Ground finally broken for Brightwater plan

After fighting for three decades with local environmentalist groups working to stave off development in the Bolsa Chica Wetlands in Huntington Beach, Hearthside Homes broke ground for the 356-home Brightwater Project on the upper mesa of the wetlands Monday.

Although the size of the project has been pared back drastically, from 5,000 proposed homes to 356, Hearthside Homes officials still were visibly relieved at its groundbreaking ceremony for the embattled project.

“I felt great,” said Ray Pacini, chief executive of Irvine-based California Coastal Communities Inc. California Coastal is the parent company of Hearthside Homes and holding company Signal Landmark, which owns rights to the Bolsa Chica parcel.

“Certainly after all the years I have been involved with the company and going through the regulatory process, I feel a sense of accomplishment,” Pacini said.

The Bolsa Chica wetlands lie north of the city, close to the Huntington Harbor area and bounded on the west by Pacific Coast Highway, Bolsa Chica State Beach and the ocean.

The proposed homes are slated to be million-dollar ocean-view units constructed on a part of the Bolsa Chica mesa.

The groundbreaking event wasn’t open to the public, which didn’t surprise local environmentalist Mark Bixby. “After so many decades of fighting for the Bolsa Chica, all the mainstream environmental organizations have come to the conclusion that the Brightwater will be built,” he said.

Happiness over embarking on the long-delayed development project has been short-lived for Hearthside Homes.

The company has recently been under intense scrutiny from the media after a couple of shareholders of publicly-held California Coastal disagreed with its decision to develop the Brightwater project.

Mercury Real Estate Advisors LLC and Mellon HB Alternative Strategies LLC own about 20% of shares of California Coastal between them, and have been pushing the parent company toward a possible sale of the project or of the company itself.

The dissenting shareholders wrote a letter to California Coastal’s board of directors, stating their obvious displeasure and voting against the board at a shareholder meeting in Irvine on Tuesday.

“Management simply cannot resist the temptation of personally pursuing the overly ambitious project of developing Bolsa Chica, even though this plan is fraught with obvious risk given their lack of experience in handling projects of such magnitude,” wrote Connecticut-based Mercury Real Estate Advisors.

“We believe that the supply in coastal Southern California is so limited that it’s not as risky as some real estate developments at this point of time,” said Ed Mountford, senior vice president at Hearthside.

“There’s a demand for new housing along the coast,” Mountford said.

California Coastal chief executive Pacini couldn’t disagree more.

“We have done much more complicated projects. It’s totally off-base to suggest we don’t have the capability to do this one,” Pacini said.

The majority of California Coastal’s shareholders did not support the dissenters at the shareholder meeting in Irvine on Tuesday.

The outcome might have been affected by California Coastal’s offer to sweeten the pot for shareholders, with a dividend of $11 to $13 per share in the next three months.

Bixby finds the infighting over the property highly amusing but thinks development on that parcel is a given.

For Bixby, what’s heartening to know is that Hearthside has also started restoration work in the lower mesa of the wetlands as part of the agreement.

“That’s some exciting news,” he said. “That area has just been so degraded by intensive human use over the years, we’re definitely looking forward to seeing it restored.”