Fall Auction for El Toro Parcels Set

Offering the most definitive timeline yet for the sale of the closed El Toro Marine base to developers, a high ranking Navy official said Friday that the auction for the land will begin this fall and be completed before the end of July.

Demolition of the former military airfield’s runway could begin shortly after that, erasing the physical vestige of a political battle that divided Orange County for a decade.

In a meeting with local developers and officials at a hotel in Newport Beach, Wayne Arny, assistant secretary of the Navy for Installations and Environment, said the Navy is preparing documents to invite bids on the four parcels that comprise the 3,700 acres of base land.

“We are ready to go,” Arny said. “We expect [the documents] to be completed within a month or two.... The whole process should be finished by the end of July with the close of escrows.”

As soon as the property titles are transferred to civilian hands, the work of redeveloping the base could begin with the clearing of the runways.

The city of Irvine, which annexed the base last year and is overseeing its development into the Orange County Great Park, is already looking for a contractor to recycle the runways, said Dan Jung, the city’s director of strategic programs.

Construction of homes and businesses could begin by the end of 2006, 13 years after the Navy first announced that El Toro Marine Corps Air Station and its sister facility in Tustin would close.

Redevelopment of the 1,600-acre Tustin Marine base is underway, but the much larger El Toro had been mired in a decade-long battle over whether to turn the facility into a commercial airport.

The conflict consumed local politics for years, breaking the county into a north vs. south battleground. There were four ballot measures and a dozen lawsuits, the last of which were settled in June.

Arny said the political climate and the lawsuits made it difficult for the Navy to dispose of the base, but with those resolved the military is ready to move forward with the sales.

Auction bidders will have to be pre-qualified, meaning they will have to show they have the resources to buy and develop the parcels. Further details will be posted at a website created for the project: www.heritagefields.com.

Some real estate experts estimate that the base, which Irvine has zoned for as many as 3,625 homes and 3 million square feet of commercial and industrial space, is worth $800 million to $1.2 billion. The Great Park will have 2,800 acres of parks and public facilities.

The proceeds from the auction will go to a federal fund earmarked for environmental cleanup of closed military bases, including El Toro.

At the Friday meeting, which was sponsored by the law firm of Greenberg Traurig, many developers expressed concern about ongoing cleanup at the base.

Federal and state environmental agencies recently cleared the base for transfer to civilian use, but several pieces of land will remain in Navy hands while it conducts further environmental tests and cleanup.

Those pieces, which add up to 995 acres, are spread over three of the four parcels. The carved out areas will be leased to the parcel buyers, then deeded to them once the cleanup or testing is completed.

In the meantime, developers will be restricted on what they can do in those areas.

That may bring uncertainties for developers, said Greg Hurley, an environmental attorney. He said that a better solution might be to give the developers the option to perform the environmental cleanup themselves and figure the cost into the bids.

Arny said it was a good suggestion for future base closures, but that El Toro was too far ahead in the process to add another factor that might delay the sale.

Most of the known pollution found in the base involves solvents that have seeped underground, including a sprawling plume of contaminated groundwater. But such contamination is deep underground and unlikely to hinder above-ground development, Navy officials say.

Richard Knowland, a division president with developer Lennar Communities, said his company is interested in bidding on all four parcels, but it is concerned about further contamination that may be discovered during construction.

“There has to be a plan for contingencies,” Knowland said.

The contingency, Arny said, is federal law. The Navy is legally obligated to fully clean the land before civilian use.

“We’ve drilled a lot of holes in this land [for soil testing] and we are confident it is relatively clean,” he said. “If there is something unforeseen, we will settle the claim and we will go on.”