Emile Haddad, the real estate executive who spearheaded the conversion of an old airbase into housing, athletics and entertainment at Irvine’s Great Park Neighborhoods, is leaving his leadership role at the end of September.
Five Point Holdings announced late Monday, Aug. 23 that Haddad will transition Sept. 30 from day-to-day management of the company he founded to senior adviser. He will also remain on Five Point’s board of directors and serve as chairman emeritus.
Five Point’s new management team includes Stuart Miller, executive chairman of Five Point’s long-time partner and homebuilder Lennar; and Lynn Jochim, Five Point’s chief operating officer, who is being promoted to president.
In addition to its Orange County development, Five Point also has large real estate projects in Valencia and San Francisco.
Reached by phone Monday night, Haddad said he’s not leaving the company but instead is stepping back from the grind of running a publicly-traded company with more than 40,000 homes under development. He said he will now “focus on the next opportunities.”
While conceding the move is, in part, to have more time with his family, his primary goal is to work on big-picture ideas to boost stockholder value, fulfill the company’s dream for the Great Park while also working on public interest projects like promoting health care projects in Irvine and attacking the state’s housing crisis.
“Today’s announcement was for me to step back from the day-to-day operational responsibility and the management of the public market and all that and focus on the things I’ve always enjoyed focusing on, and that is what is the next opportunity within our communities,” he said.
Haddad, 63, conceded the news is a bit of a surprise, saying that even his family and some top company employees didn’t know about the changes until just before they became public.
“I’m not surprised you’re surprised,” Haddad said. “But I can assure you there’s no health (issue). I wasn’t fired. It’s just a repositioning for us to move forward and create the right value for the company. … At some point in time, you need to start realizing that there are other things you can focus on.”
Haddad said he still plans to keep his office at Five Point’s headquarters just south of the Great Park in Irvine.
Haddad said he’s not being replaced as chief executive officer. With Miller, a Wall Street pro at the helm, Jochim handling day-to-day operations and himself acting as a company adviser, “there’s no need for a CEO,” he said.
Long voyage
His real estate work has been quite a contrast to his fleeing his native Lebanon amid a civil war to come to California in 1986.
He was working as chief investment officer for Lennar Homes in 2005 when the shuttered El Toro Marine base came up for auction. It was his job to make sure Lennar was the top bidder, no matter the cost.
But in 2008, Lehman Brothers – the company financing the Great Park development – collapsed as the economy melted down into the Great recession.
“People don’t realize … how close this (project) got to the abyss, and the effort that was needed to keep it together,” Haddad said years later.
California then eliminated redevelopment agencies in late 2010, a move that eliminated another financing source for Haddad’s Great Park dream.
Haddad convinced the city to double the number of homes to be built, allowing Five Point to move forward with its housing development as well as be the Great Park’s developer.
A company statement said Haddad will “focus on enhancing our communities to stay true to the company’s vision and will maintain critical relationships at the state and local level, as well as focusing on new ventures and initiatives the Company may consider pursuing in order to enhance shareholder value.”
“Emile Haddad has been an innovator and leader in the national community development landscape,” Miller said. “He founded and grew Five Point from its inception to its current maturity. He has developed an exceptional management team that is prepared to continue to develop the extraordinary Five Point communities as a true credit to their surroundings while driving shareholder value.”
Surviving a virus
At the Great Park, Five Point — the master developer and a 37% owner of the project — has sold 6,970 home sites out of 10,500 planned. In 2021’s first seven months, builders have sold 516 homes. At the 21,500-home Valencia FivePoint project next to Magic Mountain, 110 homes have sold since sales launched in May. Builders already have bought 1,268 lots at the northern Los Angeles County development.
Five Point became a public traded company in May 2017, with Lennar its largest shareholder, controlling 39% of all shares. Haddad, who owns 3% of Five point’s shares, earned $6 million in 2020, including a $5 million bonus.
Company shares have not fared well in the pandemic era. Since February 2020, the homebuilder has earned shareholders 7% returns vs. 80% for a key homebuilder stock index.
Haddad said projects he will focus on include building Irvine into a hub for health care and life sciences, keying off the new City of Hope cancer facility being developed on land leased from Five Point. He wants to stay involved in initiatives coming out of Sacramento to boost homebuilding and address the state’s housing shortage. And he also intends to concentrate on developing the lifestyle and entertainment venues planned for the Great Park.
“I’m going to spend a lot of time working with the city of Irvine to develop that,” he said. “If you’re running a public company, you don’t have the time to do all that.”
