A California-based real estate investor and developer has acquired the subsidiaries that own The Market Common and the undeveloped land around it, a deal that one city official says could lead to development moving forward quicker on some of that vacant property.
Officials said HomeFed Corp.’s acquisition of BEI-Beach LLC and other subsidiaries of Leucadia National Corp. won’t change anything at The Market Common; BEI-Beach remains the owner of the 6-year-old shopping and entertainment center on the former Myrtle Beach Air Force Base.
Management will stay the same, and no changes to the stores or other operations are planned as a result of the deal, said Brooke Doswell, The Market Common’s general manager. The Market Common is home to a movie theater, stores such as Barnes & Noble and Pottery Barn and restaurants such as P.F. Chang’s, Gordon Biersch and King Street Grille.
“Nothing’s changing here,” she said.
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But HomeFed’s arrival could mean quicker development of some of the vacant land around the shopping hub, said city manager Tom Leath, who has met with HomeFed officials. HomeFed leaders plan to meet with the City Council on May 8, he said. It was unclear Wednesday how many vacant acres HomeFed acquired in the deal with Leucadia National Corp., which after the deal owns 65 percent of HomeFed’s outstanding common shares.
“[HomeFed seems] to have the wherewithal to do it,” Leath said. “If some of the development can happen quicker, then that’s a good thing.”
Leucadia and HomeFed already were intertwined before this deal, which closed in late March and increased Leucadia’s holding in HomeFed. HomeFed acquired some of Leucadia’s subsidiaries and received about $12.5 million in cash from Leucadia in exchange for 7.5 million HomeFed shares. Leucadia will end up owning 65 percent of HomeFed’s outstanding common shares as a result of the deal, according to a HomeFed filing with the U.S. Securities and Exchange Commission.
Leucadia officials said in a news release that the company was pleased to increase its investment in HomeFed and that the deal will optimize the value of its real estate assets and consolidate its real estate focus at HomeFed.
A Leucadia official declined to comment on the deal Wednesday. A HomeFed representative could not be reached.
The subsidiaries that HomeFed acquired from Leucadia – including those in Myrtle Beach – had a book value of roughly $160 million as of Dec. 31, Leucadia said in a news release about the deal. That includes BEI-Beach; bonds issued by the city of Myrtle Beach for roads and curb-gutter projects in The Market Common area, and properties in Maine, Florida and California, according to HomeFed’s SEC filing.
Leath said the deal won’t affect the city bonds. It was unclear Wednesday how much in bonds the deal includes.
“There is absolutely no change in the bond arrangement or status as a result of this sale,” city spokesman Mark Kruea said.
HomeFed’s projects include three master-planned communities in California and Virginia Beach, Va. It also owns a 1,544-acre vineyard in Madera County, Calif., and a 2,600-acre vacant tract in Santee, Calif., the company says.
With its newly acquired Myrtle Beach property, HomeFed officials are tweaking the master plan for future development in the area to reflect today’s trends, including possibly changing the types of units, Leath said. For example, demand hasn’t been that strong for live-work units, so the plan for those might change to something more in demand in today’s market, he said.
HomeFed has more of a development focus than Leucadia, he said.
“What we may see are things coming a little quicker than Leucadia would have brought to the table,” Leath said.