this phase of activities is carried on by the parent company its wholly-owned subsidiaries and a number of affiliated companies operations to date have been limited to the u s and canada recently concentration of activity and acreage has been within caiifornia the primary objective in this area of endeavor is the acquisition of strategically located raw or sub-marginal prop erty its reclamation and development and sale at a profit for residential commercial or industrial purposes although our construction and dredging facilities are frequently employed in these projects the generation of construc tion volume here is a secondary consideration our residential property functions contemplate the sale of improved land to residential builders in the instance of commercial and industrial acreage we stand ready to provide architectural engineering and building services should the purchaser of the land desire them the development and marketing of industrial and commercial property has led the company from time to time into related special projects involving the erection of income producing structures designed for a particular indus trial customer on improved property on these occasions the company has frequently arranged the long term financing by sale of the package to private or institutional investors with lease-back to the customer our consolidated investment in land development and related activities at the year-end stood at 32.4 million of this amount 13.5 million represented land development projects mainly involving 10,500 acres in california the balance of the investment represented carrying values of real estate con taining income producing improvements while 1960 operations were modestly profitable they were substantially lower than 1959 earnings in that year profits were abnormally high due to a large single sale of acreage in the south san francisco industrial tract two other factors were partially responsible for lower 1960 profits the first was the decline in demand particularly for residential acreage secondly the reduced volume of sales although profitable was barely sufficient to cover the carrying costs of undeveloped and partially developed properties among the more significant projects are moraga of the original 5050 acres acquired in 1954 4280 acres remain unsold at the end of 1960 during the year 110 acres were sold in contrast to 220 acres in fiscal 1959 this land has increased substantially in value since its acquisition and the profit margins are satisfactory during the year some favorable action was obtained on long pending zoning and the routing of a state freeway which will connect the property to metropolitan oakland these developments will be helpful in future sales alameda this development originally consisted of 400 acres which the company created from submerged tidelands by hydraulic filling operations in 1956-57 sixty-five acres of the property were allocated to an attractive regional shopping center which serves greater alameda and the balance of the acreage is being developed and sold for residential use rental revenues from the shopping center continue to increase and are approaching more satisfactory levels of the 335 acres allocated to residential use 195 acres have been improved in the first unit and 175 acres were sold or under option at the year-end the rate of sales has not come up to our expectations and profits on this project have been disappointing south san francisco industrial park this project was originated in 1956 with the acquisition of 340 acres of property which although well located for industrial use consisted mainly of unusable hilly and marsh areas earth moving operations converted the entire area into prime industrial sites of which at the year-end only 120 acres remained unsold the volume of sales and profits earned have been very satisfactory estimated final windup of this project is ahead of original plans due in part to the sale of 77 acres to a single industrial customer in 1959 vandenberg village near lompoc california and adjacent to van denberg air force base the company has an option on up to approximately 3500 acres of property suitable for tract housing for which a substantial demand seems to exist in that area during 1960 grading operations and street and utility installation was performed on a portion of this property and sales were made to tract builders a school is under construction and present plans call for a shopping facility golf course and motel sites our ultimate success in terms of profits from this project is directly dependent on the continuation of activity at the missile base and the terms of availability of home mortgage financing for which an improved condition has recently been noted fauma valley in late 1959 the company acquired 1100 acres of land at the foot o mt palomar midway between san diego and los angeles for ultimate development into country estates of 1 to 60 acres this is to be a suburban resort-type development its central feature is an 8-hole golf course which together with the clubhouse is now under construction during 1960 work was confined to planning studies grading construc tion of the principal access road and development of water supply plans for 1961 call for installation of utilities completion of building sites and inauguration of the sales program this 400-acre residential and commercial area was created by utah on the south shore of alameda on san francisco bay from submerged tidelands in center is the company-owned 65-acre south shore shopping center