Proceeds from an online bidding war between developers will pay for the Great Park at the closed El Toro Marine Corps Air Station, according to Irvine city officials, who will unveil their plans for financing the project today.
The plan would divide the 4,700-acre former base into four parts, with development and open space in each. The highest bidders would get upfront guarantees that they could build thousands of homes or industrial and commercial projects in certain areas. No additional public financing for the Great Park would be required, city officials said.
In exchange, the winning bidders would be required to dedicate swaths of open space to the city and pay tens of millions of dollars -- potentially as much as $200 million total -- for infrastructure construction and maintenance of recreational and cultural areas, which would compose up to 80% of the former base.
U.S. Navy officials, Irvine Mayor Larry Agran and city staff are scheduled to present the plan at a news conference this morning and to the City Council at 5 p.m.
"The fact of the matter is the deal does not rely on federal, state or local taxpayers," Agran said. "Orange County can expect hundreds of millions of dollars of benefit without any additional burden." "All the naysayers, doubters and professional pessimists will have to acknowledge after [today] that we've delivered on our promise," he said, referring to criticism that taxpayers would have to foot the bill for the so-called Great Park.
Voters endorsed a park plan last March as part of a countywide ballot initiative that killed a proposed commercial airport at the base. Agran had hoped for the passage of a November statewide ballot initiative that would have provided $120 million in state taxes to help pay for the park, among other projects, but voters rejected it.
Agran boasted that by negotiating a unique agreement with the Navy and "clever use of our zoning authority, we were able to create real wealth in the land that will enable us to build the key elements of the Great Park within 10 years."
The auction, annexing of the land to the city and signing of developer agreements are expected to be completed this year, he said.
"I refer to this as the Year of the Deal," he said.
The base's runways will be torn up beginning next year, and within three years, soccer and other recreational fields at the southern end of the base could be completed, he said.
Councilwoman Christina Shea, often a foe of Agran, said she thought the plan looks doable.
"On paper at least, it looks really good," she said. "This is definitely a self-contained financing plan. There really is no burden on the local taxpayer."
There are lingering questions about the cleanup of contaminated soil at the base.
Navy spokesmen in Washington and San Diego said they could not comment on the proposal but confirmed that they are ready to auction the land and will continue to clean up the base, a federal Superfund site. It is unclear who would pay for any pollution that might be uncovered once the land is sold and development is underway.
A similar online auction was used to sell off parts of the closed Tustin Marine helicopter base.
Richard Gollis, principal of the Concord Group, a real estate advisory firm that has worked with Irvine, said that while there was a slight danger that some builders might bid too high, causing delays as they seek additional funding to begin construction, in general the land was prime real estate that national home builders would be interested in. He confirmed that the auction could bring in large sums, most of which Agran said would go to the city, not the federal government.
"It's a tremendous location, a very central location with very good access from the toll road, the 5 freeway and the El Toro Y, as well as the train station," he said. "Geographically it's in the heart of the county."
The city must still complete environmental studies on the property, which are expected to be finished within a few weeks. Public hearings must also be held on the environmental report and proposed developer agreements.