I have been keeping my eye on the brighwater project for a while now.  And just noticed on their websites their “Cliffs” product used to say from the 2m, and when I visited the sales center, they were telling me 2m as well.  I just checked the site again today and it’s been adjust to start at 1.7m.  A 300k reduction??

I have been watching this project too, but for historical reasons. This project has been around for nearly 30 years, and it was originally a 3000+ unit project. They have a really high profit margin on this project, since they acquired it on the cheap, but they are highly leveraged. They need to meet debt covenants by 2009. And, they have already had to get exceptions on the debt they currently. They are completely and totally dependent on this project. I have a feeling, in the end, they will not be finishing this project.

It will be interesting to see what happens.

Well they are under construction already, and have sold a few of the smaller units.  Why do you think they won’t finish?

Can you send a link showing they were highly leveraged?

The SEC is your friend. Here is the latest 10-Q on CALC.

Under the Revolving Loan, the Company is required to comply with a number of covenants, including a leverage covenant and a minimum consolidated tangible net worth covenant of $100 million. As a result of the sustained downturn in the homebuilding industry, the tangible net worth covenant was reduced to $80 million, effective as of September 30, 2007, for a fee of $142,500, with no change to the Company’s borrowing rate. As of September 30, 2007, the Company was in compliance with its covenants. As of September 30, 2007, the Company has taken impairment charges totaling $32.0 million which have negatively affected the Company’s earnings and net worth.
Under the Term Loan, the Company is required to comply with a number of covenants, including covenants related to leverage, a minimum ratio of EBITDA to interest, and a minimum consolidated tangible net worth of $100 million. As a result of the sustained downturn in the homebuilding industry, the Term Loan was amended, effective as of September 30, 2007, for a fee of $187,500, with no change to the Company’s borrowing rate. The amendment reduced the minimum ratio of EBITDA to interest covenant from a range of 1.0 to 2.5, phased in beginning in the first quarter of 2008 through the fourth quarter of 2009, to a range of 1.00 to 2.5, phased in beginning in the third quarter of 2008 through the fourth quarter of 2009 to provide greater operating flexibility and accommodate the Company’s currently anticipated operating results for 2008. The Term Loan was also amended to reduce the tangible net worth covenant from $100 million to $80 million, effective as of September 30, 2007. As of September 30, 2007, the Company is in compliance with these covenants. As of September 30, 2007, the Company has taken impairment charges totaling $32.0 million which have negatively affected the Company’s earnings and net worth.

There is a lot of other highlights, er lowlights, in that 10-Q. Instead of making them comply with their debt covenants, the banks just charged them $330k. Most likely, they just added it over the life of the loan, rather than a cash payment. This company is on shaky ground, and Shea is waiting in the wings to scoop them up.

Frebay:
"The Sands" - their second to smallest group of homes is listed as "starting from the 2 Millions."  That’s obviously a webpage error.  Perhaps the same is true for "The Cliffs." 
 

Laing_Lies - Glad to see you back.  I had time to check the other day, and the amount of lease expense which is allowed to be deducted as a portion of vehicle expense for business purposes is limited and it is limited in a way to make the total expense equal to that which one could expense if deducting depreciation for a purchased automobile.  There is no tax deduction advantage to leasing over owning.

awgee -
thanks!  now that the house is somewhat stabilized, i can check the blog when i have free time at work.
my biggest personal problem with leasing is the limitation on mileage. 
 

i received an email about pre-approvals starting jan 11th.  They make it seem like a lot of people are interested, and I must admit I am as well.  Do you think 1.7m is a good buy for huntington?  Where else can I get 3k sq ft ocean views for 1.7m?

frebay:
the 3000 sqft homes will be STARTING out at 1.7 Mil according to their website.  not all the homes are going to be positioned to have ocean views.

laing_lies,
i think you are correct re: the homes at 1.7.  Of the 2 premium home styles, they are releasing the more expensive one first (around 2m range).  At first this didn’t make sense to me, but now I realize that the 2m homes will be able to comp the 1.7m homes at a later phase so it will be a easier sell.

I received this in the mail today:

The first phase of The Breakers includes 2 of the 36 homes which will offer unobstructed ocean and wetland views. At The Cliffs, 25 homes with unobstructed ocean and wetlands views will be available in later phases.

So I had a chance to go to a private touring of the 2 larger neighborhoods at brightwater over the weekend.  Here’s the update, the first 2 neighborhoods sands and trails have had 10 homes close and about 6 completed unsold homes.  These 2 neighborhoods are a complete joke, 1700 sq ft for 1m!!!! Some sites have a house acting as the fence (the home is the divider). 

A couple interesting facts, they won’t be doing another release until they sell current inventory.  If prices go down, they will credit you with cash or credit for landscaping etc…  HOA is 170 for all homes, and there is no mello-roos.  It’s NOT a gated community as the coastal commission is requiring access for other homes in the area to go into the neighborhood to access the marsh trails.

The 2 premium neighborhoods are absolutely amazing, especially the one on view lots.  For anything with a view lot they are charging a 1 million dollar premium, and they said that was cheap.  Here is their current pricing which they are calling Phase 1A, or a pre-phase.  They said 100% raising prices for phase 1, since there is a very high demand for these products.  You’d figure, they would build these larger homes.

For the cliffs, none of these homes have ocean views:
plan 1
http://www.brightwaterhb.net/images/pdfs/Cliffs_plan1.pdf
1.496m
1.455m
this is at the edge of the community.

plan 2
http://www.brightwaterhb.net/images/pdfs/Cliffs_plan2.pdf
1.694

plan 3
http://www.brightwaterhb.net/images/pdfs/Cliffs_plan3.pdf
1.796m

plan 4
1.845m
http://www.brightwaterhb.net/images/pdfs/Cliffs_plan4r.pdf

The breakers which are a larger home have the following prices:
plan 1
1.896m
http://www.brightwaterhb.net/images/pdfs/Breakers_plan1.pdf
no view

plan 2
http://www.brightwaterhb.net/images/pdfs/Breakers_plan2.pdf
1.994m
no view

plan 3
http://www.brightwaterhb.net/images/pdfs/Breakers_plan3.pdf
2.994m
ocean view lot

plan 4
http://www.brightwaterhb.net/images/pdfs/Breakers_plan4.pdf
2.295m
2.996 for ocean view lot

What do you guys think of these prices?  With 375 homes in the community, i doubt they can find 375 people that can afford these homes in this market?  i’m pretty sure these homes will sell in the first couple phases, therefore making the first phase purchase a good investment, but i’m just worried how much these homes can go up in later phases.

Gawd… this project is cursed. I am not a superstitious person, but this project was never meant to be, and I would never buy there. I bet CALC goes BK, just like the other two previous owners. I have $20, on Shea finishing this project, anyone willing?

graphix - can you please lay out the history, present, future predications in one post for brightwater as you know it? i am interested in how you think this project will play out and if there are any contigencies concerning the CALC going BK. Shea taking over. Demand going down, etc. more details please.
thanks

OMG, such a nice picture of the HB pier for their website.   Of course, you’re no where near the pier.   Isn’t that land all ex-oil company storage facility land?
Since they aren’t selling yet, IMHO, they’re going to be a year too late and 50% too high.
 
 

Since most of you can’t afford a home at this community you might as well say something negative about it. I am very impressed with what they are doing there and I will be buying one with the view so I can enjoy the ocean views and all the open space that comes with it. I know most of the home owners in HB bought their home about 20 years ago and paid between $30,000 to $500,000 but times have changed and ocean views are very rare and when they are on the Bolsa Chica Wetlands how could you not buy. By the end of summer I will be in my backyard enjoying my view and my home, while the rest of you will be walking the trail looking into my backyard. I hope you enjoy the view from trail and the walk back to your car but I will be enjoying the view from the master bedroom.

What do you think the equity burn rate (monthly decline in value) will be over the next two years, $20,000 a month? I will sure envy that.

Maybe most here can not afford one of those homes, but there are a few here who can buy one of those homes with cash.  You need to get over yourself.

And whether the posters can afford one of those homes or not, they are a heck of alot nicer than you and better people than you.

Imagine that, the newest user in this community feels a need to express his superiority on his only visit with his only post.  You are the envy of everyone here HB BIG BIRD.  I wish I could be like you when I grow up.

Those houses are not expensive enough in raw dollars to be remarkable around here, so I’m not sure why it’s worth bragging about.  But, even those of us that can afford them don’t like the feeling of being suckers.  You know, though, Big Bird, if you want to be violated by a corporation it doesn’t bother me.  A half a dozen bad decisions like that and you’ll be just as broke as those you’re looking down your nose at.  I though you and Snuffelupugus used to live in a garage anyways, so maybe that explains your inferiority complex.

Awe… it sounds like someone is lonely. I guess if I didn’t have any neighbors, I would be bored too, and feel like I have to put down others. Of course, I would be bitter too if I overpaid for a house, and watched the builder drop the price over and over again, without getting any new buyers. Maybe HB likes to be alone, with his attitude, I doubt he he/she has many friends. BTW, it will really suck when they go BK, and you need to talk to someone in customer service, because they won’t be there. You know what though? When the new builder takes over, after buying the land and homes on the cheap, and they sell them at fire sale prices, you can buy another one. This way you could tell us how difficult it is to decide which backyard to sit in, and enjoy the smell of the run off after a good rain storm.

I love how the times have completely flipped on who is bitter, and now it is the bitter homedebtors that are angry.

graphrix,
can you tell me why you think this project is cursed? and why you don’t like the area?  i am VERY interested in these homes, but i know it’s very difficult to sell 375 million+ homes in 2 years so there might be a price hold or drop or more incentives in the later stages.  i am pretty set on buying in this community, but would like advice on buying in an earlier phase or waiting for a couple later phases.  i am positive that the 2 higher communities will sell as their homes are far superior than the first 2 communities.  also, can you give me a reason why i shouldn’t buy in this community?  i love the area, as it’s close to the beach, close to long beach/la, and most importantly close to lil saigon.

HB Big Bird

Are you planning on buying cliffs or breakers?  They only released 2 ocean view homes and they won’t be done until october.  i agree w/ you that the homes and the location is great, i’m trying to figure out why everyone is against this project.

there are 375 homes planned for here?  that’s a pretty big number of homes.

All the following is just my opinion.  Facts may vary.
If you are retired or work from home, it’s a nice location.  If you don’t, it sucks.  During rush hour, it’s 20+ minutes to the freeway. There’s only one and it will put you on that freeway at a point were it is gridlocked in both directions.
Then there is the land.  Suffice to say, that land has not been treated well, I woudn’t want to depend on it to treat me well.  Have you ever smelled Newport’s back bay when the tide is out twice a day?  Since Bolsa is intertidal marsh, think of it as 20X worse.  Plus like much of HB, is ex-oil land.   hmmm, beach front oil land that is literally, virtually that last to be developed.  Is your spidey-sense tingling?
Third, it’s not beach.  It’s sludge bay.  Bolsa just got re-opened to ocean water tides for the first time in about 20 years.  That’s 20 years of built up run-off and contamination.
Fourth, it’s still not beach, if you want to go to the beach, I’d lay 10:1 odds, you get in your car.  You still have to go out to PCH which during beach time, sucks.
Fifth, it overlooks Bolsa Chica State beach.  Which during summer and much of winter, becomes RV refugee land.  Bonfires of painted pallets will blow nicely right into your two million dollar partial ocean view. 
Six, in winter rains.  The land is sand sediment…
Seven, it’s south of Huntington Harbor.  Nothing wrong with that, but like Huntington Harbor, it’s surrounded by some unpleasantness.
 
 
 

God yeah, who’d live in one of these places over a nice place in Laguna up on the hill with ocean views?  Less house, for sure, but such a better location.

To the bloggers who are negative about this community( graphix,winex,elricseven,awgee,irvinerenter),
        This site works perfect for you because we don’t know who you are. What we do know you will not be buying here, even if prices drop you still won’t be able to afford it!!!! My parents taught me at a very young age to work hard provide shelter for your family and follow your dreams. It sounds like the negative bloggers on this site skipped a couple of those steps so now they are mad because they will not be able to enjoy this upcoming community in HB. I bet they were blogging negative stuff when Seacliff was built and it was over-priced back then, but look what happened to Seacliff prices… do I need to say more. Graphix, I will take you up on your bet of $20.00 on Shea Homes completing this community. As I said on my first blog, I will enjoy the community and the views and can’t wait for the builder to release the location I am waiting for.