Shopoff Snags $61M Loan for Homes, Hotel in Huntington Beach

Shopoff Realty Investments has scored a $60.9 million loan to build 250 homes and a 215-room boutique hotel atop a former oil tank farm in Huntington Beach.

The Irvine-based developer led by Bill Shopoff secured the senior mortgage loan from Lionheart Strategic Management to construct Magnolia Coast on 29 acres west of Magnolia Street and north of the Huntington Beach Channel, Commercial Observer reported.

The new loan refinances existing debt and provides funds for the development, according to Shopoff. Terms of the loan were not disclosed.

Lionheart’s Andy Klein and Benjamin Eshiwani arranged the loan for their company.

Shopoff bought the Magnolia Tank Farm, wedged between the Pacific Coast Highway and Magnolia, in 2016 for $26.5 million, or $913,793 an acre. It then spent years battling environmental groups opposed to the project, located next to a former industrial waste dump.

The project, just north of the Magnolia Marsh some 2,000 feet from the beach, was approved by the Huntington Beach City Council in 2021, then reapproved in September after it got the nod from the California Coastal Commission this summer.

Plans call for 200 for-sale homes, a 50-unit affordable apartment complex, a 215-room boutique lodge, 19,000 square feet of shops and restaurants and a four-acre park.

The apartment complex will set aside half its units for hotel workers, according to a request by the Coastal Commission. The hotel would also rent a quarter of its rooms at affordable rates.

The tank farm is gone, its soil cleaned up. Shopoff plans to break ground late this year. Its owner has said he plans to complete the project in 2027.

Magnolia Coast was fought by a coalition of environmental groups, saying the former wetland should be restored. They also said the development, if built atop a site raised to prevent flooding, would divert flood waters into nearby neighborhoods.

The former Ascon landfill, which until 1984 took in industrial, oil field and construction waste, as of last fall was undergoing an environmental cleanup. State toxic regulators deemed the development safe from contamination from the former private dump.

Shopoff Realty Investments, founded by Bill Shopoff in 1992, had $3 billion in assets under management at the end of 2023, with $477 million in property sales and financing, according to the Orange County Business Journal.

— Dana Bartholomew