Groundwork Laid for Developing El Toro
The city of Irvine has approved general guidelines of a redevelopment zone for the closed El Toro Marine base that could provide as much as $978 million to turn it into a complex of parks, homes and businesses.
The money will come from borrowing against tax increments over the next 30 to 45 years that Irvine officials expect the 3,700-acre facility to generate once it is redeveloped and property values rise.
By establishing a redevelopment zone, the city is assured of a funding source should it need more money for preparing the parkland or cleaning contaminated portions of the base, said Tina Christiansen, Irvine’s director of community development.
Last week, the Irvine City Council, acting as the redevelopment agency, approved the guidelines in designating most of the base a redevelopment area.
The plan is now open to public review and comment. The council will vote on the plan in December.
The Orange County Great Park is Irvine’s vision for the decommissioned base, once the center of a decade-long political debate over whether to turn it into a commercial airport.
Irvine, which annexed the land last year, hopes to turn the base into 3,625 homes, 3 million square feet of commercial and industrial space and 2,800 acres of parks and public facilities. Land for a separate 1,000-acre open space to the north of the base has already been set aside by federal authorities.
The Navy is expected to auction the base in January, selling the land in four parcels.
Developers who buy the lots will be required to sign an agreement with Irvine if they want to take advantage of full development rights on the land.
The agreements call for the developers to pay $200 million to $260 million to the city for infrastructure costs such as roads and utility lines. The eventual homeowners and other property owners in Great Park also will be assessed to fund $210 million in bonds for public facilities on the parkland.
But that may not be enough to ensure the redevelopment of the base, Christiansen said. The redevelopment zone opens another source of funds for the project, she said.
“There are no guarantees what the costs of infrastructure will be,” Christiansen said. The borrowed money could also pay for environmental cleanup of the base, she said, if the Navy is slow to complete the work. About a quarter of the base is polluted or needs to be studied for possible contamination.
The Navy is required by federal law to clean up the land before handing it over for civilian use, but some observers have questioned whether there would be enough money for the task.
The redevelopment zone would allow Irvine to tap a portion of the expected increases in tax revenues as the value of the properties increase.
The redevelopment agency then would borrow against that money to issue bonds.
According to the city’s plan, the redevelopment agency would be able to borrow a maximum of $2 billion over the life of the redevelopment zone, up to 45 years.
Some local real estate analysts have estimated the base land to be worth from $800 million to $1.2 billion.