New Homes Are Planned on ‘Dirty’ Land

Want to live on a former dump site for oil-drilling sludge or contaminants from weapons or aerospace manufacturing? Former HomeFed Bank executive Larry B. Faigin is betting buyers will emerge for homes on such properties after his new company cleans up and develops the sites.

Faigin is the president of Fountain Valley-based GreenPark Group LLC, whose formation was announced last week. He says his financial backers already have committed about $75 million to take over five cleanup and development projects from ESE Land Corp. Among the assets were seven ESE cleanup experts.

GreenPark’s staff and funding will multiply if all goes well, Faigin says. At many sites around the state and nation, owners and former dumpers are eager to get off the liability hook. Many cleanup methods exist: sludge-chomping bacteria, chemicals that turn pollutants into inert material, techniques that convert “dirty” soils into road-building materials.

But few companies are willing to focus exclusively on managing such risky cleanups--and fewer yet will take on the extra risks of developing housing there. The projects can easily take three or four years to complete, Faigin says.

Oil companies dislike selling such sites unless buyers have deep pockets as well as expertise. Which is where Faigin’s backers--venture capital experts at the Wall Street private equity fund Warburg, Pincus Ventures--come in. In announcing the deal, Warburg, Pincus noted that it has about $1 billion in uncommitted funds.

While the emphasis will be on environmental challenges, Faigin won’t rule out less complicated residential development. “Not every piece of ground we do will be dirty,” he says. “For a break, it would be nice to have a clean one.”

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E. Scott Reckard covers real estate for The Times. He can be reached at (714) 966-7407 and at scott.reckard@latimes.com