The entitlements are in place. The renderings are drawn. But Millenia, a $4 billion, 206.6-acre project that is being fashioned as the urban heart of sprawling Otay Ranch in Chula Vista, Calif., might not get its first phase underway for another three years.

Indeed, The Corky McMillin Companies, this new town’s developer, currently is looking to sign residential and commercial builders “that have a two- to three-year horizon,” says Todd Galarneau, the project’s manager and McMillin’s vice president of land development.

In an interview with BUILDER on Wednesday, Galarneau described Millenia as “a model for developing sustainable communities in the future,” and one that conforms with California’s mandates on developers to significantly reduce greenhouse gas emissions from future communities by 2030.

Located 12 miles from downtown San Diego and five miles from the U.S.-Mexico border, Millenia will take 20 years to complete, and during that period, 3,000 multifamily residential units are planned to be built. Galarneau says the dimensions and price points of these homes have yet to be determined, except that densities would range from 11 to 60 units per acre, and that 12.5% of the housing would be priced affordably.

Focus groups that McMillin conducted on both sides of the border to find out what customers wanted identified the appeal of a “24-hour [lifestyle] environment” for younger prospects and demand for both active-adult and assisted living housing from seniors.

McMillin, which has a commercial division, will probably construct 30% to 35% of Millenia, which will include 3.4 million square feet of commercial space. The company took an unusual approach to the entitlement process by designing the project first and then going to the city to get it to alter its standards. For example, Galarneau notes that Chula Vista’s parks model is “suburban,” whereas McMillin wanted Millenia to have parks with less acreage but more amenities, such as rock climbing, community gardens and interactive fountains. That process took two years, but the developer got pretty much what it wanted. “If this hadn’t been Chula Vista,” with which McMillin has a decades-long relationship, “we wouldn’t have taken this approach,” Galarneau says.

Millenia (until last week referred to locally as the Eastern Urban Center) is one of eight communities that the San Diego Association of Governments has designated as smart growth urban centers. It has applied for LEED Silver certification, and has been designed as a walkable community with the potential for 10,000 jobs. A new university and research center are planned on an adjacent 400-acre site. And the community will be serviced by a high-speed express bus system—a first for this market—that can deliver commuters to downtown San Diego in 25 minutes, and to jobs along the Mexican border in 10 minutes.

(This being California, however, nothing is ever easy. The San Diego Union-Tribune reports this morning that a group of condo owners at Otay Ranch are opposing plans to pave over a greenbelt in front of their homes for the 21-mile rapid-bus route from Otay Mesa Point to downtown San Diego.)

One of McMillin’s goals for Millenia is to create a community that would reduce necessary car trips by 38%. Other “green” features would include a stormwater runoff filtering system that returns water to the community for irrigation. The community would also use a pipeline to tap into Otay Water District’s reclaimed water system.

How soon this project gets started depends on how quickly the South Bay’s economy turns around. And there have been signs of light lately. Galarneau says McMillin has seen price stability for homes selling within the 23,000-acre Otay Ranch. The market research firm MDA DataQuick estimates that median home prices in San Diego County in January fell in January by 7.6%, to $305,000, compared with the previous month, the single biggest month-to-month decline in 22 years. But that figure was $25,000 higher than home prices in January 2009.

Realty Trac also reported Thursday that foreclosure filings in San Diego County, at 5,399 in February, were down 11.33% from the same month a year ago. But given that the county’s unemployment rate still hovers around 11%, the home foreclosure danger remains.

Galarneau says that while Corky McMillin hasn’t assigned a start date to this project, “we are actively modeling alternative phasing scenarios to determine an optimum first phase for the project, including timing and land use mixes.” That timing depends on several factors, “including continued improvement in local market conditions and the availability of financing or equity.”

McMillan’s development agreement with the city of Chula Vista is for 25 years, which means, for one thing, that it won’t need to keep renewing its permits. The city isn’t providing any financing or tax breaks, but has given the developer the regulatory flexibility it needs to be able to adjust the project to market conditions as they inevitably change during the buildout.

Galarneau is confident that, as long as McMillin remains “consistent” with the execution of its development plan, Millenia shouldn’t run into problems, either, with existing homeowners if changes to that plan are required along the way to maintain its financial viability.

John Caulfield is senior editor for BUILDER magazine.

Learn more about markets featured in this article: San Diego, CA, Los Angeles, CA.