River Islands: $170M reflects confidence in housing future
Manteca Bulletin April 7, 2008
Dennis Wyatt
Susan Dell'Osso can look out her office window across the San Joaquin River and see dozens upon dozens of foreclosed homes dotting Mossdale Landing.
That view - which reflects the Northern San Joaquin Valley housing market - is why the investors behind River Islands at Lathrop are just biding their time.
"We're now looking at early 2009 for the first home to go in," said Dell'Osso who serves as project manager for the 11,000-home planned community snuggled against the San Joaquin River.
The decision to delay the actual building of homes speaks volumes about Cambay Group's business savvy, strength and confidence in its investment in the heart of what is projected to be California's growth center for the next 20 years - the Northern San Joaquin Valley.
The original target date was 2006. A three-year postponement would break most builders, but not Cambay that has poured $170 million into River Islands at Lathrop and has yet to build a single home.
Along the way they've overcome obstacles that most developers would shy away from:
• Building expensive 300-foot wide super levees to make flood protection virtually a non-concern.
• Reached a historic accord with environmental and fishing groups that will do something the state has had limited success at doing - addressing flood control and restoring fisheries in the South Delta.
• Writing checks up front for treated surface water for future residents.
• Forming an irrigation district so future residents and businesses can enjoy electricity rates at least 20 percent lower than in surrounding PG&E territory.
Dell'Osso admits to being a little disappointed about another delay but said the "market timing isn't right."
Cambay Group isn't about to devalue the planned urban gem - complete with perimeter river access, interior lake, and canals - it is creating on Stewart Tract that once raised watermelons and pumpkins.
Forgetting about the long-haul and the fact that markets are cyclical just isn't in the make-up of Cambay Group's parent company - Somertson Holdings Limited. The British Isles-based has roots going back to 1856.
Believes housing market is how 'hitting bottom'
Jumping the gun with the amount of money Cambay Group has tied up would have been disastrous. The proof is just across the river in Mossdale Landing where homes that sold for $600,000 two years ago are having difficulty attracting buyers at foreclosure prices of less than $300,000.
Against that backdrop that Dell'Osso's enthusiasm for the current housing market might sound a little wacky.
"It's a good time for local people to buy," Dell'Osso noted of prices in Manteca, Lathrop and Tracy.
She believes the unprecedented glut of foreclosures represent a rare opportunity for people to benefit from the market when it rises - as it inevitably well - again.
That isn't just loose talk. Cambay Group is not only placing the 152-year successful business record of its parent company that has been through more depressions and economic calamities than all the builders combined in Manteca and Lathrop on it but also $170 million and climbing.
"The market will come back," Dell'Osso said, agreeing that people who can afford to buy today but are hesitating because they think prices may drop further may be making a critical mistake.
"From what we're seeing it looks like it has about hit bottom," Dell'Osso said. As for putting money on the economic future of the region, Cambay Group isn't alone.
Various retail developers are in various stages of development of almost 1.1 million square feet retail space in Manteca - almost a 50 percent jump in what is currently built. Behind them, are Manteca projects being put together that will add more than 500,000 square feet of office space and in excess of 800 acres of business parks.
Cambay's long-haul, 30-year investment
River Islands - located just a few miles from Manteca - expects to benefit when job creation picks up in Manteca along the Highway 120 Bypass.
The 30-year build-out strategy calls for River Islands to keep tight control on the number of buildable lots released to hand-picked builders.
Cambay will continue to build the major infrastructure such as streets as well as developing 16 miles of river access. In future phases, they will also build more segments of the 300-foot wide super levee similar to the one that now protects the first 4,800 home sites, town center, and employment center.
The strategy is part of an overall effort for Cambay to not only protect their investment but also of those who will live, work and play in River Islands
Cambay Group first optioned over 10 square miles of land on Stewart Tract in 1989. They have made more than $80 million in actual improvements including the super levees that experts believe are the most bullet-proof ever built in California.
The project is the largest of its kind in Northern California in terms of being a self-contained community with homes, business park, schools and a town center. Its most unique feature, though, is the universal access to the river as well as internal lakes and canals being incorporated in the overall design of the community
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