The County of Orange is seeking a developer to help turn a 100-acre parcel of largely vacant land at the former El Toro Marine Corps Air Station in Irvine into a mixed-use project.
County officials this week are expected to invite bidders for the opportunity to work with them on the entitlement and development of the site, which runs just east of the Santa Ana (I-5) Freeway, next to the Orange County Great Park.
The county-owned site has the potential for a variety of retail, hotel, office, apartment and other uses.
The Wild Rivers Waterpark is expected to relocate from the Irvine Spectrum and take about 15 acres of the land.
The aim is to select a qualified master developer or a development team by this summer, according to James Campbell, manager of land development for the county. The county would then negotiate the details of the scope of work and a contract.
The county is looking to maintain ownership of the land, and is leaning toward setting up a 99-year ground lease for the site.
“Lots of people said, ‘Don’t sell—it’s an irreplaceable piece of land in the middle of Orange County,’ ” Campbell said.
Developers could expect to see about $9 million in annual rents from tenants at a mix-used project, assuming it is built out to its “highest and best use,” according to documents prepared for the county by the public institution practice of Chicago-based brokerage Jones Lang LaSalle, which is advising the county on the land.
“It’s not your typical real estate deal,” said one source who is familiar with the plans and is interested in putting together a team of mostly local developers for the project, depending on how a ground lease would affect the project’s bottom line.
The county has more than $300 million in redevelopment financing available for the project, according to Campbell.
Wild Rivers’ Plans
Development for some of the land could begin next year, although a timeline on a bulk of the site’s construction depends on what uses are chosen for the land. Another factor is the pace of infrastructure work in and around the Great Park, which would share some roads, mainly a reworked Marine Way, with a mixed-use development on the site.
Wild Rivers executives said earlier this month that they would like to begin construction next year on a nearly 15-acre portion of the land they have eyed. They have not yet signed a lease, but said they expect to spend $30 million to build there, and hope to open in May 2014.
The 100-acre site is near the southwest edge of the 1,300-acre OC Great Park site, and is adjacent to the Irvine Metrolink train station. It’s also a short distance from the Eastern (133) Toll Road and Santa Ana (I-5) Freeway.
The property currently holds a handful of older, vacant warehouse structures that would be torn down to make way for any new development. A good amount of environmental remediation work is likely needed to get the land ready for any new construction.
The county was given ownership of its 100-acre parcel as part of the 2003 annexation of the former Marine base by the city of Irvine.
The mixed-use project proposed for the land is not directly affiliated with the 3,700-acre Great Park Neighborhoods development project, which is being overseen by Aliso Viejo-based FivePoint Communities Management Inc.
Great Park Neighborhoods calls for some 5,000 homes and 1.2 million square feet of commercial space in its first phase. The developer broke ground on its first housing project a little over a month ago.
A transit-oriented development portion of the Great Park Neighborhoods, which is still several years away from moving ahead, would be built near the 100-acre land parcel.
Lease Raises Questions
The project is likely to draw interest from a variety of retail, hotel, and other commercial developers, based on prospective uses for the site, one of the larger OC land parcels to go on the market in the past few years.
The county has been exploring uses for the land for close to five years. Initial ideas included using some of the land for museums, a central library for the county, an office incubator for nonprofits, an extreme sports facility, an RV parking lot and a boarding school.
The county ultimately decided that a bulk of the nonprofit and public sector uses were not viable options for the site.
Private developers have remained interested in the land, according to Campbell, although a ground lease for the site could scare off some, according to documents prepared for the county.
Recent ideas appear to be centered on a handful of for-profit uses for the site, which would be built in phases. Big retailers such as a Bass Pro Shops, REI or Cabela’s have been cited in county documents as potential anchors for a retail portion of the site.
Other possibilities mentioned include limited-service hotels, low-rise office and industrial projects similar to what’s seen in the Irvine Spectrum, and apartment complexes.
In 2008, when the county was still exploring selling the land outright to a mixed-use developer, it was estimated a sale of the land could generate close to $180 million.
Sources contacted by the Business Journal last week declined to estimate the land’s value now, especially considering the county’s likelihood of a ground lease.