Will the second time be a charm for Five Point?
Nearly two years after announcing – and then scrapping – plans to raise cash via the New York Stock Exchange, the would-be developer of roughly 21,000 homes west of Interstate 5 in the Santa Clarita Valley filed new papers Friday with the Securities and Exchange Commission to take the company public.
According to Friday’s registration statement, Lennar Corp., which is already Five Point’s biggest investor, “has entered into a securities purchase agreement with us to purchase $100 million of (new stock in) Five Point Operating Co. LLC.”
Also, hedge funds managed by Third Avenue Management LLC and Castlelake L.P. have “indicated an interest in each purchasing $25 million.” Any unpurchased shares “will be offered by the underwriters to the general public.”
The joint bookrunners on the deal are Citigroup, J.P. Morgan, RBC Capital Markets, Wells Fargo Securities, Deutsche Bank Securities, Evercore ISI, Zelman Partners LLC and JMP Securities.
The owner of the assets once known as The Newhall Land and Farming Co., Five Point Holdings LLC attempted in July 2015 to raise construction capital through a public offering but withdrew the offer when the California Supreme Court put a hold on the Newhall Ranch project.
Five Point described the situation in the “risk factors” section of Friday’s filing:
“On November 30, 2015, the Supreme Court of California issued a ruling under CEQA (the California Environmental Quality Act) and other state statutes, which requires the CDFW (California Department of Fish and Wildlife) to reassess certain analyses and determinations related to greenhouse gas emissions and the protection of a certain fish species completed by CDFW in connection with approving the EIR (environmental impact report) for Newhall Ranch. The ruling also requires the County of Los Angeles to reassess its analyses and determinations related to greenhouse gas emissions in connection with the EIR and to reassess its previous related approvals.”
The court ruling “has resulted in the need to reassess certain elements of the project’s potential impacts, and will result in the need to modify certain aspects – such as specific mitigation measures or project design features – related to the development plan for Newhall Ranch, and which could reduce the number of home sites or amount of commercial square feet we are able to develop, increase our financial commitments to local or state agencies or organizations or otherwise reduce the profitability of the project, or adversely affect the length of time or the cost required to obtain CDFW’s approval of the corrected EIR.
“In addition, the ruling has resulted in delays in construction that have been taken into account in our currently anticipated delivery dates … but could result in further delays beyond those currently anticipated and reflected in our anticipated delivery dates, or changes in the sequencing of our communities, and are likely to increase our development costs.
“We also are involved in related lawsuits regarding the approvals and permits that have been issued for the Mission Village and Landmark Village development areas within Newhall Ranch, which could result in similar impacts. We continue to assess when and under what circumstances we may begin infrastructure development at Newhall Ranch based on the status of these pending lawsuits.”
Based in Aliso Viejo, Five Point is also the owner-developer of 800 acres of bayfront property in San Francisco known as the San Francisco Shipyard and Candlestick Point, as well as the 2,100-acre Great Park Neighborhoods in Orange County. Five Point is the development manager (but not owner) of the Treasure Island and Concord communities in San Francisco.
By far its largest asset, Newhall Ranch encompasses roughly 15,000 acres and is “designed to include approximately 21,500 home sites and approximately 11.5 million square feet of commercial space,” according to Five Point’s latest filing.
“Newhall Ranch will continue the tradition of excellence in community planning established by Valencia as it meets the needs of a growing population in Los Angeles County,” the filing states. “With an ideal location near existing jobs and infrastructure … Newhall Ranch is expected to be a regional commercial and entertainment center. At Newhall Ranch, we plan to build five elementary schools, a junior high school, a senior high school, four fire stations, a sheriff’s station and a public library.”