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Costar: FivePoint Holdings Chief Executive Bets on Building Sustainable Communities

October 8, 2019

Emile Haddad Donates $1 Million to the USC Sol Price School of Public Policy


Emile Haddad, chairman and chief executive at developer FivePoint Holdings LLC, has been

involved in creating of some of California's most prolific mixed-use, master-planned


Lennar Corp., one of the nation's largest home builders, created FivePoint about a decade

ago to oversee its California communities and developments. Today, the firm, which went

public two years ago, focuses on sustainable communities that offer homes and commercial,

retail, educational and recreational properties as well as civic areas, parks and open spaces

across Orange County, Los Angeles County and San Francisco.

FivePoint's marquee developments include Great Park Neighborhoods, a housing

community with parks, swimming pools and a sports complex in Irvine, California, where it

owns other properties, and the San Francisco Shipyard-Candlestick, a community with

creative work spaces, artist studios and public park land.

The company is also behind the proposed community formerly dubbed in

northern Los Angeles County. That master-planned community is meant to add 21,500

homes to the Santa Clarita Valley, but had been stalled by lawsuits for years before the

developer came to an agreement with local groups and got the project's environmental

review certified by the L.A. Board of Supervisors in 2017. FivePoint renamed the community

this year to mirror one that it successfully built nearby: Valencia.

Haddad, who had been chief investment officer at Lennar before taking the top spot at

FivePoint, is also chairman of the University of Southern California's Lusk Center for Real

Estate and a member of the USC Price Planning Program Advisory Board. He recently

donated $1 million to the USC Sol Price School of Public Policy, a school focused on urban

planning, public policy, public administration, real estate development and public health

policy and management.

A native of Lebanon, Haddad hopes his donation to USC will help support new faculty and

scholarships, among other causes. He is also concerned about building sustainable

communities which, generally, include a focus on a healthy environment and economic


CoStar News: Why did you give this donation to the USC Sol Price School of Public

Policy and why at this time?

Emile Haddad: » The donation will draw the best minds to the USC Price School and Lusk

Center for Real Estate by supporting real estate faculty recruitment, student scholarships

and a series of disruptive dialogues that will address future sustainable communities. By

bringing together higher education, industry and the leaders of tomorrow, we can design a

vision for how government regulation, public policy, technology, transportation and

development should be integrated into a new approach to housing and affordability.

One example is regulations mandating how many parking spaces a multifamily project must

have. Often, those regulations don’t account for how urban renters will get around in 20

years. Most won’t own a vehicle. And yet apartments are being developed based on today’s

vehicle usage and an 800-square-foot apartment is actually a 1,200-square-foot apartment

when you consider parking.

Tell us about some of FivePoint Holdings' projects.

» We developed the community of Valencia, the first phase, which today has 20,000 homes

built and 20 million square feet of commercial space. Before we actually acquired the

property, the company decided to have the second phase be called Newhall. And when you

have a community called Valencia, which is hailed as one of the best communities in the

country, there’s no reason not to continue with that. So from my perspective, we’re just

continuing to build the same community of Valencia going forward.

Newhall is the second phase of it. It’s a continuation of it. Because it came in two phases of

the approval process, it was, I think, viewed as if they are two separate communities. When

all is said and done, the city of Valencia is going to double in size. The future phase, which

is what we’re developing right now, will be 21,500 homes and 11.5 million square feet of

commercial space. In Valencia, we’re putting an additional 2,000 charging stations in the

community as well as a charging station in every home.

Why are sustainable communities so important to you?

» If you do not look at things holistically, you’re not going to have a sustainable

community. If you have a society that’s all rich or all poor, if you have a society that is all

one color, that’s also something that is not sustainable. As we look into the future, we need

to create a place that has diversity to it, that has a mixture of people from all income levels

who come together to collaborate.

For instance, what we're doing in Irvine right now, we have a community that has about

3,700 homes occupied. We started building here about five years ago. Out of the 3,700

homes, the range of pricing of homes goes from the $400,000s to $2 million, so it’s a very

wide range of home offering that caters to different income levels. As part of the 3,700

homes, 544 of those are built for people who meet the very low income threshold; those are

families as well as retirees.

So you have retirees who are living on their retirement income who would have never been

able to live in a city like Irvine and live next to somebody who’s buying a home for $2

million. We’re mixing them together. Then, you have families who are very low income who

are living in homes that are next door to homes that are $1.5 million. More importantly, the

kids from both families are going to the same public schools that we have built, state of the

art schools, to learn together and not differentiate their access based on income.

What do you think about rent control?

» I have concerns about knee jerk reactions. I have concerns about when we try to fix an

issue that has been going because we didn’t focus on it early enough, and the fix becomes

the creation of another problem. Rent control and these things are all trying to deal with an

underlying problem that we’ve been dealing with for a long time, and that’s not creating

enough affordable housing.

So I understand why people are doing it, but we can’t live looking into the future where we

fix one problem and create another. I’d much rather do what we’re doing right now with

USC and have this become a growing collaboration to start looking at long-term solutions

and not have the pendulum swing to one side, and then we push it all the way to the other


What kinds of issues are you eyeing between now and the end of the year?

» We are in markets that are very micro. We are only in San Francisco and Los Angeles and

Orange County. So a lot of the issues that actually might be concerning to a CEO who’s

building in every corner of the United States, I don’t have those issues.

My concern, honestly, is more long term because of the types of developments we do. I

started on these communities 20-plus years ago, and they’re going to go on for another 20-

plus years. So I tend to be more concerned and more focused on issues that are going to

create the difference long term.

If I'm running a home-building company that's building homes all through the country, I'm

going to be very much focused and sensitive to movement in mortgage rates and interest

rates that might impact my ability to build and sell homes or not. If you are looking long

term, like I do, I’m more concerned about my area, for instance, not being able to evolve

quickly enough and be in sync with the disruption that we’re seeing in the industry today,

whether it’s retail or anything else.

Therefore, 20 years from now, I look back and realize that we missed the opportunity to

position the areas we’re in to be part of the future economy, and they got stuck in the past


I look at demographic shifts. I don't look at what happens to interest rates and can I sell

more homes or fewer homes, and how can I adjust my business. I look for periods that are

20 or 30 years away and say, what are the demographics going to look like? What are the

technology shifts that are going to create a different way of living, and how do I position

our communities in the path of that change?

The original article can be found here.