Woodbridge hopes to build this summer
“The hope is that we can actually get something on the ground before the end of the year. We’ll be looking for the lowest (amount to pay) and the easiest thing to do just so we get something started. We know it’s been a long time and people have been wondering. We feel we had good reasons for not being here and doing something, not the least of which is the economy,” David Wade of Woodbridge at Portola told a special joint assembly of the city’s Planning Commission and City Council March 20.
David and Connie Wade, Wade Associates, appeared before a full house of city officials and interested citizenry as part of an annual review stipulated in their development agreement with the city.
The review is to demonstrate “the developer’s good faith compliance with the terms and conditions of the agreement,” and the council did not withhold its approval.
At their last review in December 2010, the Wades were in the midst of enduring a financial crisis by their lender and had little to offer but hope and patience.
But Woodbridge endured and this time Wade thought his lender difficulties well on their way to resolution and told the council and commission, “We have a game plan and so our expectation is that we’re going to be moving forward.”
The extensive project would eventually double the size of Portola at build-out. This was originally expected to be in 2027, but in today’s economy it will most likely take longer.
The project is located at the end of Gulling Street and behind the high school. It is entitled for 1,005 dwelling units in a mix of rental apartments, condominiums, live/work residences, cluster residential and conventional single-family dwellings along with up to 170,000 square feet of commercial space in a distinct village center.
Unlike other major developments in the area that have targeted affluent retirees for large and expensive homes, Woodbridge targets a more modest clientele.
In addition to providing a broad range of housing, Woodbridge has agreed to provide the city’s state-mandated requirement for a percentage of “affordable homes” in Portola.
With this in mind, Woodbridge has designated 12 percent of its units, approximately 120, to this category aimed at moderate- to low-income homebuyers.
Wade gave an extensive overview of the project, outlining not only the historical sequence of events and associated costs, but showing detailed maps of the various parts of the project and how they would be developed in phases.
“The entire project is designed to pay for itself. That’s always been the principle,” Wade said. “We make enough on one piece to do the roads and infrastructure for the next piece and so on.”
Even in this economy, Wade remains confident of his plan. “If we’re cautious and don’t get ahead of ourselves, there is a market for us.”
Integral to his city review, Wade discussed his financial arrangements and how they had endured and not endured the financial crisis in the housing market.
“We began the project with a lender who had given us a contract for a line of credit that was more than sufficient to build this entire project out. Around 2007, unbeknownst to us, they took our note and used it as collateral for a large line of credit with a large national bank. We were one of 14 projects this happened to,” Wade recalled.
His lender started to get into trouble in 2008 and in 2009 — when the Wades had an open trench for electrical utilities for the courthouse at Woodbridge and the state was threatening to sue if they didn’t finish, while a local contractor expected payment — his lender stopped paying at all. His lender ended up in bankruptcy, but the national bank plans to buy out the Woodbridge note and eliminate the original lender.
“We’ve been working on it (a private placement offering) for six months. With that in place, we’re ready to go,” Wade said.
Currently, Wade is looking at three potential sites for beginning construction. Two will need improved maps that will come before City Council before construction can begin. A pressurized water tank will be needed to raise water pressure sufficiently for construction in the area.
Different lots trigger different requirements outlined in the development agreement and some of the prerequisites are more costly than others. All of these considerations were spelled out and will be analyzed in future months as the Planning Commission and the council review and grant approvals for final maps.
Local builders, 32 of whom responded to a Woodbridge ad several years ago, will be watching.