In Vallejo, a Lesson in Converting El Toro

Times Staff Writer

There's a lesson here amid the rusting cranes and vacant warehouses of Mare Island Naval Shipyard, the 152-year-old military base that once dominated this bay-front Northern California city: Nothing happens fast on a closed Navy base.

It's a lesson that Irvine, some 400 miles south, will learn as it begins development of the former El Toro Marine base, anchored in the heart of Orange County.

"You have to have a lot of patience, and you have to have a good plan and stick to it, within reason," said Councilman Gary Cloutier, a San Francisco attorney who moved to Vallejo eight years ago seeking refuge from the Bay Area bustle.

His restored 1898 Victorian mansion sits atop a knoll overlooking the shipyard, which was closed in 1996. From his back patio, he has a perfect view across the narrow strait as the setting sun illuminates a junked warehouse, glinting from rows of grimy windows. Crews built submarines in the massive structure, just one more job in the life of a base that began in 1854 with horses and cannons and ended its days handling nuclear subs and warheads.

The 5,223 acres of former Navy property is owned by Lennar Mare Island, a subsidiary of Lennar Corp., chosen by Vallejo in 1997 as the site's master developer. In 2002, Lennar took title to 650 acres on the island, where it says it will build homes, shops, restaurants and businesses. The company got the land free but promised to invest $260 million in streets and utilities, historic preservation and building renovation.

The project is a striking parallel to Lennar's interests to the south: the mothballed 3,718-acre former Marine Corps Air Station at El Toro, which the developer won at auction in February for $649.5 million. Like Mare Island, El Toro is an enormous piece of land riddled with contamination but holding great potential.

In Vallejo, residents are banking that the property's development will revitalize a town that had found financial stability and its civic identity in a shipyard that stared back at them from Mare Island. In Orange County, planners hope to create a parkland core within a ring of homes and businesses, on a par with San Diego's Balboa Park or New York's Central Park.

For Lennar, closed military bases have become a cottage industry. Since acquiring the Mare Island acreage, Lennar has won bids to develop homes and offices at the closed Hunter's Point Naval Annex in San Francisco and built 16 million square feet of industrial and office space on portions of March Air Reserve Base near Riverside. It is also negotiating to build on the former Treasure Island Naval Base in San Francisco.

The spending spree is according to plan. Company officials deliberately eyed closed naval bases in California because of their attractive locations. Though the process has been slow and complicated, thanks to toxic contamination and dissension over how the land should be used, the long-term payoff could be handsome.

"Mare Island was our first deal, and the first ones are always slower because everyone is going through a learning curve -- even the Navy," said Emile Haddad, Lennar's regional president for California. So far, about 2,000 people work on the island in 70 businesses -- a fifth of the expected total.

Mare Island and El Toro will be lightly developed, with much of the land set aside for wildlife habitat and open space. Lennar will build on about 900 acres of the 5,223-acre Mare Island (it will receive 250 more acres in July). At El Toro, about 1,200 of 4,700 acres will be commercially developed.

One clear difference lies in what the Navy left behind: Lennar inherited some 502 historic "resources" on Mare Island, including a 1901 chapel with Tiffany stained-glass windows and a 1911 dry dock, from which Jupiter -- the first Navy aircraft carrier -- was launched. At El Toro, which opened in 1943, there isn't much to be saved.

The reconstruction efforts at the former bases face hurdles more complex than most developments. It will take years, for instance, to clean up the environmental mess from decades of military operations. Residents, meanwhile, want assurances that progress is made without draining local government funds.

Watching more than eight years pass without much to show has been frustrating, some Vallejo residents say. Mare Island's eastern edge, a stone's throw from the city's redesigned waterfront and public ferry, has the same gritty look it did for decades. Shipyard businesses lease space in an area planned as a waterfront district of restaurants and tourist boutiques.

"I think someone with big money has gone in and is going to make bigger money," groused Clair Crawford, a former Idaho resident who moved to Vallejo 15 years ago. He opened his used-car dealership in town a year before the base closed, then watched business evaporate as the Navy -- and the local economy it fueled -- left town.

Hidden well behind the dry docks and Quonset huts sit the first 55 of Mare Island's new homes, built with a view west toward San Pablo Bay Wildlife Refuge. Landscaped promenades with gutters and decorative street lamps announce entry to the neighborhood, an oasis that still must be reached by driving through the base's lingering blight.

About half the single-family detached houses are sold, with occupancy set for June. Nearly 3,000 people are on a waiting list for the rest, many from Vallejo looking for "move-up" housing, Lennar officials said. The first houses sell in the $500,000-to-$650,000 range -- attractive prices in the expensive Bay Area market. Later units will include hundreds of apartments and condominiums, including lofts with a bay view.

Jack Sykes said he had a good view of the continuing construction while helping his church restore an old chapel on the island. His complaint is that there won't be enough lower-cost housing for someone like him, a father of two on a fixed income.

"For me, they're pricing the island too high," he said as he walked his Pekingese, Princess, along the waterfront.

The grumbling isn't unexpected, said Vallejo Mayor Anthony Intintoli. He created a 53-member committee in 1996 to figure out what to do with the land once the city lost its fight to keep the base open.

The consensus, which didn't please everyone, was a reuse plan heavy on office, industrial and retail space to help replace the 10,000 jobs that were lost when the Navy pulled out. The idea was to create a magnet in the rising Bay Area housing market where people could live and work, or hop on the ferry to San Francisco to avoid traffic.

The biggest challenge, Intintoli said, was cleaning up base contamination quickly. A local congressman, George Miller (D-Martinez), persuaded the Navy to set aside $80 million for cleanup while the city negotiated for $28 million more to cover police and fire protection. The Navy also agreed to let Lennar take charge of the cleanup and promised to pay the difference if the money didn't stretch far enough.

"We wanted to control the process and get the property back on the tax rolls," the mayor said.

Indeed, as construction proceeds, Lennar's environmental contractor, CH2M Hill, is stripping lead paint from Mare Island's buildings and removing contaminated soil. So far, the company has taken 1,600 soil samples to confirm that the land is clean.

Two years ago, Victor Zayas bought a piece of the old base from Lennar for his company, Earthquake Protection Systems. Four of his 10 acres remain off-limits because they haven't yet been cleaned, but "I'm not in a hurry," he said.

In a former Navy warehouse, Zayas' company builds seismic bearings that protect buildings from earthquake damage, a $10-million-a-year business. He bought the building and a couple of 40-year-old cranes that he patched up to work again.

"It's hard to find any space for a business like this in urban areas," said Zayas, who spent six years looking to relocate after zoning changes squeezed him out of Emeryville, also in the Bay Area.

Another pending landowner is Touro University, whose 44-acre leased campus offers graduate medical degrees and teaching credentials. The private institution moved to Mare Island in summer 1999 after growing out of its rental space in San Francisco. It is negotiating to buy the land.

But the job of removing lead-based paint has so far kept students from living in the historic Navy quarters on the campus. Administrative offices are housed in a Navy women's barracks built in 30 days in 1943 with scrap lumber.

Touro spent $1.4 million to gut and refurbish it, some of the $21 million it has spent on its new home.

"The hardest thing to accept was the timeline" for development, said Richard A. Hassell, vice president of administration for Touro, who sat on the mayor's Mare Island Futures Committee. The Navy's departure "was devastating to the local economy. You could see it in the for-sale signs all around town. I think all of us wanted to see things happen faster."

Lennar's experience with such challenges bodes well for El Toro, Vallejo and company officials said. The company has worked for years with federal regulators -- who also are responsible for El Toro -- monitoring the cleanup at Mare Island.

In Irvine, the company takes over a base already zoned for new uses, with most of the land ready for its civilian transformation.

"To be perfectly frank, the best thing that happened to Vallejo was, the Navy left," said Cloutier, the Vallejo councilman. "Now we're forging our own identity."

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