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Irvine officials and FivePoint CEO Emile Haddad last month unveiled an ambitious $250 million water polo stadium plan for the Western Sector of the Great Park, one that could easily leave the impression that the developer not the city would be providing bridge financing to build a complex for the national Olympic Team, USA Water Polo.
Yet a closer look at the deal reveals that it’s really the homeowners of the growing Great Park Neighborhoods complex that are floating the bill for the new water polo facility.
And it isn’t exactly clear what they just bought.
It took about a week of reporting to obtain general cost estimates from city officials and the developer.
Not one city council member or the developer had any idea about the exact cost to each homeowner – even though they voted to approve the concept.
Irvine Mayor Christina Shea said the Great Park residents pay those fees as a normal cost that other Irvine residents have already put out for their own communities, and that this was understood by everyone moving in.
“Other local communities have already contributed to their local communities,” Shea said. “All of this is disclosed to the residents in the Great Park area, so it’s not a surprise, it’s not like anything has come forward, they all had to be disclosed before they purchased their homes.”
Yet exact details on the water polo proposal are hard to come by.
City officials pegged the cost of the water polo stadium complex at roughly $250 million, which they estimate could include three pools and indoor basketball and volleyball courts. The funding will also be used to establish the necessary infrastructure for the center and a new parking structure.
Beyond general estimates, city officials seem to have very little information in the way of public details on the $250 million stadium plan, other than artist renderings.
According to public records and interviews with officials, the project will be financed by fees from a Community Facilities District (CFD), which is a specific area that pays an additional tax for upkeep of public facilities, in this instance, the development and maintenance of the Great Park.
The Great Park Neighborhoods tax district has been in place since 2013, and has been the source of most of the public infrastructure development there, according to city attorney Jeff Melching, although he was not able to provide a listing of specific projects the CFDs have funded.
These types of special tax districts usually take a vote of the homeowners to establish.
But in the case of the Great Park, as is the case with many master developments, the main homeowner is the developer.
According to state law, as long as a developer owns 60% of the land in the district, they can control any decisions on the future of the tax district’s approval.
Thus the developer, not the community, makes the decision about what gets built, in this case a water polo stadium.
The homeowners, eventually, get the bill.
Here’s how it’s generally expected to work, according to officials.
According to Melching, construction is financed by putting out a bond that is paid back off of the taxes from that district, allowing construction to move forward while the money is paid back over the course of several decades.
When funds come in from the additional taxes, the money immediately goes out to pay off the most important of the bonds, according to several city officials. Any leftover money goes towards paying the next item on the list of importance.
FivePoint is no longer responsible for paying for the taxes on the land once homeowners move in, so the responsibility of payment moves from the development to the homeowner.
Just over 3,000 homes are currently occupied in the Great Park neighborhood, according to FivePoint.
These types of special tax districts are generally used to develop core public infrastructure in new neighborhoods, raising questions over the legality of using the funds to develop a sports center.
Despite the fact that this center will be a new home for USA Water Polo, the organization isn’t required to contribute any funds to the new aquatic center.
According to USA Water Polo CEO Chris Ramsey, the non-profit has already raised nearly $10 million in pledges to contribute to the facility, but acknowledges the rest will be financed from Great Park residents.
Yet there are also open questions about how much access the public will have to the facility they paid to build.
“Most of what we do is open to the public, I think you can comfortably say more than 75% of the center’s activities will be open to the public,” Ramsey said.
There are also open questions about how the idea of a water polo stadium even developed.
According to Shea, talks over USA Water Polo moving to the park have been ongoing for roughly the last two or three years, while Councilmember Farrah Khan, who also serves as the chair of the Great Park Board, had no idea when discussions began.
According to USA Water Polo CEO Chris Ramsey, they’d been in discussions with Irvine to move since 2007.
“There were a lot of changes over the past dozen years, but I began a conversation with Irvine then and we’ve continued to have conversations over all this time,” Ramsey said.
Mayor Pro-Tem Anthony Kuo said that the decision to establish the plan of a water polo center without the finished plan is common in development.
“We all like the concept of having USA Water Polo, having these components at the Great Park and in our community,” Kuo said. “All the other details, you know with what the signage will look like, what the layout will look like, that’s just a natural progression of how development is done.”
City Councilmember Melissa Fox, who was not present for the meeting where the decision was made, said that the Great Park could benefit from more varied development.
“I’ve been working with USA Water Polo, I’m not opposed to them. I think that’s a good thing for our city. I think we’ve done a lot for sports and we need to balance out the park more,” Fox said. “I’m concerned that we’re not developing the cultural aspects of the park.”
Further discussion on the water polo center is set for February 2020, when FivePoint is set to return with plans for the center and a new cost estimate.
Clarification: An earlier version of this story included an incorrect cost estimate for the water polo stadium from a developer representative.