Guaranteed percentages on investment into Treasure Island, who gets what in hte
Base Realignment and Closure (BRAC) of the Naval Base.
Investors this agreement added another 4.5% to the investors to 22.5%
The Navy gets 35 % after the Investors get their cut and the
The city of San Francisco gets to pay for it.
We would like to highlight a breakthrough on negotiations for the EDC of Naval Station Treasure Island. Negotiations had been ongoing with the City since 2007. Due to the disparity of the DON [Department of the Navy] and City valuations, many compensation options were reviewed to convey the property while still obtaining Fair Market Value (FMV). The Navy had previously offered deferred compensation and percentages of gross revenue. The City had offered profit participation subordinate to a guaranteed return to developers. With adoption of language in the Fiscal Year 2010 National Defense Authorization Act, Congress enacted new EDC language that allows flexibility in transfer terms for EDCs including accepting profit participation structures.
Utilizing this authority, we were able to announce in December that an agreement in principle was reached with the City of San Francisco to convey 996 acres of the former Naval Station Treasure Island. The agreement guarantees $55M to the Navy paid over 10 years with interest and an additional $50M paid once the project meets a return of 18%. Then after an additional 4.5% return to investors (22.5% total), the Navy would receive 35% of all proceeds. This deal represents a unique opportunity to spur development, while still providing a guaranteed payment to the Navy as well as a share in the benefit of what both the City and the Navy expect to be a successful redevelopment and job generating project.
The environmental cleanup of Treasure Island is nearing completion. Once the City finalizes California Environmental Quality Act documentation and approvals with the Board of Supervisors in late 2010 or early 2011, we will be in position for the clean transfer of more than 75% of the base. The remaining cleanup includes the continued treatment of two small groundwater plumes and removal of low level radioactive contamination. These projects and the remaining transfer are expected to be complete well before the land is needed for subsequent phases of the redevelopment project.”
Prior BRAC Environmental Cleanup
“The Department has now spent about $4.3 billion on environmental cleanup, environmental compliance, and program management costs at prior BRAC locations through FY 2009. Our remaining environmental cost to complete for FY 2010 and beyond is approximately $1.4 billion. This includes $160 million cost growth which is due in part to additional munitions cleanup at Naval Air Facility Adak, AK and Naval Shipyard Mare Island, CA, clean up at Naval Station Roosevelt Roads, Puerto Rico, and additional long term monitoring program-wide. The increase is also associated with additional radiological contamination at Naval Station Treasure Island, CA, Naval Air Station Alameda, CA, and Naval Shipyard Mare Island, CA
Treasure Island California 