Limoneira Plans 1,500-Home Master Plan

VENTURA, CA—Limoneira Co. has secured entitlements to build Santa Paula Gateway, a 1,500 home master planned community in Santa Paula, CA, on land currently occupied by a citrus and avocado farm. The project, which is still long away from breaking ground and beginning development, will provide Limoneira with a net cash flow of $100 million for the seven-year to ten-year life of the project. In addition to the homes, the project will also include 500,000 square feet of commercial space and 150,000 square feet of light industrial use.

“In 2004, the city manager gave us the opportunity to annex an avocado and lemon orchard and ranch that was contiguous to the eastern boundary to the City of Santa Paula,” Harold Edwards, CEO of Limoneira Co., tells GlobeSt.com. “Limoneira went through the entitlement process to convert the land from agricultural use to urban development use and then annexed it into the City of Santa Paula.” Our company is 124 years old. We actually founded the company in 1893, and in 1902, the City of Santa Paula incorporated. The history of our company and the history of the city have been integrally intertwined since the inception of both organizations. Our company has a longstanding historical legacy in community development and community building, whereby as the company took the next step in its growth so to did the community of Santa Paula.”

Santa Paula has a healthy demand for single-family housing, but a very tight supply with stunted new development and, as a result, a very high median home value of $510,000. Edwards attributes the lack of development to the SOAR ordinance that was put in place in 1991 to put new home development back in the hands of the voters. “The impact of the SOAR ordinance, which was put in place for the right reasons, was that there has been a dramatic disparity between the demand for new houses and the supply, because nobody can get open space or agricultural properties entitled for urban expansion use,” he explains. “That has been very challenging because it has gentrified the value of the existing homes and created an unattainable median home price.”

Although the median home price is high, the area still has strong demand, in large part due to a broad spectrum of industry hubs. “The population of Ventura County is about 850,000 people, and surprisingly it has a very robust and economic job base with a strong manufacturing component. People are back to work and the unemployment rate is now down below 5% in the county, but there are no new housing starts,” says Edwards. For that reason, the homes in Santa Paula Gateway will run the pricing gamut, from $300,00 to $750,000 to encompass the community demand and demographics.

Community support for the development became evident during the entitlement process. The SOAR ordinance required a public vote, which returned with a whopping 83% community approval. “It was the first real estate development project to ever pass a SOAR vote since its inception in 1991, so that was absolutely huge,” says Edwards.

The company still has to go through several approval stages and environmental inspections. Edwards estimates that land lots will be ready for development toward the end of 2017. This project represents 25% of the homes under construction in the Ventura market.