Developer Shopoff Realty Investments is looking to turn a former oil storage tank facility in coastal Orange County into a $500 milllion mixed-use project providing affordable housing in one of California’s most expensive regions.
The developer plans a project spanning 29 acres after receiving unanimous approval from the Huntington Beach City Council. The project is years in the making and has received the go-ahead from the California Coastal Commission, whose approval is required for developments located in coastal-adjacent areas deemed environmentally sensitive.
Shopoff is the master developer of the project and will enlist other developers in plans calling for about 200 for-sale single-family houses, a 50-unit affordable apartment complex and a 215-room boutique hotel with 19,000 square feet of retail.
The single-family homes will include attached and detached units, though pricing has not been determined. Hotel branding and retail tenants have not been announced, but Shopoff is planning to reserve 50% of the affordable apartments for hotel workers in the development.
A spokesperson for Irvine, California-based Shopoff said the project at full buildout would represent a total investment of “more than half a billion dollars” by Shopoff and its partner developers. Shopoff plans to break ground by fall 2025 on the project, located off Magnolia Street near the Pacific Coast Highway.
The developer purchased the site in 2016, and vacated oil storage tanks on the site were demolished the following year and the land was since cleaned up. CEO William Shopoff said in a statement that city council’s 7-0 approval marked a “major milestone” for the project in northern Orange County, which he said will help in “brightening this historically blighted stretch of the coast.”
Developers are seeking to transform a former industrial site to add much-needed housing to an Orange County coastal area that remains among the most expensive in California for residential properties in particular. The Shopoff statement said the affordable housing component “is vitally important to the success of this project, as it will allow workers to live in the city where they are employed, avoiding lengthy daily commutes.”
As with many Southern California coastal communities, housing demand is high while supply is tight in Huntington Beach. CoStar data showed the apartment vacancy rate for the city’s 15,500 market-rate apartments hovers at just 3.1%, second lowest in Orange County after Newport Beach.
“There’s probably pent-up demand for housing in Huntington Beach and little development to speak of,” said Jesse Gundersheim, senior director of market analytics for CoStar Group in Orange County. “No market-rate apartments have been constructed in the city in over five years, although a few projects underway will reach completion in 2025.”
CoStar data showed Orange County’s apartment vacancy rate of 4.6% is second lowest among the nation’s 50 largest apartment regions and well below the national vacancy rate of 7.8%. Orange County’s 5,319 apartments under construction represent just 2% of total current regional inventory, and Huntington Beach’s 380 under construction represent only 2.2% of existing city inventory.
According to the National Association of Realtors, the median listed single-family home price in Orange County was $1.3 million in August, up 9.8% from a year earlier.
Shopoff in recent years has spearheaded several projects involving repurposing buildings significantly from their original uses. It is in the process of redeveloping the aging Westminster Mall in Orange County to include more than 1,000 apartments.
Shopoff also has several industrial warehouse projects underway or in planning stages in the Phoenix area and Southern California’s Inland Empire.