DEPARTMENT OF THE NAVY
OFFICE OF THE ASSISTANT SECRETARY
(INSTALLATIONS AND ENVIRONMENT)

Allison Hart
City Manager
City of Irvine
1 Civic Center Plaza
PO Box 19575
Irvine, CA

Dear Allison,

    On April 25, 2002, the Department of the Navy, with the General Services Administration (GSA), initiated discussions with the City of Irvine with the goal of avoiding conflicts between our plans for the disposal process of the former Marine Corps Air Station (MCAS) El Toro and the City's plans to annex the property within its Sphere of Influence and entitle it consistent with the spirit of Measure W.

    The Navy has made clear from the beginning its intention to dispose of the base property through a public sale to the highest bidder in the most expeditious manner possible.  Similarly, the City of Irvine has made clear its intention to ensure the orderly development of the property and the implementation of the Great Park Plan without cost to the taxpayers of Orange County.  By attending to these issues of mutual interest, I believe that, when viewed together, the Navy's conveyance strategy and the City's proposed land use plan will best meet the interests of the Nation's taxpayers while simultaneously keeping faith with Measure W.

    The Navy, as the property owner, will use the sales and marketing services of the GSA to assist in the public sale process.  We are confident that the City of Irvine will continue to pursue its decision, as the lead agency, to annex the portion of the base property located within its adopted Sphere of Influence and expeditiously entitle the entire El Toro property for development.

    The Navy is committed to an orderly sale to produce the highest value for the taxpayers.  We are also interested in seeing that the City of Irvine puts in place an effective development plan for the property.  There is very strong evidence that such a plan will bring certainty and confidence to the prospective buyers during the bidding process and will help bring higher values to the sale.

    The Navy and the GSA will market the property as multiple parcels, not to exceed six, but prospective buyers will be allowed to bid on more than one parcel and/or submit one bid for the entire property.  The intent is to allow the public sale process to determine the highest possible value for the property, whether one parcel or multiple.  Regardless, if multiple parcels are sold through the auction, the Navy will ensure that the property conveyances occur simultaneously, unless specific circumstances dictate otherwise.

    We understand that the City of Irvine will pursue annexation of the base and, should its application for annexation be approved, entitle the property for development.  We further understand that the City of Irvine will help facilitate the auction process by providing the prospective bidders with as much open access to information regarding future land use as possible.

    We also understand that the City will pursue a two-tiered entitlement strategy to create development intensity incentives for prospective buyers in exchange for their commitment to dedicate land for park use and pay their fair share of infrastructure development and ongoing maintenance costs.  This strategy ensures that the costs of the park plan will be borne by the project and its owners, not by the taxpayers of Orange County and the City of Irvine directly.

    Although future land use controls for the base are entirely up to the jurisdiction with zoning authority under California law, we appreciate that the City has shared some of its plans as they are being developed, as it would for any landowner.  We are heartened that the City's concepts have evolved in a manner that will return higher values for the taxpayers.  We appreciate greatly the City's cooperation in this process, and we look forward to additional discussions on the process in the future.

    Based on the discussions to date, the Navy supports fully the land use plan put forth by the City of Irvine, known as the Great Park Plan.  I note, however, that although the Navy supports the City of Irvine's land use plan and entitlement strategy, it is the City's sole responsibility to carry out its planning efforts for the base property.

    After the bidding process is complete, the Navy will convey the parcel or parcels to the winning bidders by quitclaim deed.  While we may market the property before annexation, we intend to defer the conveyance of the auctioned properties until after the annexation to the City of Irvine is complete and the development plan is in effect.

    We still need to refine an implementation timeline and how we might release the details of the conveyance plan and the land use plan.  We plan to continue our mutual discussions with you and the GSA concerning those timelines.  As for the initial release of conveyance and land use details, I believe your suggestion to do it at a press conference early on the afternoon of July 23, 2002 prior to the City Council meting that day is excellent.  While the date is still tentative, I have already spoken with Secretary Johnson and Gordon Creed of GSA, and they like the idea and have added it to their schedules.  As for the location, I recommend we use a site at the former Marine Corps Air Base.  It is a central location, and it will give the media and other citizens a chance to see part of the very facility we will be discussing.

    To that end, I have also spoken with our office in San Diego and asked them to initiate a planning effort for that date and present me with a proposed schedule and exact location for the event.  They will coordinate closely with your staff.  I will discuss all of this further with the Navy and GSA staffs and get back to you to arrange a conference call between all of us to finalize the details.

    Thank you again for your help and cooperation.

                                                                                                    Sincerely,

                                                                                                    Wayne Arny
                                                                                                    Principal Deputy