By Christina S. Porter
(This column is a continuation of last week’s “New Developments Will Make Impact Felt In SoCal.” This week’s installment deal with two additional Master-planned developments in Southern California.) MCAS-TUSTIN REDEVELOPMENT PROJECT The Marine Corps Air Station-Tustin site (MCAS-Tustin), located southeast of downtown Los Angeles, closed in 1999. The City of Tustin reached agreement with the Department of Navy in 2002 for acquisition of approximately 1,200 acres of the former 1,600-acre facility, with the Navy also recently selling about 240 acres of the site through a competitive-bid process. The city is now in the process of converting those portions of the site within Tustin into a major new master-planned community. Approximately 95 acres of the former facility are within the City of Irvine, where residential uses also will be developed. The site is one of the largest remaining tracts of developable land in central Orange County, and is surrounded by a rich fabric of transportation, commercial and cultural facilities.
Within portions of the site controlled by the city, Tustin is selling the land already entitled, which reduces the risk factor for the developer and increases the value of the land. Residential land prices realized by Tustin are more than $1 million per acre. Major developers currently active or interested in the project include Centex Homes, Shea Homes, Shea Properties, Lennar, William Lyon Homes, Vestar and John Laing Homes. Over the next 15 years, a total of 4,600 residential units will be built, housing a population of approximately 13,000 persons. The project will also include over 9 million square feet of commercial business space, a combination of office, research & development (R&D), light industrial and retail space, employing a total of approximately 24,000 employees. In addition, there will be two community colleges on the site, an 84-acre regional park and a variety of community and local park and recreational uses. The first projects are just starting to come on-line. Model homes for a 376-unit development by Laing Homes opened in February, and drew more than 10,000 visitors. The tenant-interest list for R&D and office properties to be built on the site is more than 700 parties.
MCAS-EL TORO “THE GREAT PARK”
Another Marine Corps Air Station conversion in Orange County is taking place at the former MCAS-El Toro Base, which is just six miles northeast of MCAS- Tustin. However, the approach being taken for this project is significantly different. The density at build-out will be much less, and land ownership will not transfer directly to the local city (Irvine). Some 3,900 acres of the 4,700-acre site will be devoted to open space, education and other public uses (hence, the name for the project is "the Great Park"). By comparison, Griffith Park is 4,100 acres, Balboa Park is 1,200 acres, Golden Gate Park is 1,017 and Central Park is 843. Public uses will include a college or university with 7,800 students and 1 million square feet of cultural and institutional facilities. Park land and open space will consist of various wildlife corridors. Only 800 acres will be developed for residential and commercial uses. However, these 800 acres will still generate considerable new real estate product: 3,600 residential units, 2.5 million square feet of research & development space, and 375,000 square feet of commercial/retail space. The private development also will generate the assessment revenues needed to support the public uses.
Unlike MCAS-Tustin, control of the land will pass directly from the Department of the Navy to not more than four private-sector owners. However, those owners will have to adhere to the land-use designations made by the City of Irvine and sign a Development Agreement which calls for much of the land to be dedicated to open space and other public uses. The agreement will also require participation in public financing for the development and maintenance of the park infrastructure and public areas, totaling $371 million. Those land sales are scheduled to take place in the last half of 2004. The first new product is scheduled to come on-line in 2008, and build-out is expected in 2025. (The above is an excerpt from NAI Capital's “Spring - 2004 Market Perspective.” Call 310-806-6104 for a copy. Christina S. Porter is a Vice President at NAI Capital Commercial in West Los Angeles and specializes in the Sales and Leasing of office and industrial properties in Santa Monica and West LA. She 310-806-6104 or at)
Originally published in the Santa Monica Daily Press print edition on May 12, 2004. Read the original PDF.