The Navy has sunk the idea of The City receiving Treasure Island for free or below market cost, placing a $105 million price tag on the
450 acres that have been essentially abandoned since the government left in 1997.
In addition to the $105 million The City has agreed to pay, the feds also will receive a share of potential profit from the hundreds of housing units planned on the island.
The City has been moving forward with a massive redevelopment project despite not owning the property.
The City plans to transform Treasure Island — a man-made, 450-acre plot of land — into “one of the most environmentally sustainable” communities in U.S. history, the Mayor’s Office said.
The project, which will take 10 to 20 years to finish, will include 6,000 residences, three hotels, a marina, a commercial town center and nearly 300 acres of parks and open space, the Mayor’s Office said.
City and federal representatives from the Bay Area had proposed a no-cost handoff from the Navy to San Francisco. When that idea stalled under the Bush administration, The City decided to wait six months for President Barack Obama to take office, hoping for the tide to change.
That did not happen, though.
Obama rebuffed the no-cost option in September, despite the idea that construction on the island could be a stimulus for the area by creating thousands of jobs.
The deal announced Wednesday is expected to be finalized within the coming months, and it will transfer all of Treasure Island and a portion of neighboring Yerba Buena Island to The City.
Mayor Gavin Newsom and Secretary of the Navy Ray Mabus announced Wednesday’s agreement following meetings in Washington, D.C.
Details of the agreement are being withheld until a contract is finalized. A statement released Wednesday by the Navy and The City said the deal includes a guaranteed $55 million payment for the land, followed by an “interim payment” of $50 million. It also requires San Francisco to pay “an additional share of potential future profits,” according to the statement.
Exactly what the share of profit would be is not being disclosed until The City and Navy work out specifics of the deal, said Michael Cohen, director of the Mayor’s Office of Economic and Workforce Development.
“It is fundamentally a fair deal for both The City and Navy,” he said. “It was important [for the deal] to be structured in a way that would allow us to attract the private capital necessary to construct the project.”
The deal will allow San Francisco, strapped with a $522 million deficit next fiscal year, to have no up-front costs — the initial $55 million will be deferred for a period of several years, Cohen said.
With an agreement, redevelopment plans could be under way in early 2011, he said.
Thousands of jobs annually and around 3,000 permanent positions will be created during the life of the project, the Mayor’s Office said.
The total costs of the redevelopment could reach $5 billion, with initial planning and infrastructure around $1.2 billion.
“Now that we know the basic terms of the Navy deal, we can finally begin the hard work of making sure The City’s grand vision for Treasure Island can be realized,” Newsom said in a statement.
Time of the Island in the Bay
—Treasure Island built from fill dredged from bottom of Bay in 1936-37; built to host the 1939 Golden Gate International Exposition
—In 1941, island leased to Department of the Navy
—In 1941, Navy gained title to island
—After exposition, island was scheduled to become an airport until Navy took control of land in exchange for property near Millbrae
—Starting in late 1980s, island’s old aircraft hangars used as sound stages for film and television productions
—In 1993, Congress decided to close Naval Station Treasure Island
—In September 1997, Navy ceased operations on the island and began the process of returning it to The City; part of island was transferred to the Department of Labor for a job corps center, and a portion of Yerba Buena Island was transferred to the Coast Guard for continued operations
—In early 2000, the Treasure Island Development Authority initiated a master developer selection process, culminating in the selection of Treasure Island Community Development LLC
—Final environmental impact report published June 1, 2006, for the transfer and reuse of the naval station
—In late 2006, plan to redevelop the island was approved by the Board of Supervisors — which included 6,000 residential units, three hotels, a marina, restaurants, and retail and entertainment venues — plus nearly 300 acres of parks and open space
—In 2008, negotiations aimed at setting a purchase price failed between The City and the Bush administration
—On Sept. 22, it was reported that President Barack Obama didn’t support a proposal that would release Treasure Island or other defunct military sites to municipalities for free
—On Wednesday, The City and the Navy announced deal for Treasure Island
—Infrastructure work on development is expected to begin in 2011
—By 2013, first homes on island scheduled to be ready
Sources: Navy, city and county of San Francisco