In what has been called the way of the future for disposing of shuttered military installations, the General Services Administration (GSA) will begin taking bids online early this year from developers interested in acquiring a piece of the old El Toro Marine Corps Air Station in Orange County, Calif.
But the fact that the vacant 3,700-acre property is being sold at electronic auction isn't the only thing that sets the transfer apart from previous transactions. At El Toro, which has been renamed Heritage Fields, the City of Irvine is acting as a partner rather than a deterrent. "We will be friendly regulators," vows city manager Allison Hall.
For the most part, bases that have been closed in the past have been deeded over to the local or county government, a process that often hindered rather than spurred redevelopment. But the land at Heritage Fields will be sold directly to developers.
Not that the pending sale of the 60-year-old base has been exactly swift. Though El Toro was decommissioned in 1993, local activist groups successfully delayed disposition until they could support a redevelopment plan that specified the property would not be used for aviation purposes. And even though the auction will be online, it won't be rapid-fire. The GSA, which was asked by the Navy Department to conduct the auction because of its experience in managing public sales of government property, says there is no predetermined end date.
Instead, the agency will monitor bidding activity. When bidding appears to slow or stop for several days, a three-day notice of the closing date will be issued. But if a higher bid is received prior to the closing day, the auction will roll over to the next day, a process that will be repeated until no bids have been received within a 24-hour period.
In that way, the GSA says, "bidders will essentially determine when the sale closes by virtue of bidding activity."
Auctioning itself is not new. The GSA auctioned 240 acres of Tustin Marine Corps Air Station property for the Department of the Navy in Southern California in 2002 as part of a broader move by the Department of Veteran Affairs to unload or lease a portion of a real estate portfolio valued at $335 billion. Miami-based Lennar and William Lyon Homes, of Newport Beach, Calif., paid $209 million in partnership as the top bidder for the decommissioned property. The online approach, however, should set the path for more government auctions in the future.
Money for Cleanup
Regardless of how long the process takes, Republican Congressman Christopher Cox, whose district includes Irvine, calls the system "a model for all future military base sales."
"This base alone may raise four times as much money as has been raised in four previous rounds of base closures, constituting approximately 100 bases," says the eight-term lawmaker from nearby Newport Beach. Navy officials expect the parcels to sell for $500 million to $1.2 billion. "This new model creates monies for the cleanup of the bases and also accelerates the local authority's ability to more quickly get to a point where new tax and job-generating development begins on the site."
According to assistant Navy secretary Wayne Arny, proceeds from the El Toro sale will go to a fund earmarked for cleaning up environmental hazards at the base and other Navy and Marine Corps facilities. "With the base cleanup fund getting larger," he says, "we'll be able to accelerate the cleanup schedule." About 70 percent of El Toro already has been cleansed.
The auction won't begin until the city annexes property, a process which is already under way. Once the Local Agency Formation Commission, the state agency responsible for overseeing municipal annexations, gives its blessing, a start date will be announced. Specific information will be available at www.heritagefields.com, but potential bidders can register now.
The property, located along Interstate 5 about 44 miles from downtown Los Angeles and 65 miles from San Diego, will be sold as four separate sites. Developers can bid on one or more parcels, but the total number of buyers will not exceed four. Patrick Remolacio, of Colliers Seeley International, the brokerage firm hired to market the auction, expects a broad range of bidders.
Irvine's land plan for the property calls for 3,460 dwelling units and 2.9 million square feet of office and retail space. Parcels one, two, and three reportedly will have varying residential densities ranging from seniors housing to 245 golf course residences. Part of parcel three also is reserved for a 190-acre transit-oriented village with 1,500 units. Parcel four is zoned for a 34-acre auto center expansion and research and development uses.
Heritage Fields will feature 1,350 acres of open space, including a "world class" central park, which is what finally convinced Orange County residents to give their blessings in 2002. The "Great Park," as the facility is known, will include a university campus, recreation and wilderness open space, a cemetery, and an exposition center.
Successful bidders will have the option of developing the property at a low density in accordance with the city's base plan or dedicating part of the land for the park and other public areas in exchange for the right to develop the remainder for housing, commercial, and recreation uses at a higher density. And, oh yes, they also will be expected to pay for construction and maintenance of the Great Park.
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