Silvercrest Reveals $70-Million Plan for Prefabricated Homes in Orange
Silvercrest Corp. said Wednesday that it is teaming up with a Watt Industries subsidiary to build $70 million worth of prefabricated homes on 100 acres in Orange.
The 600 homes are expected to be the largest factory-built home development in Orange County--and one of just a few that have been built in the county in nearly a decade.
The proposed, four-year project--designed to provide affordable housing for adults and senior citizens on acreage that now contains a sand and gravel pit--will require zoning changes and other government approvals.
Gary King, chief financial officer of Santa Ana-based Silvercrest Corp., a producer of prefabricated housing, said Silvercrest and Watt Industries, a major Southern California home builder, are forming a joint-venture corporation to buy the land for $15 million from CalMat Properties Co. Inc. He said the sale is expected to close by July 1.
Ray Watt, chief executive officer of Watt Industries, whose Watt Pacific subsidiary would hold a 75% interest in the joint venture, with Silvercrest taking a 25% stake, said Wednesday that it was “premature” to talk about the project. “Call me in about two weeks,” he said.
“It is really not that detailed a plan yet,” agreed Don Greek, an independent civil engineer who has been hired by Silvercrest for the project. But Greek, who as chairman of the Orange Planning Commission must refrain from voting on the project, said he believes it offers “great opportunity” for helping to solve the city’s estimated 4,000-unit shortfall of housing that senior citizens can afford.
In addition, he said, the developers are willing to dedicate about 14 acres to the community. The city needs a new YMCA site, a community center, a medical clinic and a Little League field--all of which he said might be accommodated in the development.
Greek said preliminary development plans for the 100 acres--which are bounded by Collins Street on the north, Spring Street on the south, Santiago Creek on the west and by Prospect Avenue on the east--call for building a low-cost mobile-home park for senior citizens on the southern part of the property and an adults-only mobile-home park to the north.
King said it hasn’t yet been determined if the senior housing--consisting of about 200 units--will be sold or leased, or a combination of both. He said that the 450- to 650-square-foot, one-bedroom units, designed as duplexes, would rent for $375 to $475 a month. As another option, he said, senior citizens could buy the units and underlying land for about $45,000 or buy only the units for $22,000 to $25,000 on a ground lease ranging from $125 to $135 a month.
In return for providing affordable housing, King said Silvercrest hopes to receive cooperation from the city, such as an expediting of plans through the approval process and possibly special bond funding.
Stan Soo-Hoo, administrator of current planning in Orange, said that the project is “very complicated” and that study will be needed to make sure it is “compatible with land uses in the area.”
He said “one of the attractions” of using prefabricated housing on the former gravel mining site is that it will not need much grading and soil engineering.
King of Silvercrest said Watt Industries obtained an option to buy the land and sought a partnership with Silvercrest after it became apparent that prefabricated housing would be appropriate.
Santiago Corp., now a Silvercrest subsidiary, developed another mobile-home park called Santiago Creek on yet another sand and gravel pit in Orange that is close to the proposed mobile home park site. King said Santiago Creek was one of just two new mobile-home parks built in Orange County in the last eight years. The other, he said, was Lake Park in Santa Ana.
King noted that in January, 1986, Silvercrest acquired Santiago, which is a development and management company for mobile-home parks, to increase those facets of its business.
“We recognized that available mobile-home spaces in our market areas has been shrinking,” King said, because rising land costs in Southern California was slowing new park development. In turn, mobile-home sales were declining.
Therefore, he said, Silvercrest decided to seize the initiative and broaden the market for its own product by getting into developing mobile-home parks. He said Silvercrest will manufacture all 600 homes for the Orange project at a plant in Corona. In addition, Silvercrest subsidiaries will design, build, market and manage the park.
