2 Major Developers Begin Significant Restructurings
Hurt by sagging sales and lack of financing, and anticipating a long-term slowdown in residential construction in the region, two major Orange County developers have begun significant restructurings.
Woodcrest Development Inc., Southern California’s fourth-largest home builder in 1990, said Thursday that it will lay off more than a dozen people, including several top regional executives, as it consolidates its Orange County and Riverside County divisions within the corporate headquarters in Irvine.
And Arvida Co.'s Southern California division, developer of the exclusive Coto de Caza gated community, has postponed indefinitely the opening of its newest project, the 3,150-acre Talega community in San Clemente.
At Woodcrest, President Ronald J. Gilles said the reorganization, which won’t affect the company’s San Diego division, will result in the layoff “just under 10% of our 200 employees.”
Among those being laid off are Tom O’Donnell, president of the Orange County unit; Steve Swanson, the unit’s vice president for marketing; Jeff Moore, president of the Riverside division, and Jack Thompson, vice president for construction in that division.
James Highland, corporate executive vice president, will take over as president of the new consolidated division, Gilles said.
Woodcrest reported sales of 722 homes in its fiscal year ended Sept. 30, down from 1,122 sales last year. Gilles said the company expects to sell 800 homes in its current year.
Gilles said the restructuring is in response to the current building industry slump and in anticipation of what Woodcrest officials believe will be a long-term slowdown of new construction in Southern California.
He said Woodcrest, like most other builders, is having increasing difficulty obtaining acquisition or construction loans from banks and other lenders.
That so-called credit crunch also was cited by Arvida for its slowdown.
The company has been doing grading and other work to prepare its Talega project for development. Plans call for a 4,965-home community with two 18-hole golf courses and a business park.
Recently, however, Arvida laid off several of the key people involved in developing Talega, including Kevin Canning, head of land development efforts for the Southern California division.
John Yelverton, division president, said Talega’s grand opening has been postponed indefinitely.