With El Toro Sold, What’s Next?
With the for-sale sign removed at the former El Toro Marine base in Irvine, the new owner shifted its focus Thursday from development rights to last rites.
Having won possession of the 3,718-acre base and facing the task of redeveloping it, home builder Lennar Corp. took at least one small step Thursday. It reached an agreement with a cemetery developer to build a 74-acre resting place off Irvine Boulevard, as requested by Irvine officials.
Unresolved is who will build and operate a 248-acre exposition center and 45 holes of golf, among other projects.
“We haven’t made any long-term decisions,” said Bob Santos, Lennar’s regional executive vice president. He said the company had received queries from other companies wanting to participate in the Great Park project, but “we needed to win the bidding first.”
Lennar finished its acquisition of El Toro on Wednesday, bidding $649.5 million for four master parcels that it will redevelop as the Great Park, under Irvine’s zoning guidelines.
Support for Lennar came Thursday from the Irvine Co., which owns the property around the base. Lennar is building two residential projects for the company.
“We believe Lennar is a top-quality company with significant experience in Irvine and on the Irvine Ranch and that they’ll do an excellent job,” spokesman John Christensen said.
Among the nuts-and-bolts issues that come with purchasing the land, which Irvine has annexed, is figuring how to secure the facility, which has been guarded by the Orange County Sheriff’s Department under contract with the Navy.
Lennar officials already have decided to maintain month-to-month leases that a number of base tenants had for several years with the county and the Navy. They include the El Toro Equestrian Center, an 18-hole golf course, a storage site for recreational vehicles and a satellite campus of Cal State Fullerton housed in the former Air Wing headquarters building.
“We know it will take some time for the city and Lennar to work out the actual [development] plans, and to the extent that these other uses can operate, we don’t see any reason why they can’t continue,” Santos said. “If it turns out they don’t fit in [with redevelopment], we’ll find a graceful way to move them out.”
The businesses should have four more months’ reprieve. Escrow between the Navy and Lennar is expected to close in 120 days. All of the deed conveyances and leases with the Navy should be completed in July, with Irvine intending to begin demolishing the runways in fall.
The payoff for Lennar in acquiring the base will come with the construction and sale of 3,400 homes, which Lennar will build, and 3 million square feet of office, retail and industrial space. Lennar hopes to begin offering the first homes for sale in December 2008.
The center of the base, which is among land to be turned over to the city, will serve as the heart of the Great Park, with about 375 acres of parkland and 275 acres of wildlife and drainage corridors. The city also will develop a 166-acre sports park and a 249-acre museum district.
Amid the sprouting weeds and crumbling asphalt, the base has been host to some low-level activity continuously since its July 1999 closure. For three years, as the county planned an airport at El Toro, businesses were encouraged, including a child-care center, and weddings and events were held at the Officers Club.
Several hundred acres of idle land were leased to strawberry and bean growers. The county leased buildings for movie shoots and the runways to Road & Track magazine to test vehicle acceleration.
After voters decided in March 2002 to kill airport plans, the county ended its master lease with the Navy, which kept some interim uses going.
The Navy intended to cease all leases before the auction, but Santos said Lennar intervened on behalf of Cal State Fullerton to keep the campus and other sites open.
“For a lot of reasons, it made good business sense to keep revenue coming in,” he said.
“We have a list of ideas and see a lot of opportunities for temporary uses out there.”
*
(BEGIN TEXT OF INFOBOX)
Building the Great Park
Lennar Corp. will develop all of the former El Toro Marine Corps base. What happens next:
Immediate: Lennar Corp. and the Navy will enter into escrow of up to 120 days. Once the Navy officially accepts Lennar’s bid, the developer will have 15 days to pay at least 10% of the purchase price, or $64,950,000. Lennar already paid $10 million to qualify as a bidder in the auction.
*
Within 30 days of close of escrow: Lennar will sign developer agreements with Irvine and make an initial payment of $260 million in fees. Lennar will convey about 1,400 acres to the city, though some of the land will remain leased by Lennar until the Navy completes its environmental cleanup. Much of the 863-acre Parcel 3, for example, will not be conveyed by the Navy immediately because of cleanup issues. Irvine intends to lease the land to the Great Park Corp., the nonprofit entity the city created to manage redevelopment of the base.
*
By July 22: All conveyance and lease documents will be signed, and Lennar must make its final payment to the Navy.
*
Fall: Irvine intends to begin demolishing the runways and start work on streets, utilities and other infrastructure.
*
December: The Great Park Corp. will complete its design of the park areas, including a 370-acre park where the runways now intersect, and a 166-acre sports park.
*
Dec. 2008: Lennar expects completion of the first wave of new homes. Current house plan prices range from $350,000 to more than $2 million.
*
Source: U.S. Navy, Great Park Corp. Graphics reporting by Jean Pasco
