With stunning views of the Bay Area, a prime piece of land with a long Naval history and a tug-of-war over its sale, is about to be developed by a California company.
The spectacular piece of property, nestled at the base of Oakland, California's southern foothills, was put up for sale by the federal government in 2002 after a protracted fight over who should get the 183 acres, once a rolling golf course known as Oak Knoll in the 1920s and a massive military hospital complex during World War II. Like many excess government properties, it had been abandoned for years and was falling apart.
The city of Oakland wanted the property for a song, and so did a number of developers. The Navy wanted to get a fair market value for the land, and the highest bidder was a church that, in the end, couldn't raise the $22.5 million it had bid for it. But the story has a happy ending, at least for some of the participants, and the potential for a new community with a spectacular view.
It was in the midst of World War II that the U.S. Navy first saw huge potential in a 183-acre piece of land. But in the days directly following the surprise attack on Pearl Harbor, the golf course found itself struggling financially. At the same time, the Navy's three existing West Coast hospitals were overflowing with wounded soldiers.
According to historical records published by the Navy, the facility quickly expanded into a massive complex of 111 buildings. During its first five years, the center was used to treat more than 150,000 patients, and the Navy continued its expansion through the Korean War. But it wasn't long after that war ended that a process to systematically downsize the complex began. Although many of the original structures that surrounded the hospital were demolished over the next 50 years, the core infrastructure remained, and a nine-story hospital building that was constructed in 1968 continued to support the Navy's needs through both the Vietnam and Gulf wars
In 1999, the Navy's Base Realignment and Closing Office began working with the General Services Administration's Office of Property Disposal to bring the site to market. And from the time it was decommissioned, Oakland officials made it clear to the government that they were interested in having the property conveyed to the city.
In fact, the city had already begun working on a plan for the community with Shea Homes pegged as the master developer. The proposal called for 577 housing units and 25,000 square feet of retail development. In addition, there were plans for seven to 10 affordable housing units with another 113 units of independent and assisted-living housing units added in an attempt to qualify for the Navy's public benefit conveyance.
“We got into the discussions with the Navy as to whether or not there was an actual value to the property,” recalls city Councilman Larry Reid, who represents the 7th council district in which the property is located. “We said, there is no value given that we would have to spend anywhere from $35 to $50 million to demolish the hospital and put in all new infrastructure.”
The Navy dug in its heels, wielding an independent appraisal that showed there was value to the property. “I would assume that was based on the fact that you have one-to-two million dollar homes—some go as high as ten [million]—that surround this incredible piece of dirt,” speculates Reid. “I am sure the Navy saw that this was a military base surrounded by upper class, residential neighborhoods, so they chose not to convey the property to us.” Not only would the Navy not give away its land to the city, upon further negotiation they even refused to sell it to Oakland. “We offered them a deal where we would pay $10 million—five up front and the next five after ten years,” recalls Reid. “The Navy said, ‘No, thank you.'”
Learn more about markets featured in this article: San Francisco, CA.