10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

__________

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2017

OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-10153

HOMEFED CORPORATION

(Exact name of registrant as specified in its Charter)

Delaware  (State or other jurisdiction of incorporation or organization)	33-0304982 (I.R.S. Employer
1903 Wright Place, Suite 220, Carlsbad, California (Address of principal executive offices)	Identification Number) 92008 (Zip Code)

(760) 918-8200

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

______________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES X NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES X NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ☐	Accelerated filer  x	Non-accelerated filer    ☐
Smaller reporting company  ☐	Emerging growth company  ☐	(Do not check if a smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES NO X

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.  On October 24, 2017, there were 15,451,532 outstanding shares of the Registrant’s Common Stock, par value $.01 per share.

Part I -FINANCIAL INFORMATION

Item 1. Financial Statements.

HOMEFED CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

September 30, 2017 and December 31, 2016

(Dollars in thousands, except par value)

(Unaudited)

	September 30,			December 31,
	2017			2016
ASSETS
Real estate held for development	$	310,705		$	297,665
Real estate held for investment, net	38,315			42,536
Cash and cash equivalents	35,382			53,140
Restricted cash	2,642			2,672
Equity method investments	139,778			127,379
Accounts receivable, deposits and other assets	23,013			18,564
Intangible assets, net	3,660			5,634
Net deferred tax asset	40,944			34,742
TOTAL	$	594,439		$	582,332
LIABILITIES
Accounts payable and accrued liabilities	$	24,746		$	13,438
Below market lease contract intangibles, net	2,128			2,729
Non-refundable option payments	255			25
Liability for environmental remediation	1,452			1,455
Deferred revenue	1,441			4,311
Income taxes payable	—			1,338
Accrued interest payable	38			—
Other liabilities	2,389			5,778
Long-term debt, net	97,483			102,084
Total liabilities	129,932			131,158
COMMITMENTS AND CONTINGENCIES (Note 12)
EQUITY
Common stock, $.01 par value; 25,000,000 shares authorized; 15,451,532 and   15,448,500 shares outstanding after deducting 397,377 and 395,409 shares held in treasury	155			154
Additional paid-in capital	599,865			599,033
Accumulated deficit	(140,634		)	(155,011		)
Total HomeFed Corporation common shareholders' equity	459,386			444,176
Noncontrolling interest	5,121			6,998
Total equity	464,507			451,174
TOTAL	$	594,439		$	582,332

The accompanying notes are an integral part of these consolidated financial statements.

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HOMEFED CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

For the periods ended September 30, 2017 and 2016

(In thousands, except per share amounts)

(Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
REVENUES
Sales of real estate	$	7,980		$	2,757		$	43,108		$	37,805
Rental income	5,877			5,812			18,166			17,518
Farming revenues	3,411			4,427			3,411			4,427
Co-op Marketing and advertising fees	157			194			394			504
	17,425			13,190			65,079			60,254
EXPENSES
Cost of sales	7,609			1,442			38,359			26,236
Rental operating expenses	4,422			4,336			12,641			12,994
Farming expenses	1,179			1,165			3,104			3,105
General and administrative expenses	4,533			3,789			12,601			10,627
Depreciation and amortization	927			941			2,779			2,919
Administrative services fees to Leucadia National Corporation	45			45			135			135
	18,715			11,718			69,619			56,016
Income (loss) from operations before income (losses) from equity method investment	(1,290		)	1,472			(4,540		)	4,238
Income (losses) from equity method investments	2,278			(292		)	6,688			(1,629		)
Income from operations	988			1,180			2,148			2,609
Interest and other income	102			394			295			2,710
Income before income taxes and noncontrolling interest	1,090			1,574			2,443			5,319
Income tax (provision) benefit	(619		)	(364		)	12,007			30,174
Net income	471			1,210			14,450			35,493
Net (income) loss attributable to the noncontrolling interest	(1		)	30			(73		)	45
Net income attributable to HomeFed Corporation    common shareholders	$	470		$	1,240		$	14,377		$	35,538
Basic and diluted earnings per common share attributable to HomeFed Corporation common shareholders	$	0.03		$	0.08		$	0.93		$	2.30

The accompanying notes are an integral part of these consolidated financial statements.

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HOMEFED CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the periods ended September 30, 2017 and 2016

(In thousands, except par value)

(Unaudited)

	HomeFed Corporation Common Shareholders
	Common Stock $.01 Par Value		Additional Paid-In Capital		Accumulated Deficit			Subtotal		Noncontrolling Interest			Total
Balance, January 1, 2016	$	154	$	597,922	$	(191,695	)	$	406,381	$	10,019		$	416,400
Net income (loss)					35,538			35,538		(45		)	35,493
Distributions to noncontrolling interests										(3,300		)	(3,300		)
Exercise of options to purchase common shares, including excess tax benefit			1,036					1,036					1,036
Share-based compensation    expense			55					55					55
Balance, September 30, 2016	$	154	$	599,013	$	(156,157	)	$	443,010	$	6,674		$	449,684
Balance January 1, 2017	$	154	$	599,033	$	(155,011	)	$	444,176	$	6,998		$	451,174
Net income					$	14,377		14,377		73			14,450
Distributions to noncontrolling interests										(1,950		)	(1,950		)
Exercise of options to    purchase common shares, including excess tax benefit	1		22					23					23
Share-based compensation    expense			810					810					810
Balance, September 30, 2017	$	155	$	599,865	$	(140,634	)	$	459,386	$	5,121		$	464,507
The accompanying notes are an integral part of these consolidated financial statements.

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HOMEFED CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the periods ended September 30, 2017 and 2016

(In thousands)

(Unaudited)

	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	14,450			$	35,493
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
(Income) losses from equity method investments	(6,688		)	1,629
Benefit for deferred income taxes	(6,202		)	(31,937		)
Share-based compensation expense	1,218			55
Excess tax benefit from exercise of options	—			(25		)
Depreciation and amortization of property, equipment and leasehold improvements	384			383
Other amortization	3,380			3,536
Amortization related to issuance costs and debt discount of Senior Notes	—			886
Amortization related to investments	—			(821		)
Loss on extinguishment of debt	331			—
Changes in operating assets and liabilities:
Real estate, held for development	(5,210		)	(2,420		)
Real estate, held for investment	3,182			(323		)
Restricted cash related to development activities	30			3,758
Accounts receivable, deposits and other assets	(2,983		)	(4,864		)
Deferred revenue	(2,870		)	(1,266		)
Accounts payable and accrued liabilities	1,028			812
Accrued interest payable	38			1,893
Non-refundable option payments	230			—
Liability for environmental remediation	(3		)	(15		)
Income taxes payable	(4,646		)	(2,679		)
Other liabilities	(3,797		)	148
Net cash provided by (used for) operating activities	(8,128		)	4,243
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in equity method investments	(25,711		)	(10,270		)
Capital distributions from equity method investments	20,000			—
Net cash used for investing activities	(5,711		)	(10,270		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of long-term debt	100,000			—
Payment of debt issuance costs	(797		)	(586		)
Distributions to noncontrolling interests	—			(3,300		)
Reduction of debt	(103,145		)	(1,243		)
Exercise of options to purchase common shares	23			1,011
Excess tax benefit from exercise of stock options	—			25
Net cash used for financing activities	(3,919		)	(4,093		)
Net decrease in cash and cash equivalents	(17,758		)	(10,120		)
Cash and cash equivalents, beginning of period	53,140			66,676
Cash and cash equivalents, end of period	$	35,382		$	56,556
Supplemental disclosures of cash flow information:
Cash paid for income taxes, net of tax refunds	$	3,513		$	4,974
Cash paid for interest (net of amounts capitalized)	$	—		$	—
Non-cash operating activities:
Project development costs incurred that remain payable at end of period	$	15,398		$	8,448
Non-cash investing activities:
Land contributed as an investment in Village III Master	$	—		$	15,150
Non-cash financing activities:
Dividends declared but not paid yet	$	1,950		$	—
Debt issuance costs incurred but not paid yet	$	1,350		$	—

The accompanying notes are an integral part of these consolidated financial statements.

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HOMEFED CORPORATION AND SUBSIDIARIES

Notes to Interim Consolidated Financial Statements

1.   Accounting Developments

The unaudited interim consolidated financial statements, which reflect all adjustments (consisting of normal recurring items or items discussed herein) that management believes necessary to fairly state results of interim operations, should be read in conjunction with the Notes to Consolidated Financial Statements (including the Summary of Significant Accounting Policies) included in our audited consolidated financial statements for the year ended December 31, 2016, which are included in our Annual Report filed on Form 10-K for such year (the “2016 10-K”).  Results of operations for interim periods are not necessarily indicative of annual results of operations.  The consolidated balance sheet at December 31, 2016 was extracted from the audited annual consolidated financial statements and does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for annual financial statements.

There is no other comprehensive income for the three and nine months ended September 30, 2017 and 2016.

Accounting Developments- Accounting Standards to be Adopted in Future Periods

In May 2014, the Financial Accounting Standards Board (“FASB”) issued new guidance that defines how companies report revenues from contracts with customers, and also requires enhanced disclosures.  The core principle of this new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.  This guidance is effective for interim and annual periods beginning after December 15, 2017. We intend to adopt the new guidance with a cumulative-effect adjustment to opening retained earnings. Our impact of the evaluation of the new guidance is ongoing. We are currently evaluating our revenue streams and contracts with customers within each revenue stream. We have evaluated our contracts with our customers related to our farm revenues and do not expect this guidance will have a material impact on our grape revenues and may have a timing impact on when we recognize almond revenues but is not anticipated to be material. We expect that this guidance may impact the timing of revenue recognition related to certain of our land sales, home sales, profit participation agreements, and co-op marketing fees.

In January 2016, the FASB issued new guidance that affects the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. The guidance is effective for annual and interim periods beginning after December 15, 2017. We are currently evaluating the impact of the new guidance related to equity investments and the presentation and disclosure requirements of financial instruments on our consolidated financial statements.

In February 2016, the FASB issued new guidance that affects the accounting and disclosure requirements for leases.  The new guidance requires a lessee to recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term, along with additional qualitative and quantitative disclosures. Lessor accounting will remain substantially similar to current accounting guidance for leases.  However, leasing costs that are currently eligible to be capitalized as initial direct costs will be immediately expensed under the new guidance.  The guidance is effective for annual and interim periods beginning after December 15, 2018. We are currently evaluating the impact this new guidance will have on our consolidated financial statements.

In August 2016, the FASB issued new guidance to reduce the diversity in practice in how certain transactions are classified in the statement of cash flows. The guidance adds or clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows. The guidance is effective for annual and interim periods beginning after December 15, 2017. In November 2016, the FASB issued new guidance on restricted cash. The guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. The guidance is

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effective for annual and interim periods beginning after December 15, 2017. We have evaluated the new guidance and believe it will not have a material effect on our consolidated financial statements.

In May 2017, the FASB issued new guidance providing clarity and reducing diversity in practice and cost and complexity when accounting for a change to the terms or conditions of a share-based payment award. The guidance is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted. We have evaluated the new guidance and believe it will not have a material effect on our consolidated financial statements.

Accounting Developments- Adopted Accounting Standards

Beginning January 1, 2017, we adopted the FASB's new guidance that simplifies and improves accounting for share-based payments. The amendments include the recognition of all excess tax benefits and tax deficiencies as income tax expense or benefit in the statement of operations and changes to the timing of recognition of excess tax benefits, the accounting for forfeitures and classification of awards as either equity or liabilities and classification on the statement of cash flows. The adoption of this guidance did not have a significant impact on our consolidated financial statements. We elected to account for forfeitures as they occur.

2.   Intangibles, Net

As more fully discussed in the Annual Report on Form 10-K for the year ended December 31, 2014, intangible assets include above market leases and leases in place and intangible liabilities include below market leases which were recorded at fair value when we acquired substantially all of the real estate properties and operations of Leucadia National Corporation ("Leucadia"), the membership interests in Brooklyn Renaissance Plaza ("BRP Holding") and Brooklyn Renaissance Hotel LLC ("BRP Hotel") and cash in exchange for 7.5 million of our common shares (the "Acquisition") during 2014.

A summary of intangible assets is as follows (in thousands):

	September 30, 2017		December 31, 2016		Amortization (in years)
Above market lease contracts, net of accumulated amortization of $8,305 and $6,719	$	2,569	$	4,155	1 to 24
Lease in place value, net of accumulated amortization of $2,994 and $2,606	1,091		1,479		1 to 24
Intangible assets, net	$	3,660	$	5,634
Below market lease contracts, net of accumulated amortization of $3,460 and $2,859	$	2,128	$	2,729	1 to 24

The amortization of above and below market lease contracts is recognized in Rental income.  Above market lease values are amortized over the remaining terms of the underlying leases, and below market lease values are amortized over the initial terms plus the terms of any below market renewal options of the underlying leases.  The estimated future amortization expense recognized in Rental income for the above market lease intangible assets is as follows: remainder of 2017 - $550,000; 2018 - $1,700,000; 2019 - $50,000; 2020 - $50,000; 2021 - $50,000 and thereafter - $200,000. The estimated future negative amortization expense recognized in Rental income for the below market lease intangible assets is as follows: remainder of 2017 - $(200,000); 2018 - $(550,000); 2019 - $(200,000); 2020 - $(200,000); 2021 - $(200,000) and thereafter - $(750,000).

The lease in place intangible is reflected in Depreciation and amortization expenses and amortized over the life of the related lease.  The estimated future amortization expense for the lease in place intangible asset for each of the next five years is as follows: remainder of 2017 - $100,000; 2018 - $300,000; 2019 - $100,000; 2020 - $100,000; 2021 - $100,000 and thereafter - $400,000. Amortization expense on lease in place intangible assets was $100,000 and $150,000 for the three months ended September 30, 2017 and 2016, respectively, and was $400,000 and $450,000 for the nine months ended September 30, 2017 and 2016, respectively. 

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3.   Equity Method Investments

Otay project:

In April 2016, through a HomeFed subsidiary, we formed a limited liability company, HomeFed Village III Master, LLC (“Village III Master”), to own and develop an approximate 450 acre community planned for 992 homes in the Otay Ranch General Plan Area of Chula Vista, California. We entered into an operating agreement with three builders as members of Village III Master to build and sell 948 homes within the community.  We made an initial non-cash capital contribution of $20,000,000 which represents the fair market value of the land we contributed to Village III Master after considering proceeds of $30,000,000 we received from the builders at closing, which represents the value of their capital contributions. The historical book value of the land we contributed to Village III Master is $15,150,000, which represents a basis difference of $4,850,000. The basis difference will be amortized as additional income for us as future real estate sales occur.

In January 2017, we recorded the final map that subdivided the approximately 450 acre parcel of land in the Otay Ranch General Plan Area of Chula Vista, California, which is now known as the community of Village of Escaya. We formed three limited liability companies (each, a "Builder LLC") to own and develop 948 homes within Village of Escaya and entered into individual operating agreements with each of the three builders as members of each Builder LLC. Upon admittance of the three builders into their respective Builder LLC, each of the three builders withdrew as members of Village III Master, which is now a wholly owned subsidiary of HomeFed Corporation. On January 5, 2017, we made an aggregate capital contribution valued at $33,200,000 to the three Builder LLCs, representing land and completed improvement value. In addition to the $30,000,000 contribution made by the builders, as mentioned above, and $2,250,000 of capitalizable land improvements made by the builders, the builders then made an additional cash contribution of $20,000,000 in January 2017 upon final map subdivision and entry into their respective Builder LLCs, which was used to fund infrastructure costs completed by us.

Although each of the three Builder LLCs is considered a variable interest entity, we do not consolidate any of them since we are not deemed to be the primary beneficiary as we share joint control with each Builder LLC through a management committee and we lack authority over establishing home sales prices and accepting offers. However, since two of our executive officers are members of the four-member management committee at each Builder LLC, designated to consider major decisions for that Builder LLC, we account for each Builder LLC under the equity method of accounting. Our share of the income earned from the sales of built homes in any of the three Builder LLCs will be recorded as income from equity method investments.

Our maximum exposure to loss is limited to our equity commitment in each Builder LLC and any cost overruns as described below. We are responsible for the remaining cost of developing the community infrastructure, for which we have received credit to date as a capital contribution, with funding guaranteed by us under the respective operating agreements and for the marketing costs of the Village of Escaya. Credit for capital contributions related to our infrastructure improvements is limited to $78,600,000, and we are responsible for any costs in excess of this limit to complete the community infrastructure. The builders are responsible for the remaining construction and the selling of the 948 homes with funding guaranteed by their respective parent entities.

We are contractually obligated to obtain infrastructure improvement bonds on behalf of each Builder LLC. See Note 12 for more information.

Summarized financial information for our interest in the three Builder LLCs (in thousands):

	Financial Statement Carrying Amounts
					VIE
September 30, 2017	Assets		Liabilities		Assets
Builder LLCs	$	33,724	$	—	$	125,143

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Brooklyn Renaissance Plaza and Hotel:

We own a 61.25% membership interest in BRP Holding. Although we have a majority interest, we concluded that we do not have control but only have the ability to exercise significant influence on this investment.  As such, we account for BRP Holding under the equity method of accounting.  We also own a 25.8% membership interest in BRP Hotel, which we account for under the equity method of accounting.

Under the equity method of accounting, our share of the investee’s underlying net income or loss is recorded as income (loss) from equity method investments.  The recognition of our share of the investees’ results takes into account any special rights or priorities of investors; accordingly, we employ the hypothetical liquidation at book value model to calculate our share of the investees’ profits or losses.

Summarized financial information:

At September 30, 2017 and December 31, 2016, our equity method investments are comprised of the following (in thousands):

	September 30,		December 31,
	2017		2016
BRP Holding	$	83,358	$	74,972
BRP Hotel	22,696		24,020
Village III Master	—		28,387
Builder LLCs	33,724		—
Total	$	139,778	$	127,379

Income (losses) from equity method investments includes the following for the three and nine months ended September 30, 2017 and 2016 (in thousands):

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
BRP Holding	$	2,921		$	(186	)	$	8,386		$	(591	)
BRP Hotel	(343		)	(106		)	(1,324		)	(1,038		)
Builder LLCs	(300		)	—			(374		)	—
Total	$	2,278		$	(292	)	$	6,688		$	(1,629	)

The following table provides summarized data with respect to our significant equity method investments in BRP Holding and BRP Hotel for the nine months ended September 30, 2017 and 2016 (in thousands):

	For the Nine Months Ended September 30,
	2017		2016
Total revenues	$	90,267	$	70,718
Income from continuing operations before extraordinary items	16,160		1,228
Net income	16,160		1,228
Equity earnings (losses) of equity method investments	7,062		(1,629		)

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4.   Debt

Lines of Credit:

In April 2015, we entered into a $15,000,000 revolving line of credit agreement.  Loans outstanding under this line of credit bear interest at monthly LIBOR plus 2.6% and are secured by the Rampage property. The draw period expires on January 1, 2021, and the loan matures on January 1, 2035.  There is also a $3,000,000 operational line of credit available which is secured by the Rampage property’s crops and matures on January 1, 2018.  As of October 24, 2017, no amounts have been drawn under either line of credit.

Senior Notes:

On June 30, 2015, we issued $125,000,000 principal amount of 6.5% Senior Notes due 2018 (the “Old Notes”) in a private placement. The Old Notes were fully and unconditionally guaranteed by our wholly-owned domestic subsidiaries and any of our future domestic wholly-owned subsidiaries, and matured on June 30, 2018. The Old Notes were senior unsecured obligations and the guarantees are the senior unsecured obligations of the Guarantors.

In addition, we were required to use the net proceeds of certain asset sales to offer to purchase the Old Notes at a price equal to 100% of the aggregate principal amount outstanding plus accrued and unpaid interest as of the date fixed for the closing of such asset sale offer. Accordingly, we made the following repurchases:

Date of Repurchase	Principal Repurchased	Approximate Interest Payment Associated with Repurchase
December 15, 2016	$4,162,000	$120,000
November 15, 2016	$9,176,000	$220,000
September 27, 2016	$625,000	$10,000
January 28, 2016	$618,000	$3,000
October 20, 2015	$7,274,000	$146,000

On September 27, 2017, we and certain of our domestic wholly-owned subsidiaries as guarantors (the “Guarantors”) entered into purchase agreements (collectively, the “Purchase Agreements”) with certain investors named therein (the “Purchasers”) pursuant to which we agreed to issue to the Purchasers an aggregate of $75,000,000 of 6.5% Senior Notes due 2019 (the “New Notes”) in a private placement. Pursuant to the terms of the Purchase Agreements, the purchase price for the New Notes was 100% of the principal amount. Pursuant to the Placement Agency Agreement, Jefferies LLC (“Jefferies”), a wholly-owned subsidiary of Leucadia, received a fee of $100,000 for acting as the placement agent and the closing agent.

On September 28, 2017, we used proceeds of the New Notes, as described below, together with cash on hand, to redeem all of the outstanding Old Notes. After considering the repurchases and redemption, there is no remaining principal due under the Notes as of September 30, 2017. In connection with the extinguishment of the Notes, issuance costs of approximately $350,000 were recorded as an expense.

The New Notes were issued on September 28, 2017 (“Issue Date”), pursuant to an indenture among us, the Guarantors and Wilmington Trust, N.A., as trustee (“Indenture”), containing such terms as set forth below. The New Notes mature on October 1, 2019 and are fully and unconditionally guaranteed by the Guarantors on the terms provided in the Indenture. Interest on the New Notes accrues at a rate of 6.50% per annum and is payable semi-annually in arrears on April 1 and October 1, commencing April 1, 2018. The New Notes are senior unsecured obligations of the Company and the guarantees are the senior unsecured obligations of the Guarantors.

At September 30, 2017, the New Notes had a $75,000,000 principal amount outstanding, and there was no principal amount outstanding on the Old Notes.

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We may not redeem or repurchase the New Notes prior to April 1, 2018 after which time, we may redeem the New Notes, in whole or in part, at any time or in part from time to time at a redemption price equal to 100% of the principal amount of the New Notes plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

Upon the occurrence of a Change of Control (as defined in the Indenture) after the Issue Date, to the extent the New Notes were not otherwise redeemed, we must make an offer to purchase all of the outstanding New Notes at a price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase, in each case, as provided in, and subject to the terms of, the Indenture. Pursuant to the Indenture, we will use the net proceeds of certain asset sales to offer to purchase the New Notes at a price equal to 100% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase.

The Indenture contains covenants that, among other things, limit our and certain of our subsidiaries’ ability to incur, issue, assume or guarantee certain indebtedness subject to exceptions (including allowing us to borrow up to $15,000,000 under our Rampage Vineyard revolving facility, another $70,000,000 of indebtedness collateralized by our other assets, and up to $65,000,000 under a construction loan secured by our Village of Escaya mixed use apartment project), issue shares of disqualified or preferred stock, pay dividends on equity, buy back our common shares outside of existing stock compensation plan arrangements, or consummate certain asset sales or affiliate transactions. The Indenture also permits certain financing transactions in connection with the EB-5 Program, as defined below, for the project involving infrastructure improvements at the Village of Escaya subject to certain restrictions and limitation as set forth in the Indenture. Additionally, certain customary events of default may result in an acceleration of the maturity of the New Notes.

EB-5 Program:

We intend to fund our Village of Escaya project (“Village 3”or the “Project”) in part by raising funds under the Immigrant Investor Program administered by the U.S. Citizenship and Immigration Services ("USCIS") pursuant to the Immigration and Nationality Act ("EB-5 Program"). This program was created to stimulate the U.S. economy through the creation of jobs and capital investments in U.S. companies by foreign investors. The program allocates a limited number of immigrant visas per year to qualified individuals seeking lawful permanent resident status on the basis of their investment in a U.S. commercial enterprise. Regional centers are organizations, either publicly owned by cities, states or regional development agencies or privately owned, which facilitate investment in job-creating economic development projects by pooling capital raised under the EB-5 Program. Geographic areas within regional centers that are rural areas or areas experiencing unemployment numbers higher than the national unemployment average rates are designated as Targeted Employment Areas (“TEA”). The EB-5 program is set to expire on December 8, 2017 but is expected to be extended. Various reforms and bills have been proposed and will be considered by Congress in the coming months.

In February 2017, we formed Otay Village III Lender, LLC, which is intended to serve as a new commercial enterprise (“NCE”) under the EB-5 Program. The NCE is managed by Otay Village III Manager, LLC, a wholly owned subsidiary of HomeFed. The NCE is seeking to raise up to $125,000,000 by offering up to 250 units in the NCE to qualified accredited EB-5 investors for a subscription price of $500,000 per unit, which is the minimum investment that an investor in a TEA project is required to make pursuant to EB-5 Program rules. The proceeds of the offering will be used to repay any outstanding bridge loan provided by HomeFed to its wholly owned subsidiary HomeFed Village III LLC, a job creating entity under the EB-5 Program, and to fund infrastructure costs related to the development of Village 3.

The NCE has offered the units to investors primarily located in China, Vietnam, and South Korea either directly or through relationships with agents qualified in their respective countries, in which case the NCE will pay an agent fee. Once an investor’s subscription and funds are accepted by the NCE, the investor must file an I-526 petition with the USCIS seeking approval of the investment’s suitability under the EB-5 Program requirements and the investor’s suitability and source of funds. All investments are held in an escrow account and will not be released until the investor files their I-526 petition with the USCIS and we have identified and provided collateral

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to secure the amount of the funds drawn from escrow. The Village 3 project must be approved by the USCIS under the EB-5 Program rules. Prior to approval by the USCIS, funds may be drawn from the escrow account with a HomeFed guarantee that funds will be returned in the event the Village 3 project is not approved. On September 18, 2017, $25,000,000 was drawn from escrow related to EB-5 financing to fund infrastructure costs related to the development of the Project. The drawn funds are guaranteed by us until the project is approved by the USCIS and are collateralized by certain Otay Village property. The loan term is five years with twoone-year options to extend by us with principal due in full at maturity. The effective interest rate is approximately 3.5%, payable as certain milestones are achieved according to various agreements with agents and investors.

As of October 24, 2017, we have $24,900,000 in escrow which is subject to approval by the USCIS and cannot be drawn until certain provisions (such as filing of Investor I-526, investor suitability and source of funds) are satisfied.

At September 30, 2017, we are in compliance with all debt covenants.

Real estate held for development includes capitalized interest, including amortization of issuance costs and debt discount, of $5,900,000 and $6,600,000 for the nine months ended September 30, 2017 and 2016, respectively.

The New Notes and EB-5 Program financing are presented on the Balance Sheet net of aggregate issuance costs of $2,350,000 and $550,000 and debt discount of $150,000 and $500,000 at September 30, 2017 and December 31, 2016, respectively.

5.   Income Taxes

During the nine months ended September 30, 2017, we effectively settled our 2014 federal tax examination with the IRS and, as a result, recorded an $8,600,000 reduction to deferred tax liabilities and a $4,600,000 reduction to unrecognized tax benefits.  The statute of limitations with respect to the Company’s federal income tax returns has expired for all years through 2013, and with respect to California state income tax returns through 2011.  We are currently under examination by the City of New York for the year ended 2014.  We do not expect that resolution of this examination will have a significant effect on our consolidated financial position, but it could have a significant impact on the consolidated results of operations for the period in which resolution occurs.

6.   Earnings Per Common Share

Basic and diluted earnings per share amounts were calculated by dividing net income by the weighted average number of common shares outstanding. The numerators and denominators used to calculate basic and diluted earnings per share for the three and nine months ended September 30, 2017 and 2016 are as follows (in thousands):

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2017		2016		2017		2016
Numerator – net income attributable to HomeFed Corporation common shareholders	$	470	$	1,240	$	14,377	$	35,538
Denominator for basic earnings per share– weighted average shares	15,451		15,448		15,449		15,431
Restricted stock units	45		—		32		—
Stock options	3		4		4		12
Denominator for diluted earnings per share– weighted average shares	15,499		15,452		15,485		15,443

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7.   Fair Value Information

The carrying amounts and estimated fair values of our principal financial instruments that are not recognized on a recurring basis are as follows (in thousands):

	September 30, 2017				December 31, 2016
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial Liabilities:
Long-term debt (a)	$	74,386	$	74,944	$	102,084	$	103,274
Long-term debt: EB-5	23,097		25,000		—		—

(a) The fair value of the New Notes was determined by utilizing available market data inputs that are considered level 2 inputs.  Quoted prices are available but trading is infrequent.  We utilized the available market data based on the quoted market prices to determine an average fair market value over the last 10 business days of the reporting period.

For cash and cash equivalents, the carrying amounts of such financial instruments approximate their fair values.  We did not invest in any derivatives or engage in any hedging activities.

8.   Related Party Transactions

On March 23, 2017, Ian M. Cumming resigned from the Board of Directors. To fill the vacancy, on March 28, 2017, the Board of Directors elected Jimmy Hallac, who is a Managing Director for Leucadia. Leucadia executives now hold three of the seven board of director positions. Our Chairman, Joseph S. Steinberg, is a significant stockholder of Leucadia and Chairman of Leucadia’s board, and one of our Directors, Brian P. Friedman, is the President and a director of Leucadia.

Prior to Mr. Cumming's resignation, he sold 783,889 of our shares for $31,300,000 to Leucadia in a privately negotiated transaction during March 2017. Mr. Cumming was considered to be a “Related Person” under our related person transactions policy (the “Policy”) at the time of the sale.  Accordingly, the independent Audit Committee of the Board (the “Audit Committee”) considered the transaction and recommended to the Board the approval of the sales transaction, which was unanimously approved by the Board (with Mr. Cumming abstaining from the vote).

In 2015, Mr. Steinberg, the chairman of our Board of Directors, entered into a Purchase Agreement with us and our wholly-owned subsidiaries, as guarantors, pursuant to which he purchased Notes with a value of $5 million, or 4%, of the principal amount of the Notes issued, which were fully redeemed on September 28, 2017 on the same terms as other redemptions.

On September 27, 2017, Mr. Steinberg entered into a Purchase Agreement with us and our wholly-owned subsidiaries, as guarantors, pursuant to which he purchased New Notes with a value of $7 million, or 9.3%, of the principal amount of the New Notes issued (such purchases and redemptioms, the “Affiliate Note Transactions”). Mr. Steinberg is considered to be a Related Person under our Policy. Accordingly, the Audit Committee considered the Affiliate Note Transactions and approved, and recommended to the Board the approval of, the Affiliate Note Purchases, which were unanimously approved by the Board (with Mr. Steinberg abstaining from the vote).

Pursuant to Placement Agency Agreements, Jefferies acted as Placement Agent for the Notes and for the New Notes. Jefferies is a wholly-owned subsidiary of Jefferies Group LLC, a wholly owned subsidiary of Leucadia. Leucadia is our affiliate and a Related Person under the Policy. Accordingly, pursuant to and in accordance with the Policy, the Audit Committee considered the Placement Agency Agreements and approved, and recommended

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to the Board the approval of, the Placement Agency Agreements, which were unanimously approved by the Board (with Mr. Friedman, Chairman of the Executive Committee of Jefferies Group LLC, Mr. Steinberg and Mr. Hallac abstaining from the vote). Pursuant to the Placement Agency Agreements for the Notes, Jefferies received a fee equal to 50 basis points from the gross proceeds of the offering, received a fee equal to 50 basis points of the outstanding balance of the Notes on the first anniversary of the issue date and received a fee equal to 50 basis points of the outstanding balance on the second anniversary of the issue date. Pursuant to the Placement Agency Agreements for the New Notes, Jefferies received a fee of $100,000. Additionally, we and each of the guarantors has agreed to indemnify Jefferies against certain liabilities, including liabilities under the Securities Act, and to reimburse Jefferies all reasonable out-of-pocket expenses incurred in connection with any action or claim for which indemnification has or is reasonably likely to be sought by Jefferies.

Builder LLCs:

Two of our executive officers are members of the four-member management committee at each Builder LLC and are designated to consider major decisions for each of the three Builder LLCs. Each Builder LLC appointed two members to the management committee, which is controlled jointly by us and the respective builder. HomeFed is contractually obligated to obtain infrastructure improvement bonds on behalf of the Builder LLCs. See Note 12 for more information. HomeFed may also be responsible for the funding of the real estate improvement costs for the infrastructure of the development if our subsidiary that invested in each Builder LLC fails to do so.

Brooklyn Renaissance Plaza:

As more fully discussed in the 2016 10-K, BRP Leasing holds a master lease at BRP Holding and subleases the office space to multiple tenants.  Future minimum annual rental expense (exclusive of real estate taxes, maintenance and certain other charges) that BRP Leasing is obligated to pay to BRP Holding for office space is as follows at September 30, 2017 (in thousands):

Remainder of 2017	$	1,890
2018	6,301
	$	8,191

In the aggregate, substantially all of the office space has been sublet for amounts in excess of BRP Leasing’s contractual commitment in the underlying lease.

Leucadia:

During the third quarter of 2017, certain of our executive officers and a director sold an aggregate 14,008 shares of our stock from their personal holdings to Leucadia in private transactions at an agreed upon price of $43.00 per share. The transaction was approved by our Audit Committee in accordance with our Related Party Transaction Policy taking into consideration that Leucadia is our majority shareholder, among other factors.

Pursuant to an administrative services agreement, Leucadia provides us certain administrative and accounting services, including providing the services of our Secretary.  Administrative services fee expenses were $45,000 and $135,000 for each of the three and nine months ended September 30, 2017 and 2016, respectively.  The administrative services agreement automatically renews for successive annual periods unless terminated in accordance with its terms.  We sublease office space to Leucadia under a sublease agreement until October 2018.  Amounts reflected in other income pursuant to this agreement were $3,000 for each of the three months ended September 30, 2017 and 2016 and $9,000 for each of the nine months ended September 30, 2017 and 2016.

Leucadia is contractually obligated to obtain infrastructure improvement bonds on behalf of the San Elijo Hills project. See Note 12 for more information. 

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9.  Interest and Other Income

Interest income was not significant for the three months ended September 30, 2017 and was $300,000 for the three months ended September 30,2016 and was $25,000 and $850,000 for the nine months ended September 30, 2017 and 2016, respectively.

During the nine months ended September 30, 2016, our subsidiary at the SweetBay project received $550,000 related to the settlement of a claim against British Petroleum ("BP") arising from the damages caused by the Deepwater Horizon incident in April 2010 and the resulting BP oil spill in the Gulf of Mexico and recognized this amount as other income. For the nine months ended September 30, 2016, interest and other income includes a $1,000,000 recovery in January 2016 from the judgment against certain defendants in the Flat Rock litigation. See Note 12 for more information on this legal matter.

Other income also includes service income related to a utility bundling service agreement with the homeowners at the Ashville Park project.  Income of $90,000 and $75,000 was recognized during the three months ended September 30, 2017 and 2016, respectively, and $260,000 and $225,000 was recognized during the nine months ended September 30, 2017 and 2016, respectively.

10.  Real Estate Sales Activity

Otay Land project:

In April 2016, through a HomeFed subsidiary as the managing member, we formed a limited liability company (the “LLC”) to own and develop an approximate 450 acre community in the Otay Ranch General Plan Area of Chula Vista, California and entered into an operating agreement with three builders as members of the LLC.  As a result of contributing land to the LLC, we received $30,000,000 from the builders at closing which was recognized as revenue from sales of real estate for the three and nine months ended September 30, 2016. Our share of the income earned from the sales of built homes by the LLC will be recorded as income from equity method investments. For more details on this transaction, please refer to Note 3.

There were no sales at the Otay Land project during the three and nine month periods ended September 30,2017. 

San Elijo Hills project:

The 48,800 square feet of commercial space in phase one and two of the Towncenter and the 12 multi-family units in phase two were sold during the first quarter of 2017 to a local developer for a cash payment of $5,800,000.

The third phase of the Towncenter is a 2.5 acre parcel of land, formerly designated as a church site. The third phase of the Towncenter is under contract with a local developer for a cash payment of $600,000 plus $100,000 per multi-family unit that the buyer is able to entitle, currently anticipated to be 12 multi-family units. We received a $230,000 non-refundable deposit during the third quarter of 2017 which will be applied to the sales price at time of closing. Closing of the third phase of the Towncenter is subject to entitlement approvals by the City of San Marcos and is expected to occur in the fourth quarter of 2017.

During June 2015, we entered into an agreement with a local San Diego based luxury homebuilder to construct and sell on our behalf, for a fee, up to 58 homes at the San Elijo Hills project.  We received a $500,000 deposit during the third quarter of 2015 which is reflected in Other liabilities.  This deposit is a builder performance deposit that will be fully refundable to the builder after the builder performs all of its requirements under the agreement. For the nine months ended September 30, 2017, we sold nine of these homes for $13,100,000. At time of closing, we recognized real estate revenues of $13,000,000 and cost of sales of $12,200,000 for the nine months ended September 30, 2017.

As of October 24, 2017, we have entered into agreements to sell 15 single family homes at the San Elijo Hills project under these agreements for aggregate cash proceeds of $21,500,000, which we expect to close during the fourth quarter of 2017 and first half of 2018.

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There were no sales at the San Elijo Hills project during the three and nine month periods ended September 30,2016. 

Ashville Park project:

There were no sales at the Ashville Park project during the three and nine months ended September 30, 2017 and during the three months ended September 30, 2016. During the nine months ended September 30, 2016, we sold the former visitor center for net cash proceeds of $550,000 which generated a gross profit of $250,000. The entitlement effort to re-plan Villages C, D and E is currently impacted by a delay within the City of Virginia Beach (the "City"). In 2014 and 2016, severe storm events caused regional flooding and large portions of the City’s storm water management system did not perform as expected. In 2016, the City hired outside civil engineers to study the system and provide possible solutions. The study is now complete and reveals that significant improvements to the storm water management system within the City are needed. The impact of the study and related City storm water management system issues on the timing of our future development is uncertain.

The Market Common:

For the three and nine months ended September 30, 2017 and 2016, we closed on sales of real estate at The Market Common as follows:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
	Number of units sold	Cash Proceeds		Number of units sold	Cash Proceeds		Number of units sold	Cash Proceeds		Number of units sold	Cash Proceeds
Single family lots	8	$	400,000	10	$	450,000	30	$	1,380,000	32	$	1,500,000
Multi-family lots	7	180,000		—	—		15	380,000		10	250,000
Profit sharing agreements	N/A	200,000		N/A	500,000		N/A	950,000		N/A	1,150,000

As of October 24, 2017, we have entered into an agreement to sell 34 single family lots for $1,700,000 and 63 multi-family lots for $850,000 at The Market Common to a homebuilder.  A non-refundable option deposit of $25,000 was transferred from Leucadia to us as part of the Acquisition.

SweetBay project:

During May 2015, we signed an agreement with a local builder to construct and sell on our behalf, for a fee, up to 127 homes at the SweetBay project. We sold 21 and 53 single family homes for $6,900,000 and $18,550,000 during the three and nine months ended September 30, 2017, respectively. Cost of sales of real estate was $7,100,000 and $18,400,000 during the three and nine months ended September 30, 2017, respectively. The pre-tax loss for the three months ended September 30, 2017 is due to an increase in home building costs of approximately $100,000 on homes closed and includes a reserve for a potential loss of $100,000 that was recorded related to home sales under contract which are expected to close during the fourth quarter of 2017 and 2018. During the nine months ended September 30, 2016, we received $1,300,000 from the Florida Department of Transportation for the purchase of approximately seven acres of land at the SweetBay project to be used for the expansion of State Road 390.

As of October 24, 2017, we have entered into agreements to sell 26 single family homes at the SweetBay project under the local builder agreement for aggregate cash proceeds of $8,500,000 which are expected to close in the fourth quarter of 2017 and the first half of 2018.

11. Real Estate Acquisitions

During August 2015, we agreed to purchase 67 acres of land for $5,000,000 located adjacent to our Ashville Park project with the intention to entitle an additional 67 single family lots into the project.  We placed a $200,000 refundable deposit and submitted the plans to the City of Virginia Beach.  The purchase was contingent upon approval of the 67 lot entitlement by the City of Virginia Beach. We have terminated the transaction, and the refundable deposit was returned to us in August 2017.

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In 2016, Pacific Gas & Electric ("PG&E"), an affiliate of the lessor of the Pacho Property in which we have a leasehold interest, began the process of decommissioning its Diablo Canyon Power Plant, which could take an undetermined period of time. The lessor has stated that it will not make any commitments on the disposition of certain lands, including the Pacho Property, until PG&E’s recommendations for decommissioning the Diablo Canyon Power Plant have been considered by the California Public Utility Commission as part of PG&E’s decommissioning plan. The time frame for completion of the review and approval of the decommissioning plan is uncertain. We are cooperating with PG&E during their public review process regarding disposition of the lands and are continuing to pursue fee title to the Pacho Property, which we acquired in the Acquisition and which is currently held for development as a leasehold interest with a book value of $17,750,000 as of September 30, 2017. If we are unable to obtain fee title to the property in a reasonable period of time, we may not develop the property and an impairment of the asset may be taken.

12.  Commitments and Contingencies

In April 2016, the school at the SweetBay project refinanced its $5,500,000 loan for which we had pledged 42 acres of land as collateral.  The school increased the total loan to $8,100,000.  Additionally, we dedicated the school site land and building to the school and terminated their below market lease.  We were also released from our pledge of 42 acres of land as collateral.  We retained a repurchase right in the event the school defaults on their loan.  The loan is now only collateralized by the school cash flow and the real estate now owned by the school.

For real estate development projects, we are generally required to obtain infrastructure improvement bonds at the beginning of construction work and warranty bonds upon completion of such improvements.  These bonds are issued by surety companies to guarantee satisfactory completion of a project and provide funds primarily to a municipality in the event we are unable or unwilling to complete certain infrastructure improvements.  As we develop the planned area and the municipality accepts the improvements, the bonds are released.  Should the respective municipality or others draw on the bonds for any reason, certain of our subsidiaries would be obligated to pay. 

Specifically for the San Elijo Hills project, Leucadia is contractually obligated to obtain these bonds on behalf of the project pursuant to the terms of agreements entered into when the project was acquired by us.  We are responsible for paying all third party fees related to obtaining the bonds.

As of September 30, 2017, the amount of outstanding bonds for each project is as follows:

	Amount of outstanding bonds
Otay Land project		$49,500,000
San Elijo Hills project	1,550,000
Ashville Park project	800,000

The Market Common is required to provide a letter of credit for the benefit of the City of Myrtle Beach to secure the completion of certain infrastructure improvements in the amount of $1,250,000.  We placed $1,250,000 on deposit with a qualified financial institution to obtain the replacement letter of credit; such amount is reflected as restricted cash.

BRP Leasing holds a master lease at BRP Holding and subleases the office space to multiple tenants.  See Note 8 for information concerning BRP Leasing’s minimum annual rental expense. 

BRP Leasing is required to keep a minimum of $500,000 on deposit in an escrow account to secure its lease obligations.  At September 30, 2017, $1,400,000 was in the escrow account and is classified as restricted cash. 

A former subsidiary of Leucadia was the primary obligor under certain lease obligations to BRP Holding. In connection with Leucadia's earlier sale of that subsidiary to a third party, Leucadia assumed its lease obligations

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through another of its subsidiaries at that time, BRP Leasing. When HomeFed purchased BRP Leasing, we agreed to indemnify Leucadia for these obligations. The primary lease expires in 2018 and the aggregate amount of rental obligations was approximately $8,200,000 as of September 30, 2017, plus approximately $4,500,000 of projected operating expenses and taxes related to the real estate.  Substantially all of the space under the primary lease has been sublet to various third-party tenants for the full length of the lease term in amounts in excess of the obligations under the primary lease.

As more fully discussed in the Annual Report on Form 10-K for the year ended December 31, 2013, we completed environmental remediation activities on approximately 30 acres of undeveloped land owned by Flat Rock Land Company, LLC (“Flat Rock”), a subsidiary of Otay in February 2013, and received final approval of the remediation from the County of San Diego Department of Environmental Health in June 2013.

In 2014, Otay and Flat Rock commenced a lawsuit in California Superior Court seeking compensation from the parties who they believed were responsible for the contamination of the property. In February 2015, the trial court denied us any recovery and entered judgment in favor of the defendants as to all causes of action. In post-trial proceedings, the defendants sought, and the trial court allowed, reimbursement for court costs, of $350,000. Although our appeal of the judgment stayed the defendants’ right to collect court costs pending resolution of the appeal, we accrued $350,000 during the first quarter of 2016 as we believed at the time that such loss was probable and reasonably estimable. The defendants also sought, but were denied, recovery of attorney’s fees in the amount of approximately $13,500,000, which the defendants appealed.

On September 26, 2017, the Fourth District Court of Appeals (the “Appellate Court”) affirmed in part and reversed in part the judgment and remanded the matter to the trial court for further proceedings. The Appellate Court determined that Otay and Flat Rock were the prevailing parties and awarded their costs on appeal, the $350,000 cost award in favor of the defendants was reversed by operation of law, and the defendants’ appeal of the trial court’s denial of the defendants’ claim for attorneys’ fees was dismissed as being moot. The defendants’ requests for rehearing with the Appellate Court were summarily denied.

The decision of the Appellate Court became final on October 27, 2017. The defendants have until November 6, 2017 to file a petition for review with the California Supreme Court, which must be acted upon by the California Supreme Court within sixty (60) days (January 5, 2018). We believe it is unlikely the Supreme Court will grant review of the decision, and that the matter will be remanded to the Superior Court for further proceedings consistent with the Appellate Court’s decision. We have not reversed the accrual of the cost award. No assurances can be given as to the ultimate outcome of this matter.

13. Share-Based Compensation

1999 Stock Incentive Plan:

On August 4, 2017, options to purchase an aggregate of 7,000 shares of Common Stock were granted to the members of the Board of Directors and 136,500 shares of Common Stock were granted to employees under our 1999 Stock Incentive Plan at an exercise price of $44.00 per share, the market price per share on the grant date. Options granted become exercisable in four equal instalments starting one year from date of grant and must be exercised within five years from date of grant and will be expensed equally over the four year vesting period. As of September 30, 2017, 255,400 shares are available under the 1999 Stock Incentive Plan.

2017 RSU Plan:

On August 4, 2017, the Board of Directors adopted an RSU Opportunity Plan (the “2017 RSU Plan”) under which 66,000 shares of Common Stock are authorized for issuance to our executive officers. The restricted stock units (“RSUs”) may be granted at the end of the performance period based on the degree to which performance criteria has been satisfied at the sole discretion of the Board of Directors. The performance period ends on December 31, 2019, and awards will be issued no later than April 1, 2020.

2014 RSU Plan:

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On August 13, 2014, the Board of Directors adopted an RSU Opportunity Plan (the "2014 RSU Plan”) under which 100,000 shares of Common Stock are authorized for issuance under the 2014 RSU Plan to our executive officers. Participants were eligible for RSU awards based on satisfaction of performance criteria established by the Board of Directors in 2014. The performance period under the 2014 RSU Plan ended on December 31, 2016. The Board of Directors evaluated the participants' performance against the performance criteria and awarded an aggregate of 75,000 RSUs to the participants on March 15, 2017. Fifty percent of the RSU award under the 2014 RSU Plan will vest on December 31, 2017, and the remaining fifty percent will vest on December 31, 2018, provided that the executive officer has been continuously employed by the Company through the applicable vesting date.

The 2014 RSU grant consists of two settlement features: (1) 45,000 RSUs will be settled through the issuance of shares of Common Stock within 30 days of each vesting date; this component is classified as an equity award. The closing price on March 15, 2017 of $44.20 was used to value this component of the award. Stock compensation expense for this component of the award was $300,000 and $700,000, respectively, for the three and nine months ended September 30, 2017. (2) 30,000 RSUs will be settled in cash based on the average closing price over a period of ten trading days immediately preceding the date of declaration which must occur within thirty days of the respective vesting date. This component is classified as a liability award, which requires us to measure the fair value of the award at the end of each reporting period. Using a fair value approach, stock compensation expense for this component of the award was $200,000 and $400,000, respectively, for the three and nine months ended September 30, 2017.

14. Segment Information

We have three reportable segments—real estate, farming and corporate.  Real estate operations consist of a variety of residential land development projects and commercial properties and other unimproved land, all in various stages of development. Real estate also includes the equity method investments in BRP Holding, BRP Hotel and the Builder LLCs in the Otay Land project. Farming operations consist of the Rampage property which includes an operating grape vineyard and an almond orchard under development. Corporate primarily consists of investment income and overhead expenses. Corporate amounts are not allocated to the operating units.

Farming revenues are generally recognized during the second half of the year when the crop is harvested and sold.

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Certain information concerning our segments for the three and nine months ended September 30, 2017 and 2016 is presented in the following table.

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
	(in thousands)
Revenues:
Real estate	$	14,011		$	8,760		$	61,659		$	55,818
Farming	3,411			4,427			3,411			4,427
Corporate	3			3			9			9
Total consolidated revenues	$	17,425		$	13,190		$	65,079		$	60,254
Income (loss) from continuing operations before income taxes and noncontrolling interest:
Real estate	$	2,113		$	955		$	10,938		$	11,213
Farming	2,100			3,166			(59		)	1,050
Corporate	(3,123		)	(2,547		)	(8,436		)	(6,944		)
Total consolidated income (loss) from continuing operations before income taxes and noncontrolling interest	$	1,090		$	1,574		$	2,443		$	5,319
Depreciation and amortization expenses:
Real estate	$	817		$	858		$	2,488		$	2,695
Farming	95			71			247			189
Corporate	15			12			44			35
Total consolidated depreciation and amortization expenses	$	927		$	941		$	2,779		$	2,919
Identifiable assets employed:				September 30, 2017			December 31, 2016
Real estate				$	528,615		$	516,260
Farming				13,442			13,468
Corporate				52,382			52,604
Total consolidated assets				$	594,439		$	582,332

15. Subsequent events

During the third quarter of 2017, dividends of $13,000,000 were declared by our subsidiary that owns the San Elijo Hills project, of which $1,950,000 related to the noncontrolling interest. The dividends were paid during the fourth quarter of 2017. The dividends that will be retained by us will not increase the amount of consolidated liquidity reflected on our consolidated balance sheet; however, they will increase the liquidity of the parent Company.

In October 2017, we extended our 10,515 square feet lease at the Carlsbad, CA office through October 31, 2023.

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Interim Operations.

Statements included in this Report may contain forward-looking statements.  See “Cautionary Statement for Forward-Looking Information” below.  The following should be read in conjunction with Management’s Discussion and

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Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 (the “2016 10-K”).

Overview

HomeFed Corporation is a developer and owner of residential and mixed-use real estate projects in California, Virginia, South Carolina, Florida, Maine and New York.  After many years in the entitlement process, the majority of our assets are now either operating real estate or entitled land ready for sale.  We may also from time to time investigate and pursue the acquisition of new real estate projects, both residential and commercial. 

Results of Operations 

We have three reportable segments—real estate, farming and corporate.  Real estate operations consist of a variety of residential land development projects and commercial properties and other unimproved land, all in various stages of development.  Real estate also includes the equity method investments in BRP Holding, BRP Hotel and the Builder LLCs in the Otay Land project.  Farming operations consist of the Rampage property which includes an operating grape vineyard and an almond orchard.  Corporate primarily consists of interest income and overhead expenses.  Corporate amounts are not allocated to the operating units.

Certain information concerning our segments for the three and nine months ended September 30, 2017 and 2016 is presented in the following table. 

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
	(in thousands)
Revenues:
Real estate	$	14,011		$	8,760		$	61,659		$	55,818
Farming	3,411			4,427			3,411			4,427
Corporate	3			3			9			9
Total consolidated revenues	$	17,425		$	13,190		$	65,079		$	60,254
Income (loss) from continuing operations before income taxes and noncontrolling interest:
Real estate	$	2,113		$	955		$	10,938		$	11,213
Farming	2,100			3,166			(59		)	1,050
Corporate	(3,123		)	(2,547		)	(8,436		)	(6,944		)
Total consolidated income (loss) from continuing operations before income taxes and noncontrolling interest	$	1,090		$	1,574		$	2,443		$	5,319

Real Estate

Otay LandProject:

We own approximately 4,450 acres of land within the Otay Ranch community. Approximately 2,800 acres are designated as various qualities of non-developable open space mitigation land. We refer to all of our acreage as our Otay Land project, which is currently approved for approximately 13,050 residential units and 1.85 million square feet of commercial space. The Otay Land project is in the early stages of development and additional permits are in process. Development will occur in phases, or by village. We are currently developing in the first of five villages (village three, now known as Village of Escaya).  During the course of development, we discovered the presence of underground soil gas impacted with methane and certain volatile organic compounds (collectively "compounds") in a portion of the Village of Escaya project.  These types of compounds commonly exist in soils and can be mitigated

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through the construction process.  We are working with local authorities and have developed measures to mitigate the effect of the impacted soil gas.  The number of homes that will need mitigating is to be determined as further testing is conducted while development progresses.  We expect that costs associated with mitigating during the homebuilding process will be shared with the builders through our Builder LLCs.

The grand opening occurred in June 2017. As of October 24, 2017, 224 homes have been released for sale and 165 homes are under contract with closings expected to begin in the fourth quarter of 2017.

There were no sales of real estate at the Otay Land project during the three months ended September 30, 2017 and 2016 and no sales of real estate during the nine months ended September 30, 2017. As discussed above in Notes 3 and 10, revenues include $30,000,000 for the land sold to the Village III Master during the nine months ended September 30, 2016. Cost of sales was $22,800,000 for the nine months ended September 30, 2016.

General and administrative expenses increased by $150,000 and $900,000, respectively, for the three and nine months ended September 30, 2017 as compared to the same periods in 2016 which includes a $200,000 and $1,000,000 increase in marketing expenses, respectively, related to the initial launch of the Village of Escaya. For the three and nine months 2017 periods versus the three and nine months 2016 period, legal expenses declined by $50,000 and $100,000, respectively, due to decreased legal fees related to the Flat Rock litigation (see Note 12 for more information).

Interest and other income decreased by $1,000,000 during the nine month 2017 period versus the nine month 2016 period due to the recovery of $1,000,000 in 2016 from the judgment against certain defendants in the Flat Rock litigation.

San Elijo Hills Project:

We own 85% of and serve as the development manager for San Elijo Hills, a master-planned community in San Diego County, California, consisting of about 3,500 homes and apartments and a commercial and residential Towncenter.

The Towncenter consists of three phases. The first and second phases, which include a total of 48,800 square feet of commercial space and 12 multi-family units, were sold for $5,800,000 to a local developer during the nine months ended September 30, 2017. Revenue of $5,800,000 was recognized at the time of sale, and cost of sales aggregated $4,700,000. The third phase of the Towncenter is a 2.5 acre parcel of land that is under contract with a local developer for a cash payment of $600,000 plus $100,000 per multi-family unit that the buyer is able to entitle, currently anticipated to be 12 multi-family units. We received a $230,000 non-refundable deposit during the third quarter of 2017 which will be applied to the sales price at time of closing. Closing of the third phase is subject to entitlement approvals and is anticipated to close in the fourth quarter of 2017.

Through September 30, 2017, we have sold 3,400 of the total of 3,463 single family lots and multi-family units, and have an agreement in place with a homebuilder to construct and sell on our behalf, for a fee, homes on the remaining 49 single family lots. For the nine months ended September 30, 2017, we sold 9 of 58 homes under the agreement with a local San Diego luxury homebuilder for $13,100,000. At time of closing, we recognized real estate revenues of $13,000,000 and cost of sales of $12,200,000 for nine months ended September 30, 2017.

As of October 24, 2017, we have entered into agreements to sell 15 single family homes at the San Elijo Hills project under these agreements for aggregate cash proceeds of $21,500,000, which we expect to close during the fourth quarter of 2017 and the first half of 2018.

Since we are obligated to complete certain improvements to the lots sold, a portion of the revenue from sales of real estate is deferred, and is recognized as revenues upon the completion of the required improvements to the property, including costs related to common areas, under the percentage of completion method of accounting.  For the three months ended September 30, 2017 and 2016, revenues include amounts that were deferred from lot sales in prior periods of $250,000 and $75,000, respectively. For the nine months ended September 30, 2017 and 2016, revenues include amounts that were previously deferred of $3,050,000 and $775,000, respectively.

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Cost of sales of real estate related to the recognized deferred revenue for the three months ended September 30, 2017 and 2016 was $50,000 and $35,000, respectively, and cost of sales of real estate for the nine months ended September 30, 2017 and 2016 was $1,650,000 and $360,000, respectively. Cost of sales was recognized in the same proportion to the amount of revenue recognized under the percentage of completion method of accounting.

We recorded co-op marketing and advertising fee revenue of approximately $150,000 and $130,000 for the three months ended September 30, 2017 and 2016, respectively, and $300,000 for the nine months ended September 30, 2017 and 2016. We record these fees pursuant to contractual agreements, which are generally recorded when builders sell homes, and the fees are based upon a fixed percentage of the homes’ selling price. 

Depreciation and amortization expenses decreased by $50,000 for the nine month 2017 period versus the same period in 2016 primarily due to the sale of phase one and two of the Towncenter during the first quarter of 2017.

Ashville Park:

Ashville Park is a 450 acre master planned community in Virginia Beach, Virginia, which we are developing in phases. The first two phases, which together consist of 91 finished lots and a 164 lot development, have been sold. We are currently awaiting approval for the remaining three phases. There have been delays associated with the City of Virginia Beach’s need to address storm water management issues, causing the timing of our future development to be uncertain. We are cooperating with the City and working toward a solution that may allow us to proceed with development of Village C, a 116 single family lot development, in the near term and may require that we participate in a share of the cost associated with improvement of the City storm water system.

There were no sales at the Ashville Park project during the three and nine months ended September 30, 2017 and during the three months ended September 30, 2016. During the nine months ended September 30, 2016, we sold the former visitor center for net cash proceeds of $550,000 which generated a gross profit of $250,000.

Since we are obligated to complete certain improvements to the lots sold, a portion of the revenue from sales of real estate is deferred, and is recognized as revenues upon the completion of the required improvements to the property, including costs related to common areas, under the percentage of completion method of accounting.  Revenues include previously deferred amounts that were not significant for the three and nine months ended September 30, 2017, and $100,000 and $450,000 for the three and nine months ended September 30, 2016, respectively.

We recorded co-op marketing and advertising fee revenue of approximately $10,000 and $60,000 for the three months ended September 30, 2017 and 2016, respectively, and $100,000 and $200,000 for the nine months ended September 30, 2017 and 2016, respectively.  We record these fees pursuant to contractual agreements, which are generally recorded when builders sell the homes as the fees are based upon a fixed percentage of the homes’ selling price. 

Revenues from sales of real estate also include amounts recognized pursuant to revenue or profit sharing with a homebuilder of $40,000 and $35,000 for the three months ended September 30, 2017 and 2016, respectively, and $100,000 and $145,000 for the nine months ended September 30, 2017 and 2016, respectively.

Cost of sales of real estate was not significant for the three and nine ended September 30, 2017. Cost of sales of real estate was not significant during the three months ended September 30, 2016 and $450,000 for the nine months ended September 30, 2016. Cost of sales was recognized in the same proportion to the amount of revenue recognized under the percentage of completion method of accounting.

The Market Common:

The Market Common is a 114 acre mixed-use retail, office and residential lifestyle center, including adjacent land for future commercial and residential development. It includes retail and office space, as well as long term apartments, of which is about 96% leased.

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For the three and nine months September 30, 2017 and 2016, the rental activity is as follows:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
Rental income	$	2,500,000		$	2,600,000		$	8,200,000		$	7,650,000
Amortization of lease intangibles included in rental income	(100,000		)	(100,000		)	(300,000		)	(250,000		)
Adjustment for straight-line rental income	(40,000		)	(50,000		)	(100,000		)	(50,000		)
Rental operating expenses	$	1,350,000		$	1,300,000		$	3,600,000		$	3,950,000

Rental income for the nine months period ended September 30, 2017 includes $400,000 pursuant to the termination of the lease with Piggly Wiggly in June 2017.

For the three and nine months ended September 30, 2017 and 2016, we have closed on sales of real estate as follows:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
	Number of units sold	Cash Proceeds		Number of units sold	Cash Proceeds		Number of units sold	Cash Proceeds		Number of units sold	Cash Proceeds
Single family lots	8	$	400,000	10	$	450,000	30	$	1,380,000	32	$	1,500,000
Multi-family lots	7	180,000		—	—		15	380,000		10	250,000

Revenues from sales of real estate at The Market Common also include amounts recognized pursuant to revenue or profit sharing with a homebuilder of $200,000 and $500,000 for the three months ended September 30, 2017 and 2016, respectively, and $950,000 and $1,150,000 for the nine months ended September 30, 2017 and 2016, respectively.

General and administrative expenses decreased by $50,000 and $200,000 for the three and nine months ended September 30, 2017 as compared to the same periods in 2016 primarily due to the reversal of certain fees previously accrued regarding an uncertain tax liability that was successfully resolved during 2017. Legal expenses also decreased by $50,000 for the nine months ended September 30, 2017 as compared to the same period in 2016 primarily due to lower activity at the project.

Depreciation and amortization expenses decreased by $150,000 for the nine month 2017 period versus the same period in 2016 primarily due to a runoff of certain depreciable and amortizable assets over the course of 2016.

SweetBay project:

The SweetBay project is a 700 acre mixed use master planned community located in Panama City, Florida. The project is entitled for up to 3,200 single family and multi-family units, 700,000 square feet of commercial space, and a marina with up to 117 wet slips and 240 dry docks. Development continues in the initial portion of Phase 1 of the community consisting of 127 single family homes, which are currently being built for us by a local homebuilder, for a fee, with nine model homes and the welcome center which are opened. Development has begun in the second portion of Phase 1 consisting of 56 single family homes, a community pool and a neighborhood park.

We sold 21 and 53 single family homes for $6,900,000 and $18,550,000, respectively, during the three and nine months ended September 30, 2017. Cost of sales of real estate was $7,100,000 and $18,400,000, respectively, for the three and nine months ended September 30, 2017. The pre-tax loss for the three months ended September 30, 2017 is due to an increase in home building costs of approximately $100,000 on homes closed and includes a reserve for a potential loss of $100,000 that was recorded related to home sales under contract which are expected to close during the fourth quarter of 2017 and 2018. During the nine months ended September 30, 2016, we received and recognized $1,300,000

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as sales of real estate from the Florida Department of Transportation for the purchase of approximately seven acres of land at the SweetBay project to be used for the expansion of State Road 390. Cost of sales related to this transaction was $70,000. This sale was a unique transaction in that we sold unimproved land.

Pacho Project:

The Pacho project is a leasehold interest in approximately 2,369 acres of unentitled property located along the central California coast in San Luis Obispo County, California. We own a 90% controlling interest in the partnerships that are the lessees under a long term lease entered into on December 26, 1968. The lessor is an affiliate of Pacific Gas & Electric (“PG&E”), which owns the nearby Diablo Canyon Power Plant.

In 2016, PG&E began the process of decommissioning its Diablo Canyon Power Plant, which could take an undetermined period of time. The lessor has recently stated that it will not make any commitments on the disposition of certain lands, including the Pacho Property, until PG&E’s recommendations for decommissioning the Diablo Canyon Power Plant have been considered by the California Public Utility Commission as part of PG&E’s decommissioning plan. The time frame for completion of the review and approval of the decommissioning plan is uncertain. We are cooperating with PG&E during their public review process regarding disposition of the lands and are continuing to pursue fee title to the Pacho Property, which we acquired in the Acquisition and which is currently held for development as a leasehold interest with a book value of $17,750,000 as of September 30, 2017. If we are unable to obtain fee title to the property in a reasonable period of time, we may not develop the property and an impairment of the asset may be taken.

General administration expenses decreased by $50,000 and $100,000, respectively, for the three and nine months ended September 30, 2017 as compared to the same periods in 2016 due to decreased legal fees.

Brooklyn Renaissance Plaza and Hotel:

Brooklyn Renaissance Plaza is comprised of a 665 room hotel operated by Marriott, an approximately 850,000 square foot office building complex and an 888 space parking garage located in Brooklyn, New York. We own a 25.80% equity interest in the hotel and a 61.25% equity interest in the office building and garage.

BRP Leasing:

BRP leasing is the indirect obligor under a lease through October 2018 of approximately 286,500 square feet of office space at Brooklyn Renaissance Plaza, substantially all of which has been sublet through October 2018.

For the three and nine months ended September 30, 2017 and 2016, the rental activity is as follows:

	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2017		2016			2017		2016
Rental income	$	3,250,000	$	3,000,000		$	9,600,000	$	9,250,000
Amortization of lease intangibles included in rental income	450,000		400,000			1,250,000		1,200,000
Adjustment for straight-line rental income	100,000		(20,000		)	300,000		(60,000		)
Rental operating expenses	$	3,050,000	$	3,000,000		$	9,000,000	$	8,900,000

Farming

Rampage Property:

The Rampage property is an approximately 1,650 acre grape vineyard and almond orchard located in southern Madera County, California. Farming revenues are generally recognized during the second half of the year when the crop is

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harvested and sold. In June 2017, the southern Madera County, California area experienced an extended period of days with temperatures in excess of 100 degrees. A portion of the vineyard was adversely impacted by the excessive and extended period of heat.

Farming revenues decreased by $1,000,000 for the three and nine months ended September 30, 2017 as compared to the same periods in 2016 as a result of the weather event in June 2017. However, we have filed a claim under our crop insurance policy for damages incurred but we are uncertain how much will be ultimately received. We experienced our first almond harvest, and sales commenced during the third quarter of 2017. Revenues from almonds will be immaterial for 2017 but we anticipate a larger almond yield from the 2018 harvest.

Depreciation and amortization expenses increased by $50,000 for the nine month 2017 period versus the same period in 2016 primarily due to the acquisition of farming equipment related to the almond orchard during 2017.

Corporate

General and administrative expenses increased by $700,000 during the three months ended September 30, 2017 as compared to the same period in 2016, primarily due to an increase in stock compensation and a loss on extinguishment of debt.  Stock compensation increased by $550,000 related to the grant of RSUs to executive officers in March 2017 and the employee stock option grant on August 4, 2017 (see Note 13 for more information). When we extinguished the Notes during September 2017, a portion of the capitalized issuance costs of approximately $350,000 were immediately expensed as a loss on extinguishment of debt. Professional fees declined by $200,000 due to decreased business activity pursuing new deals during the three month 2017 period versus the three month 2016 period.

General and administrative expenses increased by $1,500,000 during the nine months ended September 30, 2017 as compared to the same period in 2016, primarily due to an increase in stock compensation, a loss on extinguishment of debt and salaries expenses. Stock compensation increased by $1,150,000 related to the grant of RSUs to executive officers in March 2017 and the employee stock option grant on August 4, 2017 (see Note 13 for more information). Upon extinguishing the 6.5% Senior Notes due 2018 during September 2017, a portion of the capitalized issuance costs of approximately $350,000 were immediately expensed as a loss on extinguishment of debt. Compensation and benefits increased by $150,000 due to higher headcount and estimated bonus expense. Professional fees declined by $150,000 due to decreased business activity pursuing new deals during the nine month 2017 period versus the nine month 2016 period.

During the nine months ended September 30, 2017, we effectively settled our 2014 federal tax examination with the IRS and, as a result, we recognized an income tax benefit of $13,200,000 in our consolidated results of operations. During the second quarter of 2016, we were able to conclude that it is more likely than not that we will be able to realize the entire portion of our net deferred tax asset. As a result, $31,850,000 of the deferred tax valuation allowance was released as a credit to income tax expense during the nine months ended September 30, 2016. For the three months ended September 30, 2017 and 2016, our provision for income taxes was $600,000 and $350,000, respectively, and for the nine months ended September 30, 2017 and 2016, our benefit for income taxes was $12,000,000 and $30,150,000, respectively. 

Liquidity and Capital Resources

Net cash of $8,150,000 was used for operating activities during the nine months ended September 30, 2017. For the nine months ended September 30, 2017, cash was used for payments of federal and state income taxes and real estate expenditures on held for development properties; however, this decrease in cash was partially offset by cash generated primarily from sales at the San Elijo Hills and SweetBay projects. For the nine months ended September 30, 2016, cash was provided by the sale of real estate at the Otay Land project in the amount of $30,000,000. For the nine months ended September 30, 2016, cash was used for payments of federal and state income taxes and real estate expenditures on held for development properties including the improvement of the almond orchard.

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Net cash of $5,700,000 was used for investing activities during the nine months 2017 period consisting of a $25,700,000 equity investment in the Builder LLCs in order to fund the infrastructure improvements at the Village of Escaya community partially offset by a $20,000,000 capital distribution from the Builder LLCs as a credit for the infrastructure improvements at the Village of Escaya community. Net cash of $10,250,000 was used for investing activities during the nine months 2016 period consisting of a $3,250,000 equity investment in BRP Hotel for the funding of the hotel renovation and a $7,000,000 equity investment in Village III Master in order to fund the project for the infrastructure improvements.

Net cash of $3,900,000 was used for financing activities related to the net cash outflow impact from issuing and extinguishing debt of $3,150,000 and payment of debt issuance costs of $800,000 related to the Notes, the New Notes and EB-5 Program during the nine months ended September 30, 2017. Net cash of $4,100,000 was used for financing activities during the nine months 2016 period related to the $3,300,000 distribution to a non-controlling interest related to the San Elijo Hills project, the repurchase of $1,250,000 of debt through asset sale offers and the payment of debt issuance costs of $600,000. During the nine months ended September 30, 2016, we received $1,000,000 from the exercise of options to purchase shares of our Common Stock.

Our principal sources of funds are cash and cash equivalents, proceeds from the sale of real estate, proceeds from sales of bulk grapes and almonds, rental income from leased properties, fee income from certain projects, dividends and tax sharing payments from subsidiaries, interest income, distributions from equity method investments, Rampage property’s lines of credit, proceeds from the issuance of the Notes and New Notes (as described below) and financing from the EB-5 Program (see below for more information).

On June 30, 2015, we issued $125,000,000 principal amount of 6.5% Senior Notes due 2018 (the “Old Notes”) in a private placement. The Old Notes were fully and unconditionally guaranteed by our wholly-owned domestic subsidiaries and any of our future domestic wholly-owned subsidiaries, and matured on June 30, 2018. The Old Notes were senior unsecured obligations and the guarantees are the senior unsecured obligations of the Guarantors.

In addition, we were required to use the net proceeds of certain asset sales to offer to purchase the Old Notes at a price equal to 100% of the aggregate principal amount outstanding plus accrued and unpaid interest as of the date fixed for the closing of such asset sale offer. Accordingly, we made the following repurchases:

Date of Repurchase	Principal Repurchased	Approximate Interest Payment Associated with Repurchase
December 15, 2016	$4,162,000	$120,000
November 15, 2016	$9,176,000	$220,000
September 27, 2016	$625,000	$10,000
January 28, 2016	$618,000	$3,000
October 20, 2015	$7,274,000	$146,000

On September 27, 2017, we and certain of our domestic wholly-owned subsidiaries as guarantors (the “Guarantors”) entered into purchase agreements (collectively, the “Purchase Agreements”) with certain investors named therein (the “Purchasers”) pursuant to which we agreed to issue to the Purchasers an aggregate of $75,000,000 of 6.5% Senior Notes due 2019 (the “New Notes”) in a private placement. Pursuant to the terms of the Purchase Agreements, the purchase price for the New Notes was 100% of the principal amount. Pursuant to the Placement Agency Agreement, Jefferies LLC (“Jefferies”), a wholly-owned subsidiary of Leucadia, received a fee of $100,000 for acting as the placement agent and the closing agent.

On September 28, 2017, we used proceeds of the New Notes, as described below, together with cash on hand, to redeem all of the outstanding Old Notes. After considering the repurchases and redemption, there is no remaining principal due under the Notes as of September 30, 2017. In connection with the extinguishment of the Notes, issuance costs of

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approximately $350,000 were recorded as an expense.

The New Notes were issued on September 28, 2017 (“Issue Date”), pursuant to an indenture among us, the Guarantors and Wilmington Trust, N.A., as trustee (“Indenture”), containing such terms as set forth below. The New Notes mature on October 1, 2019 and are fully and unconditionally guaranteed by the Guarantors on the terms provided in the Indenture. Interest on the Notes accrues at a rate of 6.50% per annum and is payable semi-annually in arrears on April 1 and October 1, commencing April 1, 2018. The New Notes are senior unsecured obligations of the Company and the guarantees are the senior unsecured obligations of the Guarantors.

At September 30, 2017, the New Notes had a $75,000,000 principal amount outstanding, and there was no principal amount outstanding on the Old Notes.

We may not redeem or repurchase the New Notes prior to April 1, 2018 after which time, we may redeem the New Notes, in whole or in part, at any time or in part from time to time at a redemption price equal to 100% of the principal amount of the Notes plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

Upon the occurrence of a Change of Control (as defined in the Indenture) after the Issue Date, to the extent the New Notes were not otherwise redeemed, we must make an offer to purchase all of the outstanding New Notes at a price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase, in each case, as provided in, and subject to the terms of, the Indenture. Pursuant to the Indenture, we will use the net proceeds of certain asset sales to offer to purchase the New Notes at a price equal to 100% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase.

The Indenture contains covenants that, among other things, limit our and certain of our subsidiaries’ ability to incur, issue, assume or guarantee certain indebtedness subject to exceptions (including allowing us to borrow up to $15,000,000 under our Rampage Vineyard revolving facility, another $70,000,000 of indebtedness collateralized by our other assets, and up to $65,000,000 under a construction loan secured by our Village of Escaya mixed use apartment project), issue shares of disqualified or preferred stock, pay dividends on equity, buy back our common shares outside of existing stock compensation plan arrangements, or consummate certain asset sales or affiliate transactions. The Indenture also permits certain financing transactions in connection with the EB-5 Program, as defined below, for the project involving infrastructure improvements at the Village of Escaya subject to certain restrictions and limitation as set forth in the Indenture. Additionally, certain customary events of default may result in an acceleration of the maturity of the New Notes.

We expect that our cash and cash equivalents, together with the other sources described above, will be sufficient for both our short and long term liquidity needs. We also have the flexibility to refinance a portion of our long term debt if we choose to conserve cash for future business opportunities. Residential sales at the Otay Land, San Elijo Hills, Ashville Park, The Market Common and the SweetBay projects are expected to be a source of funds to us in the future; however, except as otherwise disclosed, the amount and timing is uncertain. We are not relying on receipt of funds from our other projects for the short and intermediate term, since the timing of development activity and sales of developable and undevelopable property cannot be predicted with any certainty. Except as disclosed herein, we are not committed to acquire any new real estate projects, but we believe we have sufficient liquidity to take advantage of appropriate acquisition opportunities if they are presented.

Information about the Otay Land, San Elijo Hills and Ashville Park projects, The Market Common, SweetBay and our other projects is provided below. Because of the nature of our real estate projects, we do not expect operating cash flows will be consistent from year to year.

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Otay Land Project:

In April 2016, through a HomeFed subsidiary, we formed a limited liability company, HomeFed Village III Master, LLC (“Village III Master”), to own and develop an approximate 450 acre community planned for 992 homes in the Otay Ranch General Plan Area of Chula Vista, California. We entered into an operating agreement with three builders as members of Village III Master to build and sell 948 homes within the community.  We made an initial non-cash capital contribution of $20,000,000 which represents the fair market value of the land we contributed to Village III Master after considering proceeds of $30,000,000 we received from the builders at closing, which represents the value of their capital contributions. The historical book value of the land we contributed to Village III Master is $15,150,000, which represents a basis difference of $4,850,000. The basis difference will be amortized as additional income for us as future real estate sales occur.

In January 2017, we recorded the final map that subdivided the approximately 450 acre parcel of land in the Otay Ranch General Plan Area of Chula Vista, California, which is now known as the Village of Escaya. We formed three limited liability companies (each, a "Builder LLC") to own and develop 948 homes within the Village of Escaya and entered into individual operating agreements with each of the three builders as members of the Builder LLCs. Upon admittance of the three builders into their respective Builder LLCs, each of the three builders withdrew as members of Village III Master, which is now a wholly owned subsidiary of HomeFed Corporation. On January 5, 2017, we made an aggregate capital contribution valued at $33,200,000 to the three Builder LLCs, representing land and completed improvement value. In addition to the $30,000,000 contribution made by the builders, as mentioned above, and $2,250,000 of capitalizable land improvements made by the builders, the builders then made an additional cash contribution of $20,000,000 in January 2017 upon final map subdivision and entry into their respective Builder LLCs, which was used to fund infrastructure costs completed by us.

Although each of the three Builder LLCs is considered a variable interest entity, we do not consolidate any of them since we are not deemed to be the primary beneficiary as we share joint control of each Builder LLC through a management committee and lack authority over establishing home sales prices and accepting offers. However, since two of our executive officers are members of the four-member management committee at each Builder LLC, designated to consider major decisions for that Builder LLC, we account for them under the equity method of accounting. Our share of the income earned from the sales of built homes in any of these three Builder LLCs will be recorded as income from equity method investments.

Our maximum exposure to loss is limited to our equity commitment in each Builder LLC and any cost overruns as described below. We are responsible for the remaining cost of developing the community infrastructure, for which we have received credit to date as a capital contribution, with funding guaranteed by us under the respective operating agreements and for the marketing costs of the Village of Escaya. Under the Builder LLCs, credit for capital contributions related to our infrastructure improvements is limited to $78,600,000, and we are responsible for any costs in excess of this limit to complete the community infrastructure. The builders are responsible for the remaining construction and the selling of the 948 homes with funding guaranteed by their respective parent entities.

We are contractually obligated to obtain infrastructure improvement bonds on behalf of each Builder LLC. See Note 12 for more information.

EB-5 Program:

We intend to fund our Village of Escaya project (“Village 3”or the “Project”) in part by raising funds under the Immigrant Investor Program administered by the U.S. Citizenship and Immigration Services ("USCIS") pursuant to the Immigration and Nationality Act ("EB-5 Program"). This program was created to stimulate the U.S. economy through the creation of jobs and capital investments in U.S. companies by foreign investors. The program allocates a limited number of immigrant visas per year to qualified individuals seeking lawful permanent resident status on the basis of their investment in a U.S. commercial enterprise. Regional centers are organizations, either publicly owned by cities, states or regional development agencies or privately owned, which facilitate investment in job-creating economic development projects by pooling capital raised under the EB-5 Program. Geographic areas within regional centers that are rural areas or areas experiencing unemployment numbers higher than the national unemployment average rates are designated as Targeted Employment Areas (“TEA”). The EB-5 program is set to

29

expire on December 8, 2017 but is expected to be extended. Various reforms and bills have been proposed and will be considered by Congress in the coming months.

In February 2017, we formed Otay Village III Lender, LLC, which is intended to serve as a new commercial enterprise (“NCE”) under the EB-5 Program. The NCE is managed by Otay Village III Manager, LLC, a wholly owned subsidiary of HomeFed. The NCE is seeking to raise up to $125,000,000 by offering up to 250 units in the NCE to qualified accredited EB-5 investors for a subscription price of $500,000 per unit, which is the minimum investment that an investor in a TEA project is required to make pursuant to EB-5 Program rules. The proceeds of the offering will be used to repay any outstanding bridge loan provided by HomeFed to its wholly owned subsidiary HomeFed Village III LLC, a job creating entity under the EB-5 Program, and to fund infrastructure costs related to the development of Village 3.

The NCE has offered the units to investors primarily located in China, Vietnam, and South Korea either directly or through relationships with agents qualified in their respective countries, in which case the NCE will pay an agent fee. Once an investor’s subscription and funds are accepted by the NCE, the investor must file an I-526 petition with the USCIS seeking approval of the investment’s suitability under the EB-5 Program requirements and the investor’s suitability and source of funds. All investments are held in an escrow account and will not be released until the investor files their I-526 petition with the USCIS and we have identified and provided collateral to secure the amount of the funds drawn from escrow. The Village 3 project must be approved by the USCIS under the EB-5 Program rules. Prior to approval by the USCIS, funds may be drawn from the escrow account with a HomeFed guarantee that funds will be returned in the event the Village 3 project is not approved. On September 18, 2017, $25,000,000 was drawn from escrow related to EB-5 financing to fund infrastructure costs related to the development of the Project. The drawn funds are guaranteed by us until the project is approved by the USCIS and is collateralized by certain Otay Village property. The loan term is five years with two one-year options to extend by us. The effective interest rate is approximately 3.5%.

As of October 24, 2017, we have $24,900,000 in escrow which is subject to approval by the USCIS and cannot be drawn until certain provisions (such as filing of Investor I-526, investor suitability and source of funds) are satisfied.

San Elijo Hills Project:

The Towncenter consists of multi-family residential units and commercial space, which are being constructed in three phases. During the nine months ended September 30, 2017, the 48,800 square feet of commercial space in phases one and two of the Towncenter and the 12 multi-family units in phase two were sold to a local developer for a cash payment of $5,800,000.

The third phase remains to be sold at the Towncenter which is a 2.5 acre parcel of land, formerly designated as a church site, and it is under contract with a local developer for a cash payment of $600,000 plus $100,000 per multi-family unit that the buyer is able to entitle, currently anticipated to be 12 multi-family units. Closing of the third phase of the Towncenter is subject to entitlement approvals by the City of San Marcos, and anticipated in the fourth quarter of 2017.

During June 2015, we entered into an agreement with a local San Diego based luxury homebuilder to construct and sell on our behalf, for a fee, up to 58 homes at the San Elijo Hills project. We received a $500,000 deposit during the third quarter of 2015 which is reflected in Other liabilities. This deposit is a builder performance deposit that will be fully refundable to the builder after the builder performs all of its requirements under the agreement. During the nine months ended September 30, 2017, we sold nine of these homes for $13,100,000.

As of October 24, 2017, we have entered into agreements to sell 15 single family homes at the San Elijo Hills project under this agreement for aggregate cash proceeds of $21,500,000. These home closings are anticipated to occur during the fourth quarter of 2017 and the first half of 2018.

As of September 30, 2017, the remaining land at the San Elijo Hills project to be sold or leased consists of 63 dwelling units (combined single and multi-family lots).

30

During the third quarter of 2017, dividends of $13,000,000 were declared by our subsidiary that owns the San Elijo Hills project, of which $1,950,000 related to the noncontrolling interest. The dividends were paid during the fourth quarter of 2017. The dividends retained by us did not increase the amount of consolidated liquidity reflected on our consolidated balance sheet; however, they did increase the liquidity of the parent Company.

Ashville Park Project:

There were no sales at the Ashville Park project during the three and nine months ended September 30, 2017 and during the three months ended September 30, 2016. During the nine months ended September 30, 2016, we sold the former visitor center for net cash proceeds of $550,000 which generated a gross profit of $250,000.

During August 2015, we agreed to purchase 67 acres of land for $5,000,000 located adjacent to our Ashville Park project with the intention to entitle an additional 67 single family lots into the project.  We placed a $200,000 refundable deposit and submitted the plans to the City of Virginia Beach.  The purchase was contingent upon approval of the 67 lot entitlement into our project by the City of Virginia Beach. We have terminated the transaction, and the refundable deposit was returned to us in August 2017.

The Market Common:

Cash proceeds from sales of real estate and other real estate activities at The Market Common during the three and nine months ended September 30, 2017 and 2016 is comprised of the following:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
	Number of units sold	Cash Proceeds		Number of units sold	Cash Proceeds		Number of units sold	Cash Proceeds		Number of units sold	Cash Proceeds
Single family lots	8	$	400,000	10	$	450,000	30	$	1,380,000	32	$	1,500,000
Multi-family lots	7	180,000		—	—		15	380,000		10	250,000
Profit sharing agreements	N/A	200,000		N/A	500,000		N/A	950,000		N/A	1,150,000

As of October 24, 2017, we have entered into an agreement to sell 34 single family lots for $1,700,000 and 63 multi-family lots for $850,000 at The Market Common to a homebuilder.  A non-refundable option deposit of $25,000 was transferred from Leucadia to us as part of the Acquisition.

We have placed $1,250,000 on deposit with a qualified financial institution to obtain a letter of credit for the City of Myrtle Beach in connection with The Market Common; such amount is reflected as restricted cash at September 30, 2017. 

SweetBay project:

During May 2015, we signed an agreement with a local builder to construct and sell on our behalf, for a fee, up to 127 homes at the SweetBay project. We sold 21 and 53 single family homes for $6,900,000 and $18,550,000 during the three and nine months ended September 30, 2017, respectively. As of October 24, 2017, we have entered into agreements to sell 26 single family homes at the SweetBay project under the local builder agreement for aggregate cash proceeds of $8,500,000 which are expected to close during the fourth quarter of 2017 and the first half of 2018.

Other projects:

In April 2015, we entered into a $15,000,000 revolving line of credit agreement.  Loans outstanding under this line of credit bear interest at monthly LIBOR plus 2.6% and are secured by the Rampage property. The draw period expires on January 1, 2021, and the loan matures on January 1, 2035.  There is also a $3,000,000 operational line of credit available that is secured by the Rampage property’s crops and matures on January 1, 2018.  As of September 30, 2017, no amounts have been drawn under either line of credit. 

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BRP Leasing is required to keep a minimum of $500,000 on deposit in an escrow account to secure its lease obligations.  At September 30, 2017, $1,400,000 was in the escrow account and is reflected as restricted cash.

Other liquidity information:

Option payments are non-refundable if we fulfill our obligations under the agreements, and will be applied to reduce the amount due from the purchasers at closing.  Although these agreements are binding on the purchasers, should we fulfill our obligations under the agreements within the specified timeframes and the purchasers decide not to close, our recourse will be primarily limited to retaining the option payments.

Since we are obligated to complete certain improvements to lots sold at the San Elijo Hills, Ashville Park, SweetBay projects and The Market Common, a portion of the revenue from sales of real estate is deferred, and is recognized as revenues upon the completion of the required improvements to the property, including costs related to common areas, under the percentage of completion method of accounting.  As of September 30, 2017, $1,450,000 of revenue has been deferred pending completion of the required improvements.  Estimates of future property available for sale, the timing of the sales, selling prices and future development costs are based upon current development plans for the projects and will change based on the strength of the real estate market or other factors that are not within our control.

As of September 30, 2017, we had consolidated cash and cash equivalents aggregating $35,400,000.

Cautionary Statement for Forward-Looking Information 

Statements included in this Report may contain forward-looking statements.  Such statements may relate, but are not limited, to projections of revenues, income or loss, development expenditures, plans for growth and future operations, competition and regulation, as well as assumptions relating to the foregoing.  Such forward-looking statements are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted or quantified.  When used in this Report, the words “estimates,” “expects,” “anticipates,” “believes,” “plans,” “intends” and variations of such words and similar expressions are intended to identify forward-looking statements that involve risks and uncertainties.  Future events and actual results could differ materially from those set forth in, contemplated by or underlying the forward-looking statements.

Factors that could cause actual results to differ materially from any results projected, forecasted, estimated or budgeted or may materially and adversely affect our actual results include but are not limited to the following: the performance of the real estate industry in general; changes in mortgage interest rate levels or changes in consumer lending practices that reduce demand for housing; turmoil in the mortgage lending markets; the economic strength of the regions where our business is concentrated; changes in domestic laws and government regulations or in the implementation and/or enforcement of government rules and regulations; demographic changes that reduce the demand for housing; increases in real estate taxes and other local government fees; significant competition from other real estate developers and homebuilders; delays in construction schedules and cost overruns; increased costs for land, materials and labor; imposition of limitations on our ability to develop our properties resulting from condemnations, environmental laws and regulations and developments in or new applications thereof; earthquakes, fires and other natural disasters where our properties are located; construction defect liability on structures we build or that are built on land that we develop; our ability to insure certain risks economically; shortages of adequate water resources and reliable energy sources in the areas where we own real estate projects; the actual cost of environmental liabilities concerning our land could exceed liabilities recorded; opposition from local community or political groups at our development projects; risks associated with the acquisition of Leucadia’s real estate assets and investments; influence over our affairs by our principal stockholders; our ability to generate sufficient taxable income to fully realize our deferred tax asset; limitations on our business activities imposed by the terms of our indentures and our ability to finance our development projects and related business activities.  For additional information see Part I, Item 1A. Risk Factors in the 2016 10-K and in Item 1A. Risk Factors in Part II in this quarterly report.

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Undue reliance should not be placed on these forward-looking statements, which are applicable only as of the date hereof.  We undertake no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this Report or to reflect the occurrence of unanticipated events.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

Information required under this Item is contained in Item 7A of the 2016 10-K, and is incorporated by reference herein.

Item 4.  Controls and Procedures.

Our management evaluated, with the participation of our principal executive and principal financial officers, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of September 30, 2017.  Based on their evaluation, our principal executive and principal financial officers concluded that our disclosure controls and procedures were effective as of September 30, 2017.

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our fiscal quarter ended September 30, 2017, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1A. Risk Factors.

Our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 includes a detailed discussion of the Risk Factors applicable to us. The following are updates to our risk factors since December 31, 2016:

Cancellation of the EB-5 Program, significant changes in the program guidelines, or the inability to successfully raise capital under the program may adversely affect our ability to complete capital improvements at our projects and could adversely impact our operations. The current EB-5 Program expires on December 8, 2017 but is expected to be extended. Though the program has been regularly extended since inception, there is no guarantee that it will be approved for future extensions. In addition, the program guidelines may change which may adversely impact our ability to raise capital under the program. We intend to fund our Otay Ranch Village 3 project in part by raising funds under the program. Delay in extension of the program or changes in the program guidelines may adversely impact our ability to fund the improvements necessary to complete the project.

Under the EB-5 program, investor funds may be drawn from escrow prior to project approval by the USCIS. If the project is denied, investor funds must be returned within 60 days after conclusion of any appeal. Our collateral may be at risk if we are not able to raise sufficient capital within the repayment time period in the event of a project denial. We have submitted an application to the USCIS and State of California for approval of our Village 3 project at the Otay Land project under the EB-5 Program. Prior to project approval, funds may be drawn from the escrow account with a HomeFed guarantee that funds will be returned to the investor in the event the Village 3 project is not approved. In addition, all funds will be held in escrow until we have identified and provided collateral to secure the amount of funds drawn from escrow. To the extent the project is not approved, investors may seek recovery through possession of the collateral if repayment is not made within the cure period.

Item 2. Unregistered Sale of Equity Securities and Use of Proceeds.

(c) Issuer Purchases of Equity Securities

The following table presents information on our purchases of our common shares during the three months ended September 30, 2017:

	(a) Total number of Shares Purchased	(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs
July 1, 2017 to July 31, 2017	1,968	$	45.50	—	104,591
August 1, 2017 to August 31, 2017	—	$	—	—	104,591
September 1, 2017 to September 30, 2017	—	$	—	—	104,591
Total	1,968			—

(1) Includes an aggregate 1,968 shares repurchased other than as part of our publicly announced Board authorized repurchase program. We repurchased these securities in connection with our share compensation plans which allow participants to use shares to fund the exercise of stock options.

(2) In July 2004, the Board of Directors approved the repurchase of up to 500,000 shares of common stock.

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Item 6.             Exhibits.

See Exhibit Index.

EXHIBIT INDEX

Exhibit Number Description

4.1 Indenture, dated September 28, 2017, among the Company, the Guarantors party thereto from time to time and Wilmington Trust, National Association (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed October 2, 2017).

10.1 Placement Agency Agreement, dated September 27, 2017, among the Company, the Guarantors and Jefferies (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed October 2, 2017).

10.2 Form of Non-Affiliate Note Purchase Agreement, dated September 27, 2017, among the Company, the Guarantors and the Non-Affiliate Investors (incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed October 2, 2017).

10.3 Form of Affiliate Note Purchase Agreement, dated September 27, 2017, among the Company, the Guarantors and the Affiliate Investors (incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed October 2, 2017).

31.1    Certification of President pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2   Certification of Vice President, Treasurer and Controller pursuant to Section 302 of the Sarbanes- Oxley Act of 2002.

32.1   Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2    Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101     Financial statements from the Quarterly Report on Form 10-Q of HomeFed Corporation for the quarter ended September 30, 2017 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statements of Changes in Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements.

35

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	HOMEFED CORPORATION
	(Registrant)
Date:  November 3, 2017	By:	/s/ Erin N. Ruhe
		Erin N. Ruhe
		Vice President, Treasurer and Controller
		(Principal Accounting Officer)

36

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Paul J. Borden, certify that:

1. I have reviewed this quarterly report on Form 10-Q of HomeFed Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)        Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)        Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)        Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)        Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)         All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)        Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  November 3, 2017	By:	/s/ Paul J. Borden
		Paul J. Borden
		President

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Erin N. Ruhe, certify that:

1. I have reviewed this quarterly report on Form 10-Q of HomeFed Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)        Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)        Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)        Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)        Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)        All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)        Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  November 3, 2017	By:	/s/ Erin N. Ruhe
		Erin N. Ruhe
		Vice President, Treasurer and Controller

EX-32.1

Exhibit 32.1

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Paul J. Borden, as President of HomeFed Corporation (the "Company") certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the accompanying Form 10-Q report for the period ending September 30, 2017 as filed with the U.S. Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 3, 2017	By:	/s/ Paul J. Borden
		Paul J. Borden
		President

EX-32.2

Exhibit 32.2

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Erin N. Ruhe, as Vice President, Treasurer and Controller of HomeFed Corporation (the "Company") certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the accompanying Form 10-Q report for the period ending September 30, 2017 as filed with the U.S. Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 3, 2017	By:	/s/ Erin N. Ruhe
		Erin N. Ruhe
		Vice President, Treasurer and Controller

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Oct. 24, 2017
Document And Entity Information [Abstract]
Entity Registrant Name	HOMEFED CORP
Entity Central Index Key	0000833795
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding (in shares)		15,451,532

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
ASSETS
Real estate held for development	$ 310,705	$ 297,665
Real estate held for investment, net	38,315	42,536
Cash and cash equivalents	35,382	53,140
Restricted cash	2,642	2,672
Equity method investments	139,778	127,379
Accounts receivable, deposits and other assets	23,013	18,564
Intangible assets, net	3,660	5,634
Net deferred tax asset	40,944	34,742
TOTAL	594,439	582,332
LIABILITIES
Accounts payable and accrued liabilities	24,746	13,438
Below market lease contract intangibles, net	2,128	2,729
Non-refundable option payments	255	25
Liability for environmental remediation	1,452	1,455
Deferred revenue	1,441	4,311
Income taxes payable	0	1,338
Accrued interest payable	38	0
Other liabilities	2,389	5,778
Long-term debt, net	97,483	102,084
Total liabilities	129,932	131,158
COMMITMENTS AND CONTINGENCIES (Note 12)
EQUITY
Common stock, $.01 par value; 25,000,000 shares authorized; 15,451,532 and 15,448,500 shares outstanding after deducting 397,377 and 395,409 shares held in treasury	155	154
Additional paid-in capital	599,865	599,033
Accumulated deficit	(140,634)	(155,011)
Total HomeFed Corporation common shareholders' equity	459,386	444,176
Noncontrolling interest	5,121	6,998
Total equity	464,507	451,174
TOTAL	$ 594,439	$ 582,332

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Common stock, par value (USD per share)	$ 0.01	$ 0.01
Common shares, authorized (in shares)	25,000,000	25,000,000
Common shares, shares outstanding (in shares)	15,451,532	15,448,500
Treasury stock, shares (in shares)	397,377	395,409

XML

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
REVENUES
Sales of real estate	$ 7,980	$ 2,757	$ 43,108	$ 37,805
Rental income	5,877	5,812	18,166	17,518
Farming revenues	3,411	4,427	3,411	4,427
Co-op Marketing and advertising fees	157	194	394	504
Total revenue	17,425	13,190	65,079	60,254
EXPENSES
Cost of sales	7,609	1,442	38,359	26,236
Rental operating expenses	4,422	4,336	12,641	12,994
Farming expenses	1,179	1,165	3,104	3,105
General and administrative expenses	4,533	3,789	12,601	10,627
Depreciation and amortization	927	941	2,779	2,919
Administrative services fees to Leucadia National Corporation	45	45	135	135
Total expenses	18,715	11,718	69,619	56,016
Income (loss) from operations before income (losses) from equity method investment	(1,290)	1,472	(4,540)	4,238
Equity earnings (losses) of equity method investments	2,278	(292)	6,688	(1,629)
Income from operations	988	1,180	2,148	2,609
Interest and other income	102	394	295	2,710
Income before income taxes and noncontrolling interest	1,090	1,574	2,443	5,319
Income tax (provision) benefit	(619)	(364)	12,007	30,174
Net income	471	1,210	14,450	35,493
Net (income) loss attributable to the noncontrolling interest	(1)	30	(73)	45
Net income attributable to HomeFed Corporation common shareholders	$ 470	$ 1,240	$ 14,377	$ 35,538
Basic and diluted earnings per common share attributable to HomeFed Corporation common shareholders (in dollars per share)	$ 0.03	$ 0.08	$ 0.93	$ 2.30

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Consolidated Statements of Changes In Equity - USD ($) $ in Thousands	Total	Common Stock $.01 Par Value	Additional Paid-In Capital	Accumulated Deficit	Subtotal	Noncontrolling Interest
Beginning balance at Dec. 31, 2015	$ 416,400	$ 154	$ 597,922	$ (191,695)	$ 406,381	$ 10,019
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	35,493			35,538	35,538	(45)
Distributions to noncontrolling interests	(3,300)					(3,300)
Exercise of options to purchase common shares, including excess tax benefit	1,036		1,036		1,036
Share-based compensation expense	55		55		55
Ending balance at Sep. 30, 2016	449,684	154	599,013	(156,157)	443,010	6,674
Beginning balance at Dec. 31, 2016	451,174	154	599,033	(155,011)	444,176	6,998
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	14,450			14,377	14,377	73
Distributions to noncontrolling interests	(1,950)					(1,950)
Exercise of options to purchase common shares, including excess tax benefit	23	1	22		23
Share-based compensation expense	810		810		810
Ending balance at Sep. 30, 2017	$ 464,507	$ 155	$ 599,865	$ (140,634)	$ 459,386	$ 5,121

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 14,450	$ 35,493
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
(Income) losses from equity method investments	(6,688)	1,629
Benefit for deferred income taxes	(6,202)	(31,937)
Share-based compensation expense	1,218	55
Excess tax benefit from exercise of options	0	(25)
Depreciation and amortization of property, equipment and leasehold improvements	384	383
Other amortization	3,380	3,536
Amortization related to issuance costs and debt discount of Senior Notes	0	886
Amortization related to investments	0	(821)
Loss on extinguishment of debt	331	0
Changes in operating assets and liabilities:
Real estate, held for development	(5,210)	(2,420)
Real estate, held for investment	3,182	(323)
Restricted cash related to development activities	30	3,758
Accounts receivable, deposits and other assets	(2,983)	(4,864)
Deferred revenue	(2,870)	(1,266)
Accrued interest payable	38	1,893
Non-refundable option payments	230	0
Accounts payable and accrued liabilities	1,028	812
Liability for environmental remediation	(3)	(15)
Income taxes payable	(4,646)	(2,679)
Other liabilities	(3,797)	148
Net cash provided by (used for) operating activities	(8,128)	4,243
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in equity method investments	(25,711)	(10,270)
Capital distributions from equity method investments	20,000	0
Net cash used for investing activities	(5,711)	(10,270)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of long-term debt	100,000	0
Payment of debt issuance costs	(797)	(586)
Distributions to noncontrolling interests	0	(3,300)
Reduction of debt	(103,145)	(1,243)
Exercise of options to purchase common shares	23	1,011
Excess tax benefit from exercise of stock options	0	25
Net cash used for financing activities	(3,919)	(4,093)
Net decrease in cash and cash equivalents	(17,758)	(10,120)
Cash and cash equivalents, beginning of period	53,140	66,676
Cash and cash equivalents, end of period	35,382	56,556
Supplemental disclosures of cash flow information:
Cash paid for income taxes, net of tax refunds	3,513	4,974
Cash paid for interest (net of amounts capitalized)	0	0
Non-cash operating activities:
Project development costs incurred that remain payable at end of period	15,398	8,448
Non-cash investing activities:
Land contributed as an investment in Village III Master	0	15,150
Non-cash financing activities:
Dividends declared but not paid yet	1,950	0
Debt issuance costs incurred but not paid yet	$ 1,350	$ 0

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Accounting Developments

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Accounting Developments

Accounting Developments

The unaudited interim consolidated financial statements, which reflect all adjustments (consisting of normal recurring items or items discussed herein) that management believes necessary to fairly state results of interim operations, should be read in conjunction with the Notes to Consolidated Financial Statements (including the Summary of Significant Accounting Policies) included in our audited consolidated financial statements for the year ended December 31, 2016, which are included in our Annual Report filed on Form 10-K for such year (the “2016 10-K”).  Results of operations for interim periods are not necessarily indicative of annual results of operations.  The consolidated balance sheet at December 31, 2016 was extracted from the audited annual consolidated financial statements and does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for annual financial statements.

There is no other comprehensive income for the three and nine months ended September 30, 2017 and 2016.

Accounting Developments- Accounting Standards to be Adopted in Future Periods

In May 2014, the Financial Accounting Standards Board (“FASB”) issued new guidance that defines how companies report revenues from contracts with customers, and also requires enhanced disclosures.  The core principle of this new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.  This guidance is effective for interim and annual periods beginning after December 15, 2017. We intend to adopt the new guidance with a cumulative-effect adjustment to opening retained earnings. Our impact of the evaluation of the new guidance is ongoing. We are currently evaluating our revenue streams and contracts with customers within each revenue stream. We have evaluated our contracts with our customers related to our farm revenues and do not expect this guidance will have a material impact on our grape revenues and may have a timing impact on when we recognize almond revenues but is not anticipated to be material. We expect that this guidance may impact the timing of revenue recognition related to certain of our land sales, home sales, profit participation agreements, and co-op marketing fees.

In January 2016, the FASB issued new guidance that affects the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. The guidance is effective for annual and interim periods beginning after December 15, 2017. We are currently evaluating the impact of the new guidance related to equity investments and the presentation and disclosure requirements of financial instruments on our consolidated financial statements.

In February 2016, the FASB issued new guidance that affects the accounting and disclosure requirements for leases.  The new guidance requires a lessee to recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term, along with additional qualitative and quantitative disclosures. Lessor accounting will remain substantially similar to current accounting guidance for leases.  However, leasing costs that are currently eligible to be capitalized as initial direct costs will be immediately expensed under the new guidance.  The guidance is effective for annual and interim periods beginning after December 15, 2018. We are currently evaluating the impact this new guidance will have on our consolidated financial statements.

In August 2016, the FASB issued new guidance to reduce the diversity in practice in how certain transactions are classified in the statement of cash flows. The guidance adds or clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows. The guidance is effective for annual and interim periods beginning after December 15, 2017. In November 2016, the FASB issued new guidance on restricted cash. The guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. The guidance is effective for annual and interim periods beginning after December 15, 2017. We have evaluated the new guidance and believe it will not have a material effect on our consolidated financial statements.

In May 2017, the FASB issued new guidance providing clarity and reducing diversity in practice and cost and complexity when accounting for a change to the terms or conditions of a share-based payment award. The guidance is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted. We have evaluated the new guidance and believe it will not have a material effect on our consolidated financial statements.

Accounting Developments- Adopted Accounting Standards

Beginning January 1, 2017, we adopted the FASB's new guidance that simplifies and improves accounting for share-based payments. The amendments include the recognition of all excess tax benefits and tax deficiencies as income tax expense or benefit in the statement of operations and changes to the timing of recognition of excess tax benefits, the accounting for forfeitures and classification of awards as either equity or liabilities and classification on the statement of cash flows. The adoption of this guidance did not have a significant impact on our consolidated financial statements. We elected to account for forfeitures as they occur.

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Intangibles, Net

9 Months Ended

Sep. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Intangibles, Net

Intangibles, Net

As more fully discussed in the Annual Report on Form 10-K for the year ended December 31, 2014, intangible assets include above market leases and leases in place and intangible liabilities include below market leases which were recorded at fair value when we acquired substantially all of the real estate properties and operations of Leucadia National Corporation ("Leucadia"), the membership interests in Brooklyn Renaissance Plaza ("BRP Holding") and Brooklyn Renaissance Hotel LLC ("BRP Hotel") and cash in exchange for 7.5 million of our common shares (the "Acquisition") during 2014.

A summary of intangible assets is as follows (in thousands):

	September 30, 2017		December 31, 2016		Amortization (in years)
Above market lease contracts, net of accumulated amortization of $8,305 and $6,719	$	2,569	$	4,155	1 to 24
Lease in place value, net of accumulated amortization of $2,994 and $2,606	1,091		1,479		1 to 24
Intangible assets, net	$	3,660	$	5,634
Below market lease contracts, net of accumulated amortization of $3,460 and $2,859	$	2,128	$	2,729	1 to 24

The amortization of above and below market lease contracts is recognized in Rental income.  Above market lease values are amortized over the remaining terms of the underlying leases, and below market lease values are amortized over the initial terms plus the terms of any below market renewal options of the underlying leases.  The estimated future amortization expense recognized in Rental income for the above market lease intangible assets is as follows: remainder of 2017 - $550,000; 2018 - $1,700,000; 2019 - $50,000; 2020 - $50,000; 2021 - $50,000 and thereafter - $200,000. The estimated future negative amortization expense recognized in Rental income for the below market lease intangible assets is as follows: remainder of 2017 - $(200,000); 2018 - $(550,000); 2019 - $(200,000); 2020 - $(200,000); 2021 - $(200,000) and thereafter - $(750,000).

The lease in place intangible is reflected in Depreciation and amortization expenses and amortized over the life of the related lease.  The estimated future amortization expense for the lease in place intangible asset for each of the next five years is as follows: remainder of 2017 - $100,000; 2018 - $300,000; 2019 - $100,000; 2020 - $100,000; 2021 - $100,000 and thereafter - $400,000. Amortization expense on lease in place intangible assets was $100,000 and $150,000 for the three months ended September 30, 2017 and 2016, respectively, and was $400,000 and $450,000 for the nine months ended September 30, 2017 and 2016, respectively.

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Equity Method Investments

9 Months Ended

Sep. 30, 2017

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments

Equity Method Investments

Otay project:

In April 2016, through a HomeFed subsidiary, we formed a limited liability company, HomeFed Village III Master, LLC (“Village III Master”), to own and develop an approximate 450 acre community planned for 992 homes in the Otay Ranch General Plan Area of Chula Vista, California. We entered into an operating agreement with three builders as members of Village III Master to build and sell 948 homes within the community.  We made an initial non-cash capital contribution of $20,000,000 which represents the fair market value of the land we contributed to Village III Master after considering proceeds of $30,000,000 we received from the builders at closing, which represents the value of their capital contributions. The historical book value of the land we contributed to Village III Master is $15,150,000, which represents a basis difference of $4,850,000. The basis difference will be amortized as additional income for us as future real estate sales occur.

In January 2017, we recorded the final map that subdivided the approximately 450 acre parcel of land in the Otay Ranch General Plan Area of Chula Vista, California, which is now known as the community of Village of Escaya. We formed three limited liability companies (each, a "Builder LLC") to own and develop 948 homes within Village of Escaya and entered into individual operating agreements with each of the three builders as members of each Builder LLC. Upon admittance of the three builders into their respective Builder LLC, each of the three builders withdrew as members of Village III Master, which is now a wholly owned subsidiary of HomeFed Corporation. On January 5, 2017, we made an aggregate capital contribution valued at $33,200,000 to the three Builder LLCs, representing land and completed improvement value. In addition to the $30,000,000 contribution made by the builders, as mentioned above, and $2,250,000 of capitalizable land improvements made by the builders, the builders then made an additional cash contribution of $20,000,000 in January 2017 upon final map subdivision and entry into their respective Builder LLCs, which was used to fund infrastructure costs completed by us.

Although each of the three Builder LLCs is considered a variable interest entity, we do not consolidate any of them since we are not deemed to be the primary beneficiary as we share joint control with each Builder LLC through a management committee and we lack authority over establishing home sales prices and accepting offers. However, since two of our executive officers are members of the four-member management committee at each Builder LLC, designated to consider major decisions for that Builder LLC, we account for each Builder LLC under the equity method of accounting. Our share of the income earned from the sales of built homes in any of the three Builder LLCs will be recorded as income from equity method investments.

Our maximum exposure to loss is limited to our equity commitment in each Builder LLC and any cost overruns as described below. We are responsible for the remaining cost of developing the community infrastructure, for which we have received credit to date as a capital contribution, with funding guaranteed by us under the respective operating agreements and for the marketing costs of the Village of Escaya. Credit for capital contributions related to our infrastructure improvements is limited to $78,600,000, and we are responsible for any costs in excess of this limit to complete the community infrastructure. The builders are responsible for the remaining construction and the selling of the 948 homes with funding guaranteed by their respective parent entities.

We are contractually obligated to obtain infrastructure improvement bonds on behalf of each Builder LLC. See Note 12 for more information.

Summarized financial information for our interest in the three Builder LLCs (in thousands):

	Financial Statement Carrying Amounts
					VIE
September 30, 2017	Assets		Liabilities		Assets
Builder LLCs	$	33,724	$	—	$	125,143

Brooklyn Renaissance Plaza and Hotel:

We own a 61.25% membership interest in BRP Holding. Although we have a majority interest, we concluded that we do not have control but only have the ability to exercise significant influence on this investment.  As such, we account for BRP Holding under the equity method of accounting.  We also own a 25.8% membership interest in BRP Hotel, which we account for under the equity method of accounting.

Under the equity method of accounting, our share of the investee’s underlying net income or loss is recorded as income (loss) from equity method investments.  The recognition of our share of the investees’ results takes into account any special rights or priorities of investors; accordingly, we employ the hypothetical liquidation at book value model to calculate our share of the investees’ profits or losses.

Summarized financial information:

At September 30, 2017 and December 31, 2016, our equity method investments are comprised of the following (in thousands):

	September 30,		December 31,
	2017		2016
BRP Holding	$	83,358	$	74,972
BRP Hotel	22,696		24,020
Village III Master	—		28,387
Builder LLCs	33,724		—
Total	$	139,778	$	127,379

Income (losses) from equity method investments includes the following for the three and nine months ended September 30, 2017 and 2016 (in thousands):

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
BRP Holding	$	2,921		$	(186	)	$	8,386		$	(591	)
BRP Hotel	(343		)	(106		)	(1,324		)	(1,038		)
Builder LLCs	(300		)	—			(374		)	—
Total	$	2,278		$	(292	)	$	6,688		$	(1,629	)

The following table provides summarized data with respect to our significant equity method investments in BRP Holding and BRP Hotel for the nine months ended September 30, 2017 and 2016 (in thousands):

	For the Nine Months Ended September 30,
	2017		2016
Total revenues	$	90,267	$	70,718
Income from continuing operations before extraordinary items	16,160		1,228
Net income	16,160		1,228
Equity earnings (losses) of equity method investments	7,062		(1,629		)

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Debt

9 Months Ended

Sep. 30, 2017

Debt Disclosure [Abstract]

Debt

Debt

Lines of Credit:

In April 2015, we entered into a $15,000,000 revolving line of credit agreement.  Loans outstanding under this line of credit bear interest at monthly LIBOR plus 2.6% and are secured by the Rampage property. The draw period expires on January 1, 2021, and the loan matures on January 1, 2035.  There is also a $3,000,000 operational line of credit available which is secured by the Rampage property’s crops and matures on January 1, 2018.  As of October 24, 2017, no amounts have been drawn under either line of credit.

Senior Notes:

On June 30, 2015, we issued $125,000,000 principal amount of 6.5% Senior Notes due 2018 (the “Old Notes”) in a private placement. The Old Notes were fully and unconditionally guaranteed by our wholly-owned domestic subsidiaries and any of our future domestic wholly-owned subsidiaries, and matured on June 30, 2018. The Old Notes were senior unsecured obligations and the guarantees are the senior unsecured obligations of the Guarantors.

In addition, we were required to use the net proceeds of certain asset sales to offer to purchase the Old Notes at a price equal to 100% of the aggregate principal amount outstanding plus accrued and unpaid interest as of the date fixed for the closing of such asset sale offer. Accordingly, we made the following repurchases:

Date of Repurchase	Principal Repurchased	Approximate Interest Payment Associated with Repurchase
December 15, 2016	$4,162,000	$120,000
November 15, 2016	$9,176,000	$220,000
September 27, 2016	$625,000	$10,000
January 28, 2016	$618,000	$3,000
October 20, 2015	$7,274,000	$146,000

On September 27, 2017, we and certain of our domestic wholly-owned subsidiaries as guarantors (the “Guarantors”) entered into purchase agreements (collectively, the “Purchase Agreements”) with certain investors named therein (the “Purchasers”) pursuant to which we agreed to issue to the Purchasers an aggregate of $75,000,000 of 6.5% Senior Notes due 2019 (the “New Notes”) in a private placement. Pursuant to the terms of the Purchase Agreements, the purchase price for the New Notes was 100% of the principal amount. Pursuant to the Placement Agency Agreement, Jefferies LLC (“Jefferies”), a wholly-owned subsidiary of Leucadia, received a fee of $100,000 for acting as the placement agent and the closing agent.

On September 28, 2017, we used proceeds of the New Notes, as described below, together with cash on hand, to redeem all of the outstanding Old Notes. After considering the repurchases and redemption, there is no remaining principal due under the Notes as of September 30, 2017. In connection with the extinguishment of the Notes, issuance costs of approximately $350,000 were recorded as an expense.

The New Notes were issued on September 28, 2017 (“Issue Date”), pursuant to an indenture among us, the Guarantors and Wilmington Trust, N.A., as trustee (“Indenture”), containing such terms as set forth below. The New Notes mature on October 1, 2019 and are fully and unconditionally guaranteed by the Guarantors on the terms provided in the Indenture. Interest on the New Notes accrues at a rate of 6.50% per annum and is payable semi-annually in arrears on April 1 and October 1, commencing April 1, 2018. The New Notes are senior unsecured obligations of the Company and the guarantees are the senior unsecured obligations of the Guarantors.

At September 30, 2017, the New Notes had a $75,000,000 principal amount outstanding, and there was no principal amount outstanding on the Old Notes.

We may not redeem or repurchase the New Notes prior to April 1, 2018 after which time, we may redeem the New Notes, in whole or in part, at any time or in part from time to time at a redemption price equal to 100% of the principal amount of the New Notes plus accrued and unpaid interest, if any, to, but not including, the date of redemption.

Upon the occurrence of a Change of Control (as defined in the Indenture) after the Issue Date, to the extent the New Notes were not otherwise redeemed, we must make an offer to purchase all of the outstanding New Notes at a price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase, in each case, as provided in, and subject to the terms of, the Indenture. Pursuant to the Indenture, we will use the net proceeds of certain asset sales to offer to purchase the New Notes at a price equal to 100% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase.

The Indenture contains covenants that, among other things, limit our and certain of our subsidiaries’ ability to incur, issue, assume or guarantee certain indebtedness subject to exceptions (including allowing us to borrow up to $15,000,000 under our Rampage Vineyard revolving facility, another $70,000,000 of indebtedness collateralized by our other assets, and up to $65,000,000 under a construction loan secured by our Village of Escaya mixed use apartment project), issue shares of disqualified or preferred stock, pay dividends on equity, buy back our common shares outside of existing stock compensation plan arrangements, or consummate certain asset sales or affiliate transactions. The Indenture also permits certain financing transactions in connection with the EB-5 Program, as defined below, for the project involving infrastructure improvements at the Village of Escaya subject to certain restrictions and limitation as set forth in the Indenture. Additionally, certain customary events of default may result in an acceleration of the maturity of the New Notes.

EB-5 Program:

We intend to fund our Village of Escaya project (“Village 3”or the “Project”) in part by raising funds under the Immigrant Investor Program administered by the U.S. Citizenship and Immigration Services ("USCIS") pursuant to the Immigration and Nationality Act ("EB-5 Program"). This program was created to stimulate the U.S. economy through the creation of jobs and capital investments in U.S. companies by foreign investors. The program allocates a limited number of immigrant visas per year to qualified individuals seeking lawful permanent resident status on the basis of their investment in a U.S. commercial enterprise. Regional centers are organizations, either publicly owned by cities, states or regional development agencies or privately owned, which facilitate investment in job-creating economic development projects by pooling capital raised under the EB-5 Program. Geographic areas within regional centers that are rural areas or areas experiencing unemployment numbers higher than the national unemployment average rates are designated as Targeted Employment Areas (“TEA”). The EB-5 program is set to expire on December 8, 2017 but is expected to be extended. Various reforms and bills have been proposed and will be considered by Congress in the coming months.

In February 2017, we formed Otay Village III Lender, LLC, which is intended to serve as a new commercial enterprise (“NCE”) under the EB-5 Program. The NCE is managed by Otay Village III Manager, LLC, a wholly owned subsidiary of HomeFed. The NCE is seeking to raise up to $125,000,000 by offering up to 250 units in the NCE to qualified accredited EB-5 investors for a subscription price of $500,000 per unit, which is the minimum investment that an investor in a TEA project is required to make pursuant to EB-5 Program rules. The proceeds of the offering will be used to repay any outstanding bridge loan provided by HomeFed to its wholly owned subsidiary HomeFed Village III LLC, a job creating entity under the EB-5 Program, and to fund infrastructure costs related to the development of Village 3.

The NCE has offered the units to investors primarily located in China, Vietnam, and South Korea either directly or through relationships with agents qualified in their respective countries, in which case the NCE will pay an agent fee. Once an investor’s subscription and funds are accepted by the NCE, the investor must file an I-526 petition with the USCIS seeking approval of the investment’s suitability under the EB-5 Program requirements and the investor’s suitability and source of funds. All investments are held in an escrow account and will not be released until the investor files their I-526 petition with the USCIS and we have identified and provided collateral to secure the amount of the funds drawn from escrow. The Village 3 project must be approved by the USCIS under the EB-5 Program rules. Prior to approval by the USCIS, funds may be drawn from the escrow account with a HomeFed guarantee that funds will be returned in the event the Village 3 project is not approved. On September 18, 2017, $25,000,000 was drawn from escrow related to EB-5 financing to fund infrastructure costs related to the development of the Project. The drawn funds are guaranteed by us until the project is approved by the USCIS and are collateralized by certain Otay Village property. The loan term is five years with twoone-year options to extend by us with principal due in full at maturity. The effective interest rate is approximately 3.5%, payable as certain milestones are achieved according to various agreements with agents and investors.

As of October 24, 2017, we have $24,900,000 in escrow which is subject to approval by the USCIS and cannot be drawn until certain provisions (such as filing of Investor I-526, investor suitability and source of funds) are satisfied.

At September 30, 2017, we are in compliance with all debt covenants.

Real estate held for development includes capitalized interest, including amortization of issuance costs and debt discount, of $5,900,000 and $6,600,000 for the nine months ended September 30, 2017 and 2016, respectively.

The New Notes and EB-5 Program financing are presented on the Balance Sheet net of aggregate issuance costs of $2,350,000 and $550,000 and debt discount of $150,000 and $500,000 at September 30, 2017 and December 31, 2016, respectively.

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Income Taxes

9 Months Ended

Sep. 30, 2017

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

During the nine months ended September 30, 2017, we effectively settled our 2014 federal tax examination with the IRS and, as a result, recorded an $8,600,000 reduction to deferred tax liabilities and a $4,600,000 reduction to unrecognized tax benefits.  The statute of limitations with respect to the Company’s federal income tax returns has expired for all years through 2013, and with respect to California state income tax returns through 2011.  We are currently under examination by the City of New York for the year ended 2014.  We do not expect that resolution of this examination will have a significant effect on our consolidated financial position, but it could have a significant impact on the consolidated results of operations for the period in which resolution occurs.

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Earnings Per Common Share

9 Months Ended

Sep. 30, 2017

Earnings Per Share [Abstract]

Earnings Per Common Share

Earnings Per Common Share

Basic and diluted earnings per share amounts were calculated by dividing net income by the weighted average number of common shares outstanding. The numerators and denominators used to calculate basic and diluted earnings per share for the three and nine months ended September 30, 2017 and 2016 are as follows (in thousands):

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2017		2016		2017		2016
Numerator – net income attributable to HomeFed Corporation common shareholders	$	470	$	1,240	$	14,377	$	35,538
Denominator for basic earnings per share– weighted average shares	15,451		15,448		15,449		15,431
Restricted stock units	45		—		32		—
Stock options	3		4		4		12
Denominator for diluted earnings per share– weighted average shares	15,499		15,452		15,485		15,443

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Fair Value Information

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Fair Value Information

Fair Value Information

The carrying amounts and estimated fair values of our principal financial instruments that are not recognized on a recurring basis are as follows (in thousands):

	September 30, 2017				December 31, 2016
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial Liabilities:
Long-term debt (a)	$	74,386	$	74,944	$	102,084	$	103,274
Long-term debt: EB-5	23,097		25,000		—		—

(a) The fair value of the New Notes was determined by utilizing available market data inputs that are considered level 2 inputs.  Quoted prices are available but trading is infrequent.  We utilized the available market data based on the quoted market prices to determine an average fair market value over the last 10 business days of the reporting period.

For cash and cash equivalents, the carrying amounts of such financial instruments approximate their fair values.  We did not invest in any derivatives or engage in any hedging activities.

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Related Party Transactions

9 Months Ended

Sep. 30, 2017

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

On March 23, 2017, Ian M. Cumming resigned from the Board of Directors. To fill the vacancy, on March 28, 2017, the Board of Directors elected Jimmy Hallac, who is a Managing Director for Leucadia. Leucadia executives now hold three of the seven board of director positions. Our Chairman, Joseph S. Steinberg, is a significant stockholder of Leucadia and Chairman of Leucadia’s board, and one of our Directors, Brian P. Friedman, is the President and a director of Leucadia.

Prior to Mr. Cumming's resignation, he sold 783,889 of our shares for $31,300,000 to Leucadia in a privately negotiated transaction during March 2017. Mr. Cumming was considered to be a “Related Person” under our related person transactions policy (the “Policy”) at the time of the sale.  Accordingly, the independent Audit Committee of the Board (the “Audit Committee”) considered the transaction and recommended to the Board the approval of the sales transaction, which was unanimously approved by the Board (with Mr. Cumming abstaining from the vote).

In 2015, Mr. Steinberg, the chairman of our Board of Directors, entered into a Purchase Agreement with us and our wholly-owned subsidiaries, as guarantors, pursuant to which he purchased Notes with a value of $5 million, or 4%, of the principal amount of the Notes issued, which were fully redeemed on September 28, 2017 on the same terms as other redemptions.

On September 27, 2017, Mr. Steinberg entered into a Purchase Agreement with us and our wholly-owned subsidiaries, as guarantors, pursuant to which he purchased New Notes with a value of $7 million, or 9.3%, of the principal amount of the New Notes issued (such purchases and redemptioms, the “Affiliate Note Transactions”). Mr. Steinberg is considered to be a Related Person under our Policy. Accordingly, the Audit Committee considered the Affiliate Note Transactions and approved, and recommended to the Board the approval of, the Affiliate Note Purchases, which were unanimously approved by the Board (with Mr. Steinberg abstaining from the vote).

Pursuant to Placement Agency Agreements, Jefferies acted as Placement Agent for the Notes and for the New Notes. Jefferies is a wholly-owned subsidiary of Jefferies Group LLC, a wholly owned subsidiary of Leucadia. Leucadia is our affiliate and a Related Person under the Policy. Accordingly, pursuant to and in accordance with the Policy, the Audit Committee considered the Placement Agency Agreements and approved, and recommended to the Board the approval of, the Placement Agency Agreements, which were unanimously approved by the Board (with Mr. Friedman, Chairman of the Executive Committee of Jefferies Group LLC, Mr. Steinberg and Mr. Hallac abstaining from the vote). Pursuant to the Placement Agency Agreements for the Notes, Jefferies received a fee equal to 50 basis points from the gross proceeds of the offering, received a fee equal to 50 basis points of the outstanding balance of the Notes on the first anniversary of the issue date and received a fee equal to 50 basis points of the outstanding balance on the second anniversary of the issue date. Pursuant to the Placement Agency Agreements for the New Notes, Jefferies received a fee of $100,000. Additionally, we and each of the guarantors has agreed to indemnify Jefferies against certain liabilities, including liabilities under the Securities Act, and to reimburse Jefferies all reasonable out-of-pocket expenses incurred in connection with any action or claim for which indemnification has or is reasonably likely to be sought by Jefferies.

Builder LLCs:

Two of our executive officers are members of the four-member management committee at each Builder LLC and are designated to consider major decisions for each of the three Builder LLCs. Each Builder LLC appointed two members to the management committee, which is controlled jointly by us and the respective builder. HomeFed is contractually obligated to obtain infrastructure improvement bonds on behalf of the Builder LLCs. See Note 12 for more information. HomeFed may also be responsible for the funding of the real estate improvement costs for the infrastructure of the development if our subsidiary that invested in each Builder LLC fails to do so.

Brooklyn Renaissance Plaza:

As more fully discussed in the 2016 10-K, BRP Leasing holds a master lease at BRP Holding and subleases the office space to multiple tenants.  Future minimum annual rental expense (exclusive of real estate taxes, maintenance and certain other charges) that BRP Leasing is obligated to pay to BRP Holding for office space is as follows at September 30, 2017 (in thousands):

Remainder of 2017	$	1,890
2018	6,301
	$	8,191

In the aggregate, substantially all of the office space has been sublet for amounts in excess of BRP Leasing’s contractual commitment in the underlying lease.

Leucadia:

During the third quarter of 2017, certain of our executive officers and a director sold an aggregate 14,008 shares of our stock from their personal holdings to Leucadia in private transactions at an agreed upon price of $43.00 per share. The transaction was approved by our Audit Committee in accordance with our Related Party Transaction Policy taking into consideration that Leucadia is our majority shareholder, among other factors.

Pursuant to an administrative services agreement, Leucadia provides us certain administrative and accounting services, including providing the services of our Secretary.  Administrative services fee expenses were $45,000 and $135,000 for each of the three and nine months ended September 30, 2017 and 2016, respectively.  The administrative services agreement automatically renews for successive annual periods unless terminated in accordance with its terms.  We sublease office space to Leucadia under a sublease agreement until October 2018.  Amounts reflected in other income pursuant to this agreement were $3,000 for each of the three months ended September 30, 2017 and 2016 and $9,000 for each of the nine months ended September 30, 2017 and 2016.

Leucadia is contractually obligated to obtain infrastructure improvement bonds on behalf of the San Elijo Hills project. See Note 12 for more information.

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Interest And Other Income

9 Months Ended

Sep. 30, 2017

Other Income and Expenses [Abstract]

Interest and Other Income

Interest and Other Income

Interest income was not significant for the three months ended September 30, 2017 and was $300,000 for the three months ended September 30,2016 and was $25,000 and $850,000 for the nine months ended September 30, 2017 and 2016, respectively.

During the nine months ended September 30, 2016, our subsidiary at the SweetBay project received $550,000 related to the settlement of a claim against British Petroleum ("BP") arising from the damages caused by the Deepwater Horizon incident in April 2010 and the resulting BP oil spill in the Gulf of Mexico and recognized this amount as other income. For the nine months ended September 30, 2016, interest and other income includes a $1,000,000 recovery in January 2016 from the judgment against certain defendants in the Flat Rock litigation. See Note 12 for more information on this legal matter.

Other income also includes service income related to a utility bundling service agreement with the homeowners at the Ashville Park project.  Income of $90,000 and $75,000 was recognized during the three months ended September 30, 2017 and 2016, respectively, and $260,000 and $225,000 was recognized during the nine months ended September 30, 2017 and 2016, respectively.

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Real Estate Sales Activity

9 Months Ended

Sep. 30, 2017

Real Estate Sales Activity [Abstract]

Real Estate Sales Activity

Real Estate Sales Activity

Otay Land project:

In April 2016, through a HomeFed subsidiary as the managing member, we formed a limited liability company (the “LLC”) to own and develop an approximate 450 acre community in the Otay Ranch General Plan Area of Chula Vista, California and entered into an operating agreement with three builders as members of the LLC.  As a result of contributing land to the LLC, we received $30,000,000 from the builders at closing which was recognized as revenue from sales of real estate for the three and nine months ended September 30, 2016. Our share of the income earned from the sales of built homes by the LLC will be recorded as income from equity method investments. For more details on this transaction, please refer to Note 3.

There were no sales at the Otay Land project during the three and nine month periods ended September 30,2017. 

San Elijo Hills project:

The 48,800 square feet of commercial space in phase one and two of the Towncenter and the 12 multi-family units in phase two were sold during the first quarter of 2017 to a local developer for a cash payment of $5,800,000.

The third phase of the Towncenter is a 2.5 acre parcel of land, formerly designated as a church site. The third phase of the Towncenter is under contract with a local developer for a cash payment of $600,000 plus $100,000 per multi-family unit that the buyer is able to entitle, currently anticipated to be 12 multi-family units. We received a $230,000 non-refundable deposit during the third quarter of 2017 which will be applied to the sales price at time of closing. Closing of the third phase of the Towncenter is subject to entitlement approvals by the City of San Marcos and is expected to occur in the fourth quarter of 2017.

During June 2015, we entered into an agreement with a local San Diego based luxury homebuilder to construct and sell on our behalf, for a fee, up to 58 homes at the San Elijo Hills project.  We received a $500,000 deposit during the third quarter of 2015 which is reflected in Other liabilities.  This deposit is a builder performance deposit that will be fully refundable to the builder after the builder performs all of its requirements under the agreement. For the nine months ended September 30, 2017, we sold nine of these homes for $13,100,000. At time of closing, we recognized real estate revenues of $13,000,000 and cost of sales of $12,200,000 for the nine months ended September 30, 2017.

As of October 24, 2017, we have entered into agreements to sell 15 single family homes at the San Elijo Hills project under these agreements for aggregate cash proceeds of $21,500,000, which we expect to close during the fourth quarter of 2017 and first half of 2018.

There were no sales at the San Elijo Hills project during the three and nine month periods ended September 30,2016. 

Ashville Park project:

There were no sales at the Ashville Park project during the three and nine months ended September 30, 2017 and during the three months ended September 30, 2016. During the nine months ended September 30, 2016, we sold the former visitor center for net cash proceeds of $550,000 which generated a gross profit of $250,000. The entitlement effort to re-plan Villages C, D and E is currently impacted by a delay within the City of Virginia Beach (the "City"). In 2014 and 2016, severe storm events caused regional flooding and large portions of the City’s storm water management system did not perform as expected. In 2016, the City hired outside civil engineers to study the system and provide possible solutions. The study is now complete and reveals that significant improvements to the storm water management system within the City are needed. The impact of the study and related City storm water management system issues on the timing of our future development is uncertain.

The Market Common:

For the three and nine months ended September 30, 2017 and 2016, we closed on sales of real estate at The Market Common as follows:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
	Number of units sold	Cash Proceeds		Number of units sold	Cash Proceeds		Number of units sold	Cash Proceeds		Number of units sold	Cash Proceeds
Single family lots	8	$	400,000	10	$	450,000	30	$	1,380,000	32	$	1,500,000
Multi-family lots	7	180,000		—	—		15	380,000		10	250,000
Profit sharing agreements	N/A	200,000		N/A	500,000		N/A	950,000		N/A	1,150,000

As of October 24, 2017, we have entered into an agreement to sell 34 single family lots for $1,700,000 and 63 multi-family lots for $850,000 at The Market Common to a homebuilder.  A non-refundable option deposit of $25,000 was transferred from Leucadia to us as part of the Acquisition.

SweetBay project:

During May 2015, we signed an agreement with a local builder to construct and sell on our behalf, for a fee, up to 127 homes at the SweetBay project. We sold 21 and 53 single family homes for $6,900,000 and $18,550,000 during the three and nine months ended September 30, 2017, respectively. Cost of sales of real estate was $7,100,000 and $18,400,000 during the three and nine months ended September 30, 2017, respectively. The pre-tax loss for the three months ended September 30, 2017 is due to an increase in home building costs of approximately $100,000 on homes closed and includes a reserve for a potential loss of $100,000 that was recorded related to home sales under contract which are expected to close during the fourth quarter of 2017 and 2018. During the nine months ended September 30, 2016, we received $1,300,000 from the Florida Department of Transportation for the purchase of approximately seven acres of land at the SweetBay project to be used for the expansion of State Road 390.

As of October 24, 2017, we have entered into agreements to sell 26 single family homes at the SweetBay project under the local builder agreement for aggregate cash proceeds of $8,500,000 which are expected to close in the fourth quarter of 2017 and the first half of 2018.

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Real Estate Acquisitions

9 Months Ended

Sep. 30, 2017

Real Estate Acquisitions [Abstract]

Real Estate Acquisitions

Real Estate Acquisitions

During August 2015, we agreed to purchase 67 acres of land for $5,000,000 located adjacent to our Ashville Park project with the intention to entitle an additional 67 single family lots into the project.  We placed a $200,000 refundable deposit and submitted the plans to the City of Virginia Beach.  The purchase was contingent upon approval of the 67 lot entitlement by the City of Virginia Beach. We have terminated the transaction, and the refundable deposit was returned to us in August 2017.

In 2016, Pacific Gas & Electric ("PG&E"), an affiliate of the lessor of the Pacho Property in which we have a leasehold interest, began the process of decommissioning its Diablo Canyon Power Plant, which could take an undetermined period of time. The lessor has stated that it will not make any commitments on the disposition of certain lands, including the Pacho Property, until PG&E’s recommendations for decommissioning the Diablo Canyon Power Plant have been considered by the California Public Utility Commission as part of PG&E’s decommissioning plan. The time frame for completion of the review and approval of the decommissioning plan is uncertain. We are cooperating with PG&E during their public review process regarding disposition of the lands and are continuing to pursue fee title to the Pacho Property, which we acquired in the Acquisition and which is currently held for development as a leasehold interest with a book value of $17,750,000 as of September 30, 2017. If we are unable to obtain fee title to the property in a reasonable period of time, we may not develop the property and an impairment of the asset may be taken.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and contingencies

Commitments and Contingencies

In April 2016, the school at the SweetBay project refinanced its $5,500,000 loan for which we had pledged 42 acres of land as collateral.  The school increased the total loan to $8,100,000.  Additionally, we dedicated the school site land and building to the school and terminated their below market lease.  We were also released from our pledge of 42 acres of land as collateral.  We retained a repurchase right in the event the school defaults on their loan.  The loan is now only collateralized by the school cash flow and the real estate now owned by the school.

For real estate development projects, we are generally required to obtain infrastructure improvement bonds at the beginning of construction work and warranty bonds upon completion of such improvements.  These bonds are issued by surety companies to guarantee satisfactory completion of a project and provide funds primarily to a municipality in the event we are unable or unwilling to complete certain infrastructure improvements.  As we develop the planned area and the municipality accepts the improvements, the bonds are released.  Should the respective municipality or others draw on the bonds for any reason, certain of our subsidiaries would be obligated to pay. 

Specifically for the San Elijo Hills project, Leucadia is contractually obligated to obtain these bonds on behalf of the project pursuant to the terms of agreements entered into when the project was acquired by us.  We are responsible for paying all third party fees related to obtaining the bonds.

As of September 30, 2017, the amount of outstanding bonds for each project is as follows:

	Amount of outstanding bonds
Otay Land project		$49,500,000
San Elijo Hills project	1,550,000
Ashville Park project	800,000

The Market Common is required to provide a letter of credit for the benefit of the City of Myrtle Beach to secure the completion of certain infrastructure improvements in the amount of $1,250,000.  We placed $1,250,000 on deposit with a qualified financial institution to obtain the replacement letter of credit; such amount is reflected as restricted cash.

BRP Leasing holds a master lease at BRP Holding and subleases the office space to multiple tenants.  See Note 8 for information concerning BRP Leasing’s minimum annual rental expense. 

BRP Leasing is required to keep a minimum of $500,000 on deposit in an escrow account to secure its lease obligations.  At September 30, 2017, $1,400,000 was in the escrow account and is classified as restricted cash. 

A former subsidiary of Leucadia was the primary obligor under certain lease obligations to BRP Holding. In connection with Leucadia's earlier sale of that subsidiary to a third party, Leucadia assumed its lease obligations through another of its subsidiaries at that time, BRP Leasing. When HomeFed purchased BRP Leasing, we agreed to indemnify Leucadia for these obligations. The primary lease expires in 2018 and the aggregate amount of rental obligations was approximately $8,200,000 as of September 30, 2017, plus approximately $4,500,000 of projected operating expenses and taxes related to the real estate.  Substantially all of the space under the primary lease has been sublet to various third-party tenants for the full length of the lease term in amounts in excess of the obligations under the primary lease.

As more fully discussed in the Annual Report on Form 10-K for the year ended December 31, 2013, we completed environmental remediation activities on approximately 30 acres of undeveloped land owned by Flat Rock Land Company, LLC (“Flat Rock”), a subsidiary of Otay in February 2013, and received final approval of the remediation from the County of San Diego Department of Environmental Health in June 2013.

In 2014, Otay and Flat Rock commenced a lawsuit in California Superior Court seeking compensation from the parties who they believed were responsible for the contamination of the property. In February 2015, the trial court denied us any recovery and entered judgment in favor of the defendants as to all causes of action. In post-trial proceedings, the defendants sought, and the trial court allowed, reimbursement for court costs, of $350,000. Although our appeal of the judgment stayed the defendants’ right to collect court costs pending resolution of the appeal, we accrued $350,000 during the first quarter of 2016 as we believed at the time that such loss was probable and reasonably estimable. The defendants also sought, but were denied, recovery of attorney’s fees in the amount of approximately $13,500,000, which the defendants appealed.

On September 26, 2017, the Fourth District Court of Appeals (the “Appellate Court”) affirmed in part and reversed in part the judgment and remanded the matter to the trial court for further proceedings. The Appellate Court determined that Otay and Flat Rock were the prevailing parties and awarded their costs on appeal, the $350,000 cost award in favor of the defendants was reversed by operation of law, and the defendants’ appeal of the trial court’s denial of the defendants’ claim for attorneys’ fees was dismissed as being moot. The defendants’ requests for rehearing with the Appellate Court were summarily denied.

The decision of the Appellate Court became final on October 27, 2017. The defendants have until November 6, 2017 to file a petition for review with the California Supreme Court, which must be acted upon by the California Supreme Court within sixty (60) days (January 5, 2018). We believe it is unlikely the Supreme Court will grant review of the decision, and that the matter will be remanded to the Superior Court for further proceedings consistent with the Appellate Court’s decision. We have not reversed the accrual of the cost award. No assurances can be given as to the ultimate outcome of this matter.

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Share-based compensation

9 Months Ended

Sep. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based compensation

Share-Based Compensation

1999 Stock Incentive Plan:

On August 4, 2017, options to purchase an aggregate of 7,000 shares of Common Stock were granted to the members of the Board of Directors and 136,500 shares of Common Stock were granted to employees under our 1999 Stock Incentive Plan at an exercise price of $44.00 per share, the market price per share on the grant date. Options granted become exercisable in four equal instalments starting one year from date of grant and must be exercised within five years from date of grant and will be expensed equally over the four year vesting period. As of September 30, 2017, 255,400 shares are available under the 1999 Stock Incentive Plan.

2017 RSU Plan:

On August 4, 2017, the Board of Directors adopted an RSU Opportunity Plan (the “2017 RSU Plan”) under which 66,000 shares of Common Stock are authorized for issuance to our executive officers. The restricted stock units (“RSUs”) may be granted at the end of the performance period based on the degree to which performance criteria has been satisfied at the sole discretion of the Board of Directors. The performance period ends on December 31, 2019, and awards will be issued no later than April 1, 2020.

2014 RSU Plan:

On August 13, 2014, the Board of Directors adopted an RSU Opportunity Plan (the "2014 RSU Plan”) under which 100,000 shares of Common Stock are authorized for issuance under the 2014 RSU Plan to our executive officers. Participants were eligible for RSU awards based on satisfaction of performance criteria established by the Board of Directors in 2014. The performance period under the 2014 RSU Plan ended on December 31, 2016. The Board of Directors evaluated the participants' performance against the performance criteria and awarded an aggregate of 75,000 RSUs to the participants on March 15, 2017. Fifty percent of the RSU award under the 2014 RSU Plan will vest on December 31, 2017, and the remaining fifty percent will vest on December 31, 2018, provided that the executive officer has been continuously employed by the Company through the applicable vesting date.

The 2014 RSU grant consists of two settlement features: (1) 45,000 RSUs will be settled through the issuance of shares of Common Stock within 30 days of each vesting date; this component is classified as an equity award. The closing price on March 15, 2017 of $44.20 was used to value this component of the award. Stock compensation expense for this component of the award was $300,000 and $700,000, respectively, for the three and nine months ended September 30, 2017. (2) 30,000 RSUs will be settled in cash based on the average closing price over a period of ten trading days immediately preceding the date of declaration which must occur within thirty days of the respective vesting date. This component is classified as a liability award, which requires us to measure the fair value of the award at the end of each reporting period. Using a fair value approach, stock compensation expense for this component of the award was $200,000 and $400,000, respectively, for the three and nine months ended September 30, 2017.

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Segment Information

9 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

Segment Information

Segment Information

We have three reportable segments—real estate, farming and corporate.  Real estate operations consist of a variety of residential land development projects and commercial properties and other unimproved land, all in various stages of development. Real estate also includes the equity method investments in BRP Holding, BRP Hotel and the Builder LLCs in the Otay Land project. Farming operations consist of the Rampage property which includes an operating grape vineyard and an almond orchard under development. Corporate primarily consists of investment income and overhead expenses. Corporate amounts are not allocated to the operating units.

Farming revenues are generally recognized during the second half of the year when the crop is harvested and sold.

Certain information concerning our segments for the three and nine months ended September 30, 2017 and 2016 is presented in the following table.

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
	(in thousands)
Revenues:
Real estate	$	14,011		$	8,760		$	61,659		$	55,818
Farming	3,411			4,427			3,411			4,427
Corporate	3			3			9			9
Total consolidated revenues	$	17,425		$	13,190		$	65,079		$	60,254
Income (loss) from continuing operations before income taxes and noncontrolling interest:
Real estate	$	2,113		$	955		$	10,938		$	11,213
Farming	2,100			3,166			(59		)	1,050
Corporate	(3,123		)	(2,547		)	(8,436		)	(6,944		)
Total consolidated income (loss) from continuing operations before income taxes and noncontrolling interest	$	1,090		$	1,574		$	2,443		$	5,319
Depreciation and amortization expenses:
Real estate	$	817		$	858		$	2,488		$	2,695
Farming	95			71			247			189
Corporate	15			12			44			35
Total consolidated depreciation and amortization expenses	$	927		$	941		$	2,779		$	2,919
Identifiable assets employed:				September 30, 2017			December 31, 2016
Real estate				$	528,615		$	516,260
Farming				13,442			13,468
Corporate				52,382			52,604
Total consolidated assets				$	594,439		$	582,332

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Subsequent Event

9 Months Ended

Sep. 30, 2017

Subsequent Events [Abstract]

Subsequent Event

Subsequent events

During the third quarter of 2017, dividends of $13,000,000 were declared by our subsidiary that owns the San Elijo Hills project, of which $1,950,000 related to the noncontrolling interest. The dividends were paid during the fourth quarter of 2017. The dividends that will be retained by us will not increase the amount of consolidated liquidity reflected on our consolidated balance sheet; however, they will increase the liquidity of the parent Company.

In October 2017, we extended our 10,515 square feet lease at the Carlsbad, CA office through October 31, 2023.

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Accounting Developments (Policies)

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Accounting Developments

Accounting Developments- Accounting Standards to be Adopted in Future Periods

In May 2014, the Financial Accounting Standards Board (“FASB”) issued new guidance that defines how companies report revenues from contracts with customers, and also requires enhanced disclosures.  The core principle of this new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.  This guidance is effective for interim and annual periods beginning after December 15, 2017. We intend to adopt the new guidance with a cumulative-effect adjustment to opening retained earnings. Our impact of the evaluation of the new guidance is ongoing. We are currently evaluating our revenue streams and contracts with customers within each revenue stream. We have evaluated our contracts with our customers related to our farm revenues and do not expect this guidance will have a material impact on our grape revenues and may have a timing impact on when we recognize almond revenues but is not anticipated to be material. We expect that this guidance may impact the timing of revenue recognition related to certain of our land sales, home sales, profit participation agreements, and co-op marketing fees.

In January 2016, the FASB issued new guidance that affects the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. The guidance is effective for annual and interim periods beginning after December 15, 2017. We are currently evaluating the impact of the new guidance related to equity investments and the presentation and disclosure requirements of financial instruments on our consolidated financial statements.

In February 2016, the FASB issued new guidance that affects the accounting and disclosure requirements for leases.  The new guidance requires a lessee to recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term, along with additional qualitative and quantitative disclosures. Lessor accounting will remain substantially similar to current accounting guidance for leases.  However, leasing costs that are currently eligible to be capitalized as initial direct costs will be immediately expensed under the new guidance.  The guidance is effective for annual and interim periods beginning after December 15, 2018. We are currently evaluating the impact this new guidance will have on our consolidated financial statements.

In August 2016, the FASB issued new guidance to reduce the diversity in practice in how certain transactions are classified in the statement of cash flows. The guidance adds or clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows. The guidance is effective for annual and interim periods beginning after December 15, 2017. In November 2016, the FASB issued new guidance on restricted cash. The guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. The guidance is effective for annual and interim periods beginning after December 15, 2017. We have evaluated the new guidance and believe it will not have a material effect on our consolidated financial statements.

In May 2017, the FASB issued new guidance providing clarity and reducing diversity in practice and cost and complexity when accounting for a change to the terms or conditions of a share-based payment award. The guidance is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted. We have evaluated the new guidance and believe it will not have a material effect on our consolidated financial statements.

Accounting Developments- Adopted Accounting Standards

Beginning January 1, 2017, we adopted the FASB's new guidance that simplifies and improves accounting for share-based payments. The amendments include the recognition of all excess tax benefits and tax deficiencies as income tax expense or benefit in the statement of operations and changes to the timing of recognition of excess tax benefits, the accounting for forfeitures and classification of awards as either equity or liabilities and classification on the statement of cash flows. The adoption of this guidance did not have a significant impact on our consolidated financial statements. We elected to account for forfeitures as they occur.

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Intangibles, Net (Tables)

9 Months Ended

Sep. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

A summary of intangible assets is as follows (in thousands):

	September 30, 2017		December 31, 2016		Amortization (in years)
Above market lease contracts, net of accumulated amortization of $8,305 and $6,719	$	2,569	$	4,155	1 to 24
Lease in place value, net of accumulated amortization of $2,994 and $2,606	1,091		1,479		1 to 24
Intangible assets, net	$	3,660	$	5,634
Below market lease contracts, net of accumulated amortization of $3,460 and $2,859	$	2,128	$	2,729	1 to 24

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Equity Method Investments (Tables)

9 Months Ended

Sep. 30, 2017

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Equity Method Investments

The following table provides summarized data with respect to our significant equity method investments in BRP Holding and BRP Hotel for the nine months ended September 30, 2017 and 2016 (in thousands):

	For the Nine Months Ended September 30,
	2017		2016
Total revenues	$	90,267	$	70,718
Income from continuing operations before extraordinary items	16,160		1,228
Net income	16,160		1,228
Equity earnings (losses) of equity method investments	7,062		(1,629		)

At September 30, 2017 and December 31, 2016, our equity method investments are comprised of the following (in thousands):

	September 30,		December 31,
	2017		2016
BRP Holding	$	83,358	$	74,972
BRP Hotel	22,696		24,020
Village III Master	—		28,387
Builder LLCs	33,724		—
Total	$	139,778	$	127,379

Summarized financial information for our interest in the three Builder LLCs (in thousands):

	Financial Statement Carrying Amounts
					VIE
September 30, 2017	Assets		Liabilities		Assets
Builder LLCs	$	33,724	$	—	$	125,143

Schedule of Income (Loss) Related to Equity Investment

Income (losses) from equity method investments includes the following for the three and nine months ended September 30, 2017 and 2016 (in thousands):

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
BRP Holding	$	2,921		$	(186	)	$	8,386		$	(591	)
BRP Hotel	(343		)	(106		)	(1,324		)	(1,038		)
Builder LLCs	(300		)	—			(374		)	—
Total	$	2,278		$	(292	)	$	6,688		$	(1,629	)

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Debt (Tables)

9 Months Ended

Sep. 30, 2017

Debt Disclosure [Abstract]

Schedule of Debt Repurchases

In addition, we were required to use the net proceeds of certain asset sales to offer to purchase the Old Notes at a price equal to 100% of the aggregate principal amount outstanding plus accrued and unpaid interest as of the date fixed for the closing of such asset sale offer. Accordingly, we made the following repurchases:

Date of Repurchase	Principal Repurchased	Approximate Interest Payment Associated with Repurchase
December 15, 2016	$4,162,000	$120,000
November 15, 2016	$9,176,000	$220,000
September 27, 2016	$625,000	$10,000
January 28, 2016	$618,000	$3,000
October 20, 2015	$7,274,000	$146,000

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Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2017

Earnings Per Share [Abstract]

Schedule of calculation of numerator and denominator for loss per common share

The numerators and denominators used to calculate basic and diluted earnings per share for the three and nine months ended September 30, 2017 and 2016 are as follows (in thousands):

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2017		2016		2017		2016
Numerator – net income attributable to HomeFed Corporation common shareholders	$	470	$	1,240	$	14,377	$	35,538
Denominator for basic earnings per share– weighted average shares	15,451		15,448		15,449		15,431
Restricted stock units	45		—		32		—
Stock options	3		4		4		12
Denominator for diluted earnings per share– weighted average shares	15,499		15,452		15,485		15,443

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Fair Value Information (Tables)

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Schedule of carrying amounts and estimated fair values

The carrying amounts and estimated fair values of our principal financial instruments that are not recognized on a recurring basis are as follows (in thousands):

	September 30, 2017				December 31, 2016
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial Liabilities:
Long-term debt (a)	$	74,386	$	74,944	$	102,084	$	103,274
Long-term debt: EB-5	23,097		25,000		—		—

(a) The fair value of the New Notes was determined by utilizing available market data inputs that are considered level 2 inputs.  Quoted prices are available but trading is infrequent.  We utilized the available market data based on the quoted market prices to determine an average fair market value over the last 10 business days of the reporting period.

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Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2017

Related Party Transactions [Abstract]

Schedule of future minimum annual rental expense

Future minimum annual rental expense (exclusive of real estate taxes, maintenance and certain other charges) that BRP Leasing is obligated to pay to BRP Holding for office space is as follows at September 30, 2017 (in thousands):

Remainder of 2017	$	1,890
2018	6,301
	$	8,191

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Real Estate Sales Activity (Tables)

9 Months Ended

Sep. 30, 2017

Real Estate Sales Activity [Abstract]

Schedule of real estate sales activity

For the three and nine months ended September 30, 2017 and 2016, we closed on sales of real estate at The Market Common as follows:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
	Number of units sold	Cash Proceeds		Number of units sold	Cash Proceeds		Number of units sold	Cash Proceeds		Number of units sold	Cash Proceeds
Single family lots	8	$	400,000	10	$	450,000	30	$	1,380,000	32	$	1,500,000
Multi-family lots	7	180,000		—	—		15	380,000		10	250,000
Profit sharing agreements	N/A	200,000		N/A	500,000		N/A	950,000		N/A	1,150,000

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Schedule of outstanding bonds

As of September 30, 2017, the amount of outstanding bonds for each project is as follows:

	Amount of outstanding bonds
Otay Land project		$49,500,000
San Elijo Hills project	1,550,000
Ashville Park project	800,000

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

Schedule of Segment Reporting

Certain information concerning our segments for the three and nine months ended September 30, 2017 and 2016 is presented in the following table.

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
	(in thousands)
Revenues:
Real estate	$	14,011		$	8,760		$	61,659		$	55,818
Farming	3,411			4,427			3,411			4,427
Corporate	3			3			9			9
Total consolidated revenues	$	17,425		$	13,190		$	65,079		$	60,254
Income (loss) from continuing operations before income taxes and noncontrolling interest:
Real estate	$	2,113		$	955		$	10,938		$	11,213
Farming	2,100			3,166			(59		)	1,050
Corporate	(3,123		)	(2,547		)	(8,436		)	(6,944		)
Total consolidated income (loss) from continuing operations before income taxes and noncontrolling interest	$	1,090		$	1,574		$	2,443		$	5,319
Depreciation and amortization expenses:
Real estate	$	817		$	858		$	2,488		$	2,695
Farming	95			71			247			189
Corporate	15			12			44			35
Total consolidated depreciation and amortization expenses	$	927		$	941		$	2,779		$	2,919
Identifiable assets employed:				September 30, 2017			December 31, 2016
Real estate				$	528,615		$	516,260
Farming				13,442			13,468
Corporate				52,382			52,604
Total consolidated assets				$	594,439		$	582,332

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Accounting Developments - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Accounting Policies [Abstract]
Comprehensive income (loss)	$ 0	$ 0	$ 0	$ 0

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Intangibles, Net (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Intangible assets	$ 3,660	$ 5,634
Below market lease contracts	2,128	2,729
Below market lease contracts, accumulated amortization	$ 3,460	2,859
Minimum
Finite-Lived Intangible Assets [Line Items]
Below market lease contracts, amortization of useful life	1 year
Maximum
Finite-Lived Intangible Assets [Line Items]
Below market lease contracts, amortization of useful life	24 years
Above Market Lease Contracts
Finite-Lived Intangible Assets [Line Items]
Intangible assets	$ 2,569	4,155
Intangible assets, accumulated amortization	$ 8,305	6,719
Above Market Lease Contracts | Minimum
Finite-Lived Intangible Assets [Line Items]
Intangible assets, amortization of useful life	1 year
Above Market Lease Contracts | Maximum
Finite-Lived Intangible Assets [Line Items]
Intangible assets, amortization of useful life	24 years
Leases In Place Value
Finite-Lived Intangible Assets [Line Items]
Intangible assets	$ 1,091	1,479
Intangible assets, accumulated amortization	$ 2,994	$ 2,606
Leases In Place Value | Minimum
Finite-Lived Intangible Assets [Line Items]
Intangible assets, amortization of useful life	1 year
Leases In Place Value | Maximum
Finite-Lived Intangible Assets [Line Items]
Intangible assets, amortization of useful life	24 years

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Intangibles, Net (Narrative) (Details) - USD ($) $ in Thousands, shares in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Stock issued during period related to an acquisitions (in shares)					7.5
Below market lease, amortization income, remainder of 2017	$ (200)		$ (200)
Below market lease, amortization income, 2018	(550)		(550)
Below market lease, amortization income, 2019	(200)		(200)
Below market lease, amortization income, 2020	(200)		(200)
Below market lease, amortization income, 2021	(200)		(200)
Below market lease, amortization income, thereafter	(750)		(750)
Above Market Lease Contracts
Finite-Lived Intangible Assets [Line Items]
Future amortization expense, intangible assets, remainder of 2017	550		550
Future amortization expense, intangible assets, 2018	1,700		1,700
Future amortization expense, intangible assets, 2019	50		50
Future amortization expense, intangible assets, 2020	50		50
Future amortization expense, intangible assets, 2021	50		50
Future amortization expense, intangible assets, thereafter	200		200
Leases In Place Value
Finite-Lived Intangible Assets [Line Items]
Future amortization expense, intangible assets, remainder of 2017	100		100
Future amortization expense, intangible assets, 2018	300		300
Future amortization expense, intangible assets, 2019	100		100
Future amortization expense, intangible assets, 2020	100		100
Future amortization expense, intangible assets, 2021	100		100
Future amortization expense, intangible assets, thereafter	400		400
Amortization expense	$ 100	$ 150	$ 400	$ 450

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Equity Method Investments (Narrative) (Details)		1 Months Ended
	Jan. 05, 2017 USD ($)	Jan. 31, 2017 USD ($) a builder home	Apr. 30, 2016 USD ($) a builder home	Sep. 30, 2017
Schedule of Equity Method Investments [Line Items]
Payments to acquire and develop real estate	$ 33,200,000
BRP Holding
Schedule of Equity Method Investments [Line Items]
Ownership percentage				61.25%
BRP Hotel
Schedule of Equity Method Investments [Line Items]
Ownership percentage				25.80%
Otay Ranch
Schedule of Equity Method Investments [Line Items]
Area of land (in acres) | a		450	450
Number of planned homes (in homes) | home		948	992
Number of builders | builder		3	3
Number of homes planned to build and sell | home			948
Market value of land contributed as an investment in lieu of cash			$ 20,000,000
Proceeds from sale of real estate			30,000,000
Land			15,150,000
Land, difference in basis			$ 4,850,000
Land improvements		$ 2,250,000
Credit for capital contributions		78,600,000
Builder LLCs | Otay Ranch
Schedule of Equity Method Investments [Line Items]
Payments to acquire and develop real estate		$ 20,000,000

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Equity Method Investments (Schedule of Equity Method Investments) (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Schedule of Equity Method Investments [Line Items]
Equity method investments	$ 139,778	$ 127,379
Builder LLCs
Schedule of Equity Method Investments [Line Items]
Assets	33,724
Liabilities	0
VIE, Assets	125,143
Equity method investments	33,724	0
BRP Holding
Schedule of Equity Method Investments [Line Items]
Equity method investments	83,358	74,972
BRP Hotel
Schedule of Equity Method Investments [Line Items]
Equity method investments	22,696	24,020
Village III Master
Schedule of Equity Method Investments [Line Items]
Equity method investments	$ 0	$ 28,387

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Equity Method Investments (Schedule of Income (Loss) Related to Equity Investment) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Schedule of Equity Method Investments [Line Items]
Income (losses) from equity method investments	$ 2,278	$ (292)	$ 6,688	$ (1,629)
BRP Holding
Schedule of Equity Method Investments [Line Items]
Income (losses) from equity method investments	2,921	(186)	8,386	(591)
BRP Hotel
Schedule of Equity Method Investments [Line Items]
Income (losses) from equity method investments	(343)	(106)	(1,324)	(1,038)
Builder LLCs
Schedule of Equity Method Investments [Line Items]
Income (losses) from equity method investments	$ (300)	$ 0	$ (374)	$ 0

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Equity Method Investments (Schedule of Summarized Data) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Schedule of Equity Method Investments [Line Items]
Equity earnings (losses) of equity method investments	$ 2,278	$ (292)	$ 6,688	$ (1,629)
BRP Holding and BRP Hotel
Schedule of Equity Method Investments [Line Items]
Total revenues			90,267	70,718
Income from continuing operations before extraordinary items			16,160	1,228
Net income			16,160	1,228
Equity earnings (losses) of equity method investments			$ 7,062	$ (1,629)

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Debt (Narrative) (Details)				1 Months Ended		9 Months Ended
	Sep. 28, 2017 USD ($)	Sep. 27, 2017 USD ($)	Sep. 18, 2017 USD ($) option	Feb. 28, 2017 USD ($) unit $ / unit	Apr. 30, 2015 USD ($)	Sep. 30, 2017 USD ($)	Oct. 24, 2017 USD ($)	Dec. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	Jun. 30, 2015 USD ($)
Debt Instrument [Line Items]
Capitalized interest on real estate held for development						$ 5,900,000			$ 6,600,000
6.5% Senior Notes due 2018
Debt Instrument [Line Items]
Amount allowed to borrow under debt covenants										$ 125,000,000
Interest rate										6.50%
Price as percent of principal amount						100.00%
Payments of debt extinguishment costs	$ 350,000
Long-term notes payable						$ 0
6.5% Senior Notes Due 2019
Debt Instrument [Line Items]
Amount allowed to borrow under debt covenants		$ 75,000,000
Interest rate		6.50%
Price as percent of principal amount						100.00%
Long-term notes payable						$ 75,000,000
Redemption price percentage						101.00%
6.5% Senior Notes Due 2019 | Revolving Credit Facility
Debt Instrument [Line Items]
Debt covenant, maximum allowable borrowing capacity						$ 15,000,000
6.5% Senior Notes Due 2019 | Secured Debt
Debt Instrument [Line Items]
Debt covenant, maximum allowable borrowing capacity						70,000,000
6.5% Senior Notes Due 2019 | Construction Loan
Debt Instrument [Line Items]
Debt covenant, maximum allowable borrowing capacity						65,000,000
Senior Notes Due 2019 and EB-5 Program
Debt Instrument [Line Items]
Debt issuance costs						2,350,000		$ 550,000
Debt discount						$ 150,000		$ 500,000
Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility					$ 15,000,000
Revolving Credit Facility | LIBOR
Debt Instrument [Line Items]
Spread on variable rate					2.60%
Operational Line of Credit
Debt Instrument [Line Items]
Credit facility					$ 3,000,000
Subsequent Event | Revolving Credit Facility
Debt Instrument [Line Items]
Draws under line of credit							$ 0
Jefferies LLC | 6.5% Senior Notes Due 2019
Debt Instrument [Line Items]
Placement fee for new notes		$ 100,000
Otay Village Lender, LLC | EB-5 Program
Debt Instrument [Line Items]
Draws under line of credit			$ 25,000,000
EB-5 Program offering amount, up to				$ 125,000,000
Number of units offered for subscription | unit				250
Subscription price per unit (in dollars per share) | $ / unit				500,000
Debt term			5 years
Number of options to extend term | option			2
Extension term			1 year
Effective interest rate (as a percent)			3.50%
Otay Village Lender, LLC | Subsequent Event | EB-5 Program
Debt Instrument [Line Items]
Amount in escrow subject to approval							$ 24,900,000

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Debt Schedule of Debt Repurchases (Details) - USD ($) $ in Thousands						9 Months Ended
	Dec. 15, 2016	Nov. 15, 2016	Sep. 27, 2016	Jan. 28, 2016	Oct. 20, 2015	Sep. 30, 2017	Sep. 30, 2016
Debt Disclosure [Abstract]
Principal Repurchased	$ 4,162	$ 9,176	$ 625	$ 618	$ 7,274	$ 103,145	$ 1,243
Approximate Interest Payment Associated with Repurchase	$ 120	$ 220	$ 10	$ 3	$ 146

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Income Taxes (Narrative) (Details) $ in Millions	3 Months Ended
	Sep. 30, 2017 USD ($)
Income Tax Disclosure [Abstract]
Decrease in deferred liabilities	$ 8.6
Reduction in unrecognized tax benefits	$ 4.6

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Earnings Per Common Share (Schedule of Calculation of Numerator and Denominator For Loss Per Common Share) (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Numerator – net income (loss) attributable to HomeFed Corporation common shareholders	$ 470	$ 1,240	$ 14,377	$ 35,538
Denominator for diluted loss per share– weighted average shares (in shares)	15,451	15,448	15,449	15,431
Denominator for basic loss per share– weighted average shares (in shares)	15,499	15,452	15,485	15,443
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Incremental common shares attributable to dilutive effect of share-based payment arrangements (in shares)	45	0	32	0
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Incremental common shares attributable to dilutive effect of share-based payment arrangements (in shares)	3	4	4	12

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Fair Value Information (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	$ 74,386	$ 102,084
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	74,944	103,274
EB-5 | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	23,097	0
EB-5 | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	$ 25,000	$ 0

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Related Party Transactions (Narrative) (Details)		1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 27, 2017 USD ($)	Mar. 31, 2017 USD ($) shares	Sep. 30, 2017 USD ($) director employee $ / shares shares	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($) director employee $ / shares	Sep. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)
Related Party Transaction [Line Items]
Number of board of directors | director			7		7
Administrative services fee expenses			$ 45,000	$ 45,000	$ 135,000	$ 135,000
Rental income			$ 5,877,000	5,812,000	$ 18,166,000	17,518,000
Director
Related Party Transaction [Line Items]
Value of note outstanding purchased by related party	$ 7,000,000						$ 5,000,000
Percentage of note outstanding purchased by related party	9.30%						4.00%
Jefferies | 6.5% Senior Notes due 2018
Related Party Transaction [Line Items]
Fee amount as percentage					0.50%
Fee amount as percentage on first and second anniversary					0.50%
Placement fee for new notes					$ 100,000
Builder LLCs
Related Party Transaction [Line Items]
Members of management committee | employee			4		4
Employee | Builder LLCs
Related Party Transaction [Line Items]
Members of management committee | employee			2		2
Leucadia
Related Party Transaction [Line Items]
Number of board of directors | director			3		3
Sale of stock, number of shares sold (in shares) | shares			14,008
Sale of stock, price per share (in dollars per share) | $ / shares			$ 43.00		$ 43.00
Expiration of sublease to Leucadia					Oct. 01, 2018
Rental income			$ 3,000	$ 3,000	$ 9,000	$ 9,000
Leucadia | Board of Directors Chairman
Related Party Transaction [Line Items]
Sale of stock, number of shares sold (in shares) | shares		783,889
Sale of stock, consideration received		$ 31,300,000

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Related Party Transactions (Schedule Of Future Minimum Annual Rental Expense) (Details) - BRP Holding $ in Thousands	Sep. 30, 2017 USD ($)
Related Party Transaction [Line Items]
Remainder of 2017	$ 1,890
2018	6,301
Total	$ 8,191

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Interest and Other Income (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Sep. 26, 2017	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Real Estate Properties [Line Items]
Interest income		$ 0	$ 300	$ 25	$ 850
Other income		$ 90	75	$ 260	225
Otay Ranch And Flat Rock
Real Estate Properties [Line Items]
Settlement amount	$ 350
Recovery of judgment, amount					$ 1,000
SweetBay Project
Real Estate Properties [Line Items]
Settlement amount			$ 550

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Real Estate Sales Activity (Narrative) (Details)		1 Months Ended		3 Months Ended				9 Months Ended
	Oct. 24, 2017 USD ($) property home	Jun. 30, 2015 property	May 31, 2015 property	Sep. 30, 2017 USD ($) property home	Mar. 31, 2017 USD ($) a ft² home	Sep. 30, 2016 USD ($) a property	Sep. 30, 2015 USD ($)	Sep. 30, 2017 USD ($) property home	Sep. 30, 2016 USD ($) a property	Apr. 30, 2016 a	Aug. 31, 2015 a
Real Estate Properties [Line Items]
Cost of sales of real estate				$ 7,609,000		$ 1,442,000		$ 38,359,000	$ 26,236,000
Sales of real estate				7,980,000		2,757,000		43,108,000	37,805,000
Otay Land
Real Estate Properties [Line Items]
Area of land (in acres) | a										450
Cash proceeds						$ 30,000,000			$ 30,000,000
Towncenter - Phase 1 & 2
Real Estate Properties [Line Items]
Cash proceeds					$ 5,800,000
Area of real estate property (in acres) | ft²					48,800
Towncenter - Phase 1 & 2 | Multi-family lots
Real Estate Properties [Line Items]
Number of units sold | home					12
Towncenter - Phase 3
Real Estate Properties [Line Items]
Area of land (in acres) | a					2.5	7			7
Cash proceeds					$ 600,000
Towncenter - Phase 3 | Multi-family lots
Real Estate Properties [Line Items]
Number of units sold | home					12
Proceeds from deposits on real estate sales				230,000
Sales of real estate					$ 100,000
San Elijo Hills project
Real Estate Properties [Line Items]
Cash proceeds						$ 0		$ 13,100,000	$ 0
Number of units sold | home								9
Number of real estate properties contracted to construct and sell (in properties) | property		58
Refundable deposit payment received							$ 500,000
Real estate revenue								$ 13,000,000
Cost of sales of real estate								12,200,000
Ashville Park project
Real Estate Properties [Line Items]
Cash proceeds				$ 0				$ 0	550,000
Area of real estate property (in acres) | a											67
Gross profit									$ 250,000
The Market Common | Single family lots
Real Estate Properties [Line Items]
Number of units sold | property				8		10		30	32
Sales of real estate				$ 400,000		$ 450,000		$ 1,380,000	$ 1,500,000
The Market Common | Multi-family lots
Real Estate Properties [Line Items]
Number of units sold | property				7		0		15	10
Sales of real estate				$ 180,000		$ 0		$ 380,000	$ 250,000
SweetBay Project
Real Estate Properties [Line Items]
Cash proceeds				6,900,000				18,550,000	0
Number of real estate properties contracted to construct and sell (in properties) | property			127
Cost of sales of real estate				7,100,000				$ 18,400,000
Home building costs				100,000
Reserve for potential loss				$ 100,000
Sales of real estate						$ 1,300,000			$ 1,300,000
SweetBay Project | Single family lots
Real Estate Properties [Line Items]
Number of units sold | home				21				53
Subsequent Event | San Elijo Hills project
Real Estate Properties [Line Items]
Number of real estate properties contracted to sell | home	15
Sales price of real estate lots contracted to sell	$ 21,500,000
Subsequent Event | The Market Common | Homebuilder
Real Estate Properties [Line Items]
Non-refundable option payment received	$ 25,000
Subsequent Event | The Market Common | Homebuilder | Single family lots
Real Estate Properties [Line Items]
Number of real estate lots agreed to sell (in properties) | property	34
Sales price of real estate lots contracted to sell	$ 1,700,000
Subsequent Event | The Market Common | Homebuilder | Multi-family lots
Real Estate Properties [Line Items]
Number of real estate lots agreed to sell (in properties) | property	63
Sales price of real estate lots contracted to sell	$ 850,000
Subsequent Event | SweetBay Project
Real Estate Properties [Line Items]
Sales price of real estate lots contracted to sell	$ 8,500,000
Subsequent Event | SweetBay Project | Single family lots
Real Estate Properties [Line Items]
Number of real estate lots agreed to sell (in properties) | home	26

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Real Estate Sales Activity (Schedule Of Real Estate Sales Activity) (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017 USD ($) property	Sep. 30, 2016 USD ($) property	Sep. 30, 2017 USD ($) property	Sep. 30, 2016 USD ($) property
Real Estate Properties [Line Items]
Sales of real estate	$ 7,980	$ 2,757	$ 43,108	$ 37,805
Single family lots | The Market Common
Real Estate Properties [Line Items]
Number of units sold | property	8	10	30	32
Sales of real estate	$ 400	$ 450	$ 1,380	$ 1,500
Multi-family lots | The Market Common
Real Estate Properties [Line Items]
Number of units sold | property	7	0	15	10
Sales of real estate	$ 180	$ 0	$ 380	$ 250
Profit sharing agreements | The Market Common
Real Estate Properties [Line Items]
Sales of real estate	$ 200	$ 500	$ 950	$ 1,150

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Real Estate Acquisitions (Details) $ in Thousands	1 Months Ended
	Aug. 31, 2015 USD ($) a property	Sep. 30, 2017 USD ($)
Ashville Park project
Real Estate Properties [Line Items]
Area of real estate property (in acres) | a	67
Cash used for the purchase of real estate	$ 5,000
Number of real estate lots (in properties) | property	67
Refundable deposit on real estate	$ 200
Pacho
Real Estate Properties [Line Items]
Land held for development		$ 17,750

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Commitments and Contingencies (Narrative) (Details)		1 Months Ended	3 Months Ended		9 Months Ended	12 Months Ended
	Sep. 26, 2017 USD ($)	Apr. 30, 2016 USD ($) a	Sep. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2013 a	Dec. 31, 2016 USD ($)	Apr. 29, 2016 USD ($)
Business Acquisition [Line Items]
Restricted cash					$ 2,642,000		$ 2,672,000
Otay Ranch And Flat Rock
Business Acquisition [Line Items]
Settlement amount	$ 350,000
The Market Common
Business Acquisition [Line Items]
Letter of credit					1,250,000
Restricted cash					1,250,000
BRP Leasing
Business Acquisition [Line Items]
Restricted cash					1,400,000
Amount of indemnification					8,200,000
Amount of indemnification in projected operating expenses and taxes					4,500,000
BRP Leasing | Minimum
Business Acquisition [Line Items]
Restricted cash					$ 500,000
Flat Rock
Business Acquisition [Line Items]
Area of land related to environmental remediation (in acres) | a						30
Amount of legal costs to be reimbursed by us to the defendants				$ 350,000
Recovery sought on purchase agreement				$ 13,500,000
SweetBay Project
Business Acquisition [Line Items]
Loan outstanding of school		$ 8,100,000						$ 5,500,000
Area of land, pledged as collateral (in acres) | a		42
Area of land, released from collateral (in acres) | a		42
Settlement amount			$ 550,000

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Commitments and Contingencies (Schedule Of Outstanding Bonds) (Details) $ in Thousands	Sep. 30, 2017 USD ($)
Otay Land project
Amount of outstanding bonds	$ 49,500
San Elijo Hills project
Amount of outstanding bonds	1,550
Ashville Park project
Amount of outstanding bonds	$ 800

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Share-based compensation (Details) $ / shares in Units, $ in Thousands			3 Months Ended	9 Months Ended
	Aug. 04, 2017 installment $ / shares shares	Mar. 15, 2017 $ / shares shares	Sep. 30, 2017 USD ($) shares	Sep. 30, 2017 USD ($) shares	Aug. 13, 2014 shares
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares)					100,000
Restricted stock award issued (in shares)		75,000
Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Per share weighted average price of shares purchased (in dollars per share) | $ / shares		$ 44.20
Compensation cost | $			$ 300	$ 700
Tranche One | Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock award issued (in shares)		45,000
Vesting percentage		50.00%
Award settlement period		30 days
Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost | $			$ 200	$ 400
Tranche Two | Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock award issued (in shares)		30,000
Vesting percentage		50.00%
Award settlement period		10 days
Award expiration period		30 days
1999 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant			255,400	255,400
1999 Stock Incentive Plan | Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted in period (in shares)	136,500
Number of exercise installments | installment	4
Award requisite service period	1 year
Award vesting period	4 years
Award expiration period	5 years
1999 Stock Incentive Plan | Board of Directors | Nonemployee Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted in period (in shares)	7,000
Stock options granted during period, exercise price (in dollars per share) | $ / shares	$ 44.00
2017 RSU Plan | Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares)	66,000

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Segment Information (Narrative) (Details)	9 Months Ended
	Sep. 30, 2017 segment
Segment Reporting [Abstract]
Number of reportable segments (in segments)	3

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Segment Information (Schedule Of Segment Reporting) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Segment Reporting Information [Line Items]
Total consolidated revenues	$ 17,425	$ 13,190	$ 65,079	$ 60,254
Total consolidated loss from continuing operations before income taxes and noncontrolling interest	1,090	1,574	2,443	5,319
Total consolidated depreciation and amortization expenses	927	941	2,779	2,919
Total consolidated assets	594,439		594,439		$ 582,332
Real estate
Segment Reporting Information [Line Items]
Total consolidated revenues	14,011	8,760	61,659	55,818
Total consolidated loss from continuing operations before income taxes and noncontrolling interest	2,113	955	10,938	11,213
Total consolidated depreciation and amortization expenses	817	858	2,488	2,695
Total consolidated assets	528,615		528,615		516,260
Farming
Segment Reporting Information [Line Items]
Total consolidated revenues	3,411	4,427	3,411	4,427
Total consolidated loss from continuing operations before income taxes and noncontrolling interest	2,100	3,166	(59)	1,050
Total consolidated depreciation and amortization expenses	95	71	247	189
Total consolidated assets	13,442		13,442		13,468
Corporate
Segment Reporting Information [Line Items]
Total consolidated revenues	3	3	9	9
Total consolidated loss from continuing operations before income taxes and noncontrolling interest	(3,123)	(2,547)	(8,436)	(6,944)
Total consolidated depreciation and amortization expenses	15	$ 12	44	$ 35
Total consolidated assets	$ 52,382		$ 52,382		$ 52,604

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Subsequent Event (Details)	3 Months Ended
	Sep. 30, 2017 USD ($)
Subsequent Events [Abstract]
Dividends declared by subsidiary	$ 13,000,000
Dividends declared by subsidiary attributable to noncontrolling interest	$ 1,950,000