of the land act in the same responsible ways as Playa Capital has,” Redick said.
Rosendahl expressed confidence that Brookfield will continue with the original plan to bring quality homes to the second stage of Playa Vista’s development.
“These are sensible builders who know how to build homes,” he said.
Redick said the construction of Playa Vista will bring other tangible benefits locally, aside from the amenities that the Village will offer.
“This will probably be the last master planned community of this size in the United States,” he predicted. “Because Playa Vista will be self-contained, traffic will be minimized on Lincoln and Jefferson boulevards, as well as on Centinela Avenue, which are three major traffic arteries in the immediate area.”
The sale could take place by the end of this month or early December, according to real estate sources close to the pending sale.
Representatives of Playa Vista declined to comment on the sale. Calls to Brookfield and the Irvine Co. were not returned.
Rosendahl appeared to be heartened that Goldman Sachs would no longer have an interest in Playa Vista.
“Good riddance to Wall Street,” said the councilman. §