Infrastructure Costs for Old O.C. Base Estimated to Be $40 Million Higher

Irvine officials now estimate that the city will need an additional $40 million to build roads and utility lines for their planned Great Park because of delays in the sale of the land, site of the former El Toro Marine base.

The extra cost will not jeopardize Irvine’s efforts to turn the 4,700-acre former airfield into a mix of homes, recreational facilities, offices and parkland, officials said.

But it could reduce the amount of money the federal government gets for the land, real estate experts say. Because infrastructure costs will be borne mostly by developers who buy the land, they likely will bid less to offset the higher expenses, the experts say.

The move is necessary because the Navy announced earlier this year that the land will be sold in phases rather than in one auction. This means the work will cost more because of rising costs, city officials say.

The Irvine Planning Commission will vote today whether to revise infrastructure fees that the city will charge Great Park developers to meet those higher costs.

The issue is significant because El Toro is being watched by federal authorities as a model for selling other closed bases in the country, and the Orange County sale proceeds are to be set aside for environmental cleanup efforts at decommissioned bases.

Navy officials declined to comment on the additional cost.

El Toro had been mired in controversy for nearly a decade as the county debated whether to turn it into a commercial airport. Voters finally opted for parks and homes in 2002.

The Navy divided the base into four parcels for sale. A 1,000-acre site has been reserved for a wildlife preserve.

The city also drafted development agreements that would give buyers building rights. In exchange, the developers would pay the city $200 million to help cover the $371 million in infrastructure costs. An additional $171 million would come from property levies on homeowners and business owners who settle in the Great Park.

But those figures were based on original plans to auction all four parcels sometime this year, Irvine officials say.

In May, the Navy said it would auction the parcels in phases while officials work out lease restrictions on portions of the land that cannot be sold immediately. About 995 acres have soil contamination or potential contamination.

The Navy said it will auction the first parcel this fall. Irvine officials estimate the other parcels will be sold by the end of 2005.

“With the change in the timing of the sale, we had to revise our financial model,” said Councilman Chris Mears, chairman of the Orange County Great Park Corp., the nonprofit organization that oversees the project’s development and maintenance.

The city now estimates the base infrastructure will cost $411 million. Under the proposal to be considered by the Planning Commission, developers now will be asked to pay a total of $220 million in fees and will be required to pay in a lump sum.

They can opt not to sign the agreement, but they will be severely restricted on how much they can build on the parcels.

The city now estimates it will raise $191 million in special property taxes. But if those figures are not met, developers may be asked to pay as much as $60 million in supplemental fees.

Ron Silverman, an attorney with Cox, Castle & Nicholson, a firm that specializes in real estate law, said the new development agreement is likely to lower bids: “You would have to take all that into consideration when you put together your bid.”