New partners sink funds into Treasure Island housing projects
By John Upton
Examiner Staff Writer 9/2/08
Dilapidated buildings on Treasure Island will be redeveloped under a plan financed by Lennar and others. The first homes are expected to be ready for occupation as soon as 2013. Examiner file photo SAN FRANCISCO – Despite the economic woes engulfing builders and developers nationwide, new investors agreed over the weekend to invest millions into San Francisco redevelopment projects at Treasure Island and Bayview Hunters Point.
Dallas-based developers Hillwood Development and California-based investment firm Scala Real Estate Partners will work in partnership with Lennar Corp, the lead developer on the projects, according to a press statement released by Lennar Tuesday.
Sam Singer, a San Francisco-based spokesman for Lennar, confirmed that as part of the deal, $145 million was paid to LNR Property Corp., to replace a 50 percent stake that organization had in the deal, as well as half of Lennar's 50 percent stake in Treasure Island, and half of Lennar's 100 percent stake in Candlestick Point.
The new consortium will also buy into a New Jersey redevelopment project overlooking the Hudson River, Lennar announced.
The announcement was lauded by Kheay Lok, who is overseeing the planned 6,000-home Treasure Island redevelopment effort for Wilson Meany Sullivan, which has a 50 percent stake in the project.
"Lennar, like other public builders, has been harmed by the credit mortgage crisis," Lok said. "Now they have well-heeled partners investing in their project and additional sources of financing."
The first homes on the already sparsely-populated island will be ready for new dwellers as soon as 2013, according to Lok.
The Treasure Island plan also includes 300 acres of public parks and a new ferry terminal.
The Hunters Point Shipyard-Candlestick Point mixed-use development project will include up to 10,000 homes, 2 million square feet of commercial space, 400 parks of open space and a possible new stadium for the San Francisco 49ers.
The City in 2007 required Lennar to secure investment partners to shore up financing for the projects, according to Michael Cohen, a senior official in Mayor Gavin Newsom's economic office.
Cohen described the new deal as a "terrific development" for San Francisco.
"What we've gotten here is just a deeper and more diversified pool of private capital," Cohen said. "In a very tough real estate market, it's an affirmation not only the relative strength of the San Francisco market, but specifically the viability of our vision for the Hunters Point Shipyard and Candlestick Point."
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