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McMillin Cos. Poised To Launch $4B Project

CORKY MCMILLIN COS.

Chairman: Scott McMillin.

CEO: Mark McMillin.

Revenue: Not disclosed.

No. of local employees: 300.

Headquarters: Point Loma.

Year founded: 1960.

Company description: Residential, commercial and mixed-use developer.

Key factors for success: Family-owned company emphasizes longtime community involvement, geographically diverse portfolio spanning several property sectors.

The Corky McMillin Cos. has marked 2012 as the year construction will begin on the long-planned $4 billion mixed-use project in eastern Chula Vista the company is developing under the name Millenia.

Scott McMillin, chairman of the San Diego-based company, says ground could be broken as early as this summer on the first high-density residential components in the Otay Ranch community, likely starting with attached homes.

The 210-acre, master-planned project, eventually expected to include up to 3,000 homes, apartments and condos with related commercial and civic amenities, received a crucial boost last year when McMillin Cos. brought in Stratford Land of Dallas as an equity partner.

“The project is in the final engineering stages, and we anticipate that there will be a groundbreaking taking place later this year,” said Diane Belcher, a regional director of investments for Stratford Land.

Belcher said the long-range mix of residential product types is still being finalized with McMillin, and offerings could include “live-work” configurations that incorporate residential and business elements in the same building. Developers will be monitoring residential demand in the coming months as they look to sign up on-site retail, service and other businesses to serve the community.

McMillin Cos. Senior Vice President Todd Galarneau said the first phase of residential units will be primarily multifamily, including rental and for-sale apartments and condos, although the exact number of units has not been finalized. Developers are also seeking out firms to potentially build a hotel in an upcoming phase.

Improving Economy

McMillin said an improving economy is helping his company make progress at Millenia and several other previously stalled residential developments in its geographically diverse portfolio, usually with a partner or guest builders. That includes single-family projects in places like Branson, Mo.; San Antonio, Texas; and California’s Central Valley, as well as Riverside and San Diego counties.

However, he said the developer is starting out 2012 with the same cautious approach that typified its strategy of the past two years. For instance, the company this year expects to build about 500 homes nationwide, on par with 2010 and 2011 but still far from the 2,000 constructed in 2006.

The company remains focused on “right-sizing” operations to fit a conservative outlook, and its staffing has held steady in recent months at around 450, including about 300 employees in San Diego County.

“We are carefully monitoring what’s happening with the economy and consumer demand, and what’s happening in the capital markets — on both the equity and the debt sides,” McMillin said. “We will be looking for excellent opportunities on projects where we feel we can add value.”

Homebuilders countywide have generally seen demand rise in the past year, reflected in higher permit values for single-family construction projects, which were up 16 percent in 2011 from the prior year, according to the Construction Industry Research Board.

However, residential construction in the local market remains tilted in favor of multifamily projects, primarily apartments, a sector with rising consumer demand that saw building permit values increase 65 percent in the past year.

With his brother Mark, the company’s president and CEO, Scott McMillin has now been involved for 30 years in various positions at the firm started in 1960 by their late father, Corky.

Developing Liberty Station

The company has responded over the decades to shifting economic climates by remaining diverse in its sector operations and product mixes. For instance, McMillin Cos. is the master developer at Liberty Station, the mixed-use project being built out in several phases at the former Naval Training Center in Point Loma.

McMillin and its commercial partners have brought in several office, retail and restaurant tenants at Liberty Station recently, including Stone Brewing Co. and the upcoming Sol Markets organic grocery store. In another section of the former military base, a separate developer is working with the city on plans for a proposed hotel with up to 650 rooms.

Within San Diego and Riverside counties, McMillin’s company is involved in single-family projects where homes are now slowly rising from the ground after long delays, in cities including Carlsbad, Santee and Lake Elsinore. McMillin said another division, focused on residential real estate brokerage in the South Bay area, has seen increased customer activity in the past year.

Yet another McMillin company, known as McMillin Racing, has racked up numerous wins in the past two years on the desert racing circuit, an organized series of competitions deploying trucks, buggies, motorcycles and other off-road vehicles at several U.S. and Mexico sites.

The sport allows the McMillin family to indulge in a passion first fueled by Corky in the mid-1970s. Team McMillin now includes Scott and Mark, along with a third generation — Mark’s sons, Daniel and Luke; and Scott’s children, Andy and Jessica.

“It’s in our blood and part of our family tradition and history,” said Scott McMillin.

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