IRVINE — Standing on a grassy hilltop overlooking the former Marine Corps Air Station El Toro, filled with overgrown fields and abandoned runways, developers on Wednesday pointed to where the first of 5,000 new homes will open by early next year.

"If you use a little imagination, you can see what this area can become," said Emile Haddad, president and chief executive of FivePoint Communities, the Aliso Viejo-based developer of the Great Park Neighborhoods.

With the groundbreaking of the first 726 homes Tuesday, the project, which has been marked by challenges, is finally underway.

Among the financial and economic problems FivePoint faced was the 2008 bankruptcy of one of the project's original loan holders, Lehman Brothers.

"Having that shift meant that a lot of what was envisioned here — with the homes leading the construction of the park — that changed on us," Haddad said.

In 2010, Boston-based State Street Bank & Trust Co. infused the project with $400 million in cash and credit.

"Through a restructure of the capital, the partnership led by FivePoint was able to recapitalize and replace Lehman Brothers with State Street as the lender," Haddad explained.

However, with those changes, the project has taken on an additional financial scale that both benefits the community and speeds up the development of the adjacent Great Park, he said.

Instead of a guaranteed $40 million in shared neighborhood park infrastructure — a minimum that FivePoint agreed to as part of negotiations with the city before the developer had a clear picture of what the eventual plans would be — that figure is more likely $150 million for Phase One alone, Haddad said.

"That will accelerate the building of the park," he said. "So, this groundbreaking has much more meaning than just the project starting."

For county residents who watched the unsuccessful fight to turn the former base into an airport — and then watched the 2005 auction of the land to Miami-basedLennar Corp., a joint-owner of FivePoint — now it means that finally a metropolitan park is on its way, he said.

"I'm not aware of any project of this size and nature breaking ground in the state or county since 2006," Haddad said.

The first neighborhoods will be built in the north area of the project, between Portola Parkway and Irvine Boulevard, running along the Eastern Transportation Corridor, or Toll Road 133, by 2013.

The more than 720 single-family, detached homes, ranging from 1,700 to 3,800 square feet, will feature an "American Heritage" character.

The step away from the ubiquitous Mediterranean-style architecture will better position the homes in the Irvine market, which is going stronger than other areas across the state, Haddad said.

Homebuyers will pay anywhere from $400,000 to more than $1 million, plus a Mello-Roos property tax to pay for infrastructure, according to Carol Wold, spokeswoman for FivePoint.

Younger first-time homeowners, immigrants and baby boomers are expected to be the homes' target buyers.

For Bill Hammerle, 63, a former Marine commanding officer at the Marine air station in Tustin who helped lead a media preview day of the project Wednesday, the new homes present opportunities for his two sons, ages 16 and 22.

"It's exciting," Hammerle said as he drove along the decrepit roads lined on either side by acres of untamed grass and shrubs. "[We'd] put a deposit down right now, if we could."

Phase One of the project, which extends south from Portola Highway to just past Trabuco Road and east along Irvine Boulevard, will also include 1.2 million square feet of retail, recreational, office, medical and educational space.