Limoneira announces EA1
‘contribution agreement’
with the Lewis Group

September 11, 2015
Santa Paula News

Limoneira Co. is getting closer to developing East Area 1 according to a statement that noted the company has entered into a “Contribution Agreement as the initial step that will facilitate a joint venture with The Lewis Group of Companies,” a leading residential real estate investment company, for the planned development.

But the start date for selling developed lots to builders is inching closer to 2018.

“We are extremely excited to partner with one of the leading land development companies on the west coast,” stated Harold Edwards, President-CEO of Limoneira. “The Lewis Group is a 60-year-old multi-generation company that has a proven track record of developing highly successful and sought after residential projects throughout Southern California.”

The deal is still at the deposit stage but is anticipated to close in November, a transaction that involves a $2 million deposit received by Limoneira which, “upon the completion of certain conditions to close the transaction” is anticipated to close in November.

That includes the contribution of the 550-plus-acre property to the joint venture; Limoneira expects to receive an additional $18 million from the Lewis Group for a 50 percent interest in the joint venture. 

Limoneira expects to receive approximately $100 million of net cash flow over the seven- to 10-year life of the project. 

The project, according to the statement, is expected to begin selling developed lots to homebuilders during the fourth quarter of 2017.

Now known as the Santa Paula Gateway project, the proposed deal does not include East Area 2 property set aside for commercial and light industrial, 500,000 square feet and 150,000 square feet respectively located on the south side of Highway 126.

Project costs for residential development and amenities—located north of Highway 126 roughly between Hallock Drive and Haun Creek—are expected to be shared equally by the joint venture partners “until loan proceeds and or project revenues are sufficient to fund the project.”

Project funding requirements are currently estimated to total $10 million to $15 million for each joint venture partner for the first two years of the project which will create 1,500 housing units estimated to sell from $300,000 to $750,000.

The proposed development, overwhelmingly approved by voters in 2008, is expected to include an elementary school, 38-acre community park and other amenities.  

Edwards noted, “We have great respect for the significant accomplishments the Lewis Group has enjoyed over its history and we believe the shared heritage, culture and values of our companies will help make the Gateway Project a success for both of our organizations and the City of Santa Paula. We will leverage the expertise and strong reputation of our combined companies to meet the growing demand for high-quality homes in Ventura County.”

Said Edwards, “The Gateway Project is a great example of Limoneira unlocking the value of its extensive real estate assets. We believe that over time, this project will result in significant cash flows, which will allow us to significantly increase the operating results of our global agribusiness. We are confident this will enhance the long-term value of our company for our shareholders and deliver on our stated goal of becoming one of the leading citrus agribusinesses in the world.”

Mr. Randall Lewis, Executive Vice President of The Lewis Group of Companies commented, “We are delighted to partner with Limoneira on the Santa Paula Gateway project which represents a tremendous opportunity to meet the growing demand for single-family homes in Ventura County. The beauty of the Gateway Project offers a unique and highly desirable location by combining reasonably priced homes that are only fourteen miles from the Pacific Ocean and accessible to several major highways and the greater Los Angeles area.”

The Lewis Group has built more than 57,000 housing units, more than 10,000 apartments (most owned and managed by the company) and 14.5 million square feet of retail, office and industrial. It has about 450 employees.

According to its website, “The Lewis Group of Companies continues today as one of the nation’s largest privately held real estate development companies. The Lewis Group focuses on developing mixed-use planned communities and residential subdivisions in California and Nevada, as well as building and owning rental communities, shopping centers, and office and industrial parks.”

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