-Limoneira Received $18 Million from Formation of Development
Partnership with The Lewis Group of Companies-
SANTA PAULA, Calif.--(BUSINESS WIRE)--
Limoneira Company (the "Company" or "Limoneira") (NASDAQ: LMNR)
announced today that on November 10, 2015, Limoneira Lewis Community
Builders, LLC, a development partnership between the Limoneira Company
and The Lewis Group of Companies ("The Lewis Group"), was formed.
Limoneira received $18 million ($16.8 million net of transaction
expenses) upon the establishment of the partnership in addition to $2
million the Company received from The Lewis Group in September 2015, in
anticipation of the formation of the partnership. Limoneira Lewis
Community Builders, LLC is a 50%/50% partnership between Limoneira and
The Lewis Group that will engage in the residential development of the
Harvest at Limoneira (formerly Santa Paula Gateway Project and East Area
1).
The formation of the partnership culminated with Limoneira's
contribution of its East Area 1 property and The Lewis Group's
contribution of $20 million. The funds were distributed to Limoneira
upon closing the transaction, which it expects to record as a reduction
in the basis of its investment. Limoneira expects to receive 25% to 80%
of the net cash flow of the project, based on cash flow milestones
provided in the partnership agreement, which is estimated to aggregate
approximately 70% of total net cash flows to Limoneira, including the
initial $20 million distribution, and the balance of net cash flows to
the Lewis Group over the estimated seven to ten year life of the project.
The Lewis Group and Limoneira both have significant experience in
residential development. The Lewis Group, based in Upland, California,
is a multi-generational company with a longstanding successful track
record in home building and master planned community development in the
Western United States. Founded in 1955, The Lewis Group's focus is on
land development, master planned community development, and income
property development, including commercial centers, industrial and
apartments. Limoneira, founded in 1893, has been involved in community
development in the cities of Santa Paula and Ventura since its
inception. Past real estate development projects include McKevett
Heights (1920's), The Blanchard Development (1950's), Hillsborough
(1980's) and Vista Point (1990's) in Santa Paula and Limco Del Mar in
Ventura (1970's).
Harvest at Limoneira includes the development of a 500 acre master
planned community with approximately 1,500 residential units. The
build-out of lots is expected to begin in 2016. Limoneira Lewis
Community Builders anticipates receiving security deposits from
homebuilders for lots sales in mid-2017, and the sale of lots is
expected to begin in the fourth quarter of 2017. Several homebuilders
are expected to participate in home construction at Harvest at
Limoneira. The diversity and price points of housing types will provide
opportunities to a wide buyer profile. Home prices are estimated to
range from $300,000 to $750,000. Limoneira Lewis Community Builders
expects to recognize revenue upon delivery of lots to homebuilders and
Limoneira anticipates recording its share of the partnership's earnings
under the equity method.
Previously stated projected cash flow for Limoneira over the seven to
ten year life of the project of approximately $100 million is based on
an average home price of $480,000. Limoneira estimates that each $50,000
increase in the median home price for the project will result in
approximately $20 million to $30 million of additional net cash flow for
Limoneira over the life of the project. The median home price in Ventura
County is currently $516,400.
The Limoneira Lewis Community Builders project does not include any
commercial property development. Limoneira retains all commercial
property in the Santa Paula Gateway Project, which consists of 15 acres,
or 150,000 buildable square feet, in East Area 1, and 25 owned acres
plus 8 acres optioned, or 350,000 buildable square feet, in East Area 2.
Limoneira expects to commence infrastructure development for commercial
property in the Santa Paula Gateway Project in 2017.
Harold Edwards, President and Chief Executive Officer of Limoneira,
stated, "We are excited to finalize the development partnership with The
Lewis Group and to continue to move forward developing the Santa Paula
Gateway Project, which we officially renamed Harvest at Limoneira. Both
The Lewis Group and Limoneira have significant experience over many
decades in real estate development, and our shared culture and values
will help make the project successful for both organizations. We expect
strong demand for Harvest at Limoneira's new homes to be driven by the
development's highly desirable location that is fourteen miles from the
Pacific Ocean and accessible to several major highways and the greater
Los Angeles area, as well as the limited supply of new homes throughout
Ventura County."
Mr. Edwards added, "Beyond the residential development through Limoneira
Lewis Community Builders, Limoneira is also focused on the development
of over 40 acres of commercial properties in the area. Interest from
potential tenants for the development has been very encouraging, and we
are in the process of evaluating the best options for the commercial
market. The residential and commercial development projects represent
opportunities for significant cash flow for Limoneira and are an example
of our execution on our long-term plan to unlock the value of our
extensive real estate assets. We look forward to strategically
reinvesting proceeds from our real estate development projects into our
global agribusiness, enabling us to progress on our goal to become one
of the leading citrus agribusinesses in the world."
About Limoneira Company
Limoneira Company, a 120-year-old international agribusiness
headquartered in Santa Paula, California, has grown to become one of the
premier integrated agribusinesses in the world. Limoneira (pronounced lē
mon΄âra) is a dedicated sustainability company with approximately 10,700
acres of rich agricultural lands, real estate properties and water
rights in California and Arizona. The Company is a leading producer of
lemons, avocados, oranges, specialty citrus and other crops that are
enjoyed throughout the world. For more about Limoneira Company, visit www.limoneira.com.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements are based on Limoneria's current expectations
about future events and can be identified by terms such as "expect,"
"may," "anticipate," "intend," "should be," "will be," "is likely to,"
"strive to," and similar expressions referring to future periods.
The Companies believe the expectations reflected in the
forward-looking statements are reasonable but cannot guarantee future
results, level of activity, performance or achievements. Actual
results may differ materially from those expressed or implied in the
forward-looking statements. Therefore, the Companies caution you
against relying on any of these forward-looking statements. Factors
which may cause future outcomes to differ materially from those foreseen
in forward-looking statements include, but are not limited to: changes
in laws, regulations, rules, quotas, tariffs and import laws; weather
conditions that affect production, transportation, storage, import and
export of fresh product; increased pressure from crop disease, insects
and other pests; disruption of water supplies or changes in water
allocations; pricing and supply of raw materials and products; market
responses to industry volume pressures; pricing and supply of energy;
changes in interest and currency exchange rates; availability of
financing for land development activities; political changes and
economic crises; international conflict; acts of terrorism; labor
disruptions, strikes or work stoppages; loss of important intellectual
property rights; inability to pay debt obligations; inability to engage
in certain transactions due to restrictive covenants in debt
instruments; government restrictions on land use; and market and pricing
risks due to concentrated ownership of stock. Other risks and
uncertainties include those that are described in the Companies' SEC
filings, which are available on the SEC's website at http://www.sec.gov.
The Companies undertake no obligation to subsequently update or
revise the forward-looking statements made in this press release, except
as required by law.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151116005438/en/
Limoneira Company:
Investor Relations
ICR
John
Mills, 646-277-1254
Partner
Source: Limoneira Company
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