Oct. 21, 2021
The Howard Hughes Corp. (NYSE:HHC) has plopped down $600 million
for the proposed 37,000-acre Douglas Ranch master-planned community in
Buckeye.
The proposed development — 35 miles from downtown Phoenix on the
west side of the White Tank Mountains — is expected to have 100,000
homes, 300,000 residents and 55 million square feet of commercial
development.
Scottsdale-based El Dorado Holdings Inc. and Phoenix-based JDM Partners
— which sold the vacant land to HHC, will still maintain a 50% stake in Trillium, the 3,300-acre master planned community designed as the gateway into Douglas Ranch.
While HHC will own the other half of Trillium, JDM and El Dorado will each own 25% of Trillium, said Jerry Colangelo, founder of JDM. "Bear in mind that Trillium has 10 years or less life span, it will be built out," Colangelo said. "We're plotting lots right now for the first 1,100 acres. Douglas Ranch will start sooner than later because
Trillium is going to be moving along at a fast clip. Trillium is the front door opener of Douglas Ranch." Colangelo said HHC has been on his radar screen for the past five
years, but reached out to the publicly traded company about a year ago to talk about selling Douglas Ranch in an effort to bring more capital into the proposed development.
When they finally connected about six months ago, talks moved quickly, he said. "HHC is absolutely committed to do what's required in the way of capital to make things happen," Colangelo said. "I just think there's so many opportunities going forward here. We strengthen our position in a big way."
Besides, Colangelo has worked out a deal where JDM could come back into the Douglas Ranch development, he said. "Our intention is really to stay in the game," he said. "That's already been negotiated and so that effort is going to start taking place almost immediately in terms of what we need to do." Michael Ingram, founder of Scottsdale-based El Dorado Holdings Inc., said this deal most likely is the largest transaction in the country dollar-wise.
"Douglas Ranch is absolutely primed for development," Ingram said. "After 16 years, it's ready to go. Unfortunately, a lot of my partners; some of them are deceased. That left an issue with their estate planning, spouses and families. Considering the time and all the factors, it was time for a major developer to step in and take over."
Meanwhile, El Dorado's team is working diligently with homebuilders to begin construction in the first quarter of 2022. "It will be one of the greatest amenitized communities in the West Valley, by far," he said. "Maybe in Maricopa County."
Phoenix debut The development is the Phoenix debut for HHC, which is based in
The Woodlands, Texas, just north of Houston.
It also gives HHC the country’s largest portfolio of large-scale master planned communities, with over 100,000 acres, including Summerlin in Las Vegas, and The Woodlands and Bridgeland in the greater Houston area, which all consistently rank among the country’s best places to live. The company also operates acclaimed
mixed-use developments including Downtown Columbia, in Maryland, the Seaport in New York City, and Ward Village in Honolulu.
HHC CEO David O’Reilly said the Douglas Ranch community's characteristics resemble those of the company's other communities across the country, "with a prime location, strong demographics in a thriving job market, high barriers to entry, and limited competition.”
HHC also highlighted that the community is strategically positioned in the pathway of Phoenix’s significant growth in the West Valley and has direct access to I- 10 through the Sun Valley Parkway. It is also located off the future home of the I- 11 interstate which has received Congressional approval and will connect Phoenix, Las Vegas, and Southern California, and eventually establish a new trade route between Canada and Mexico by way of Idaho, Arizona and Nevada.
“Douglas Ranch will be a catalyst for growth, an economic boon for Arizona, and an ideal strategic fit within our HHC portfolio,” said Jay Cross, President of The Howard Hughes Corporation, in a statement.
“As we shape our cities of tomorrow and deliver the new urban experiences that people and businesses are seeking today, we are designing communities with urban amenities and intelligent infrastructure integrated into expansive open settings, with convenient access to major metropolitan cities.
This transaction presents an opportunity to implement impactful ESG initiatives to
support the community and promote renewable practices. The Howard Hughes Corporation is defined by our steadfast commitment to the master planned communities we develop and operate, and we are thrilled to include Phoenix as a place we call home.”
Centerview Partners LLP served as exclusive financial advisor to HHC.
This article was originally published by The Phoenix Business Journal on October 19th 2021. You can view the original article by clicking here.
