New owner at Vallejo’s Mare Island reprioritizes redevelopment master planNovember 02 2020
THE NORTH BAY BUSINESS JOURNAL
November 2, 2020, 10:53AM by JEFF QUACKENBUSH
Prepping a second building to become an advanced manufacturing plant for homebuilder Factory_OS has given the redeveloper of Vallejo’s Mare Island a taste of what’s to come in repurposing the former Navy shipyard for commercial use.
The Nimitz Group, made up of local vintners and distillers, inked its deal with the city of Vallejo to take over reworking the rest of the 3.5-mile-long island late last year from Lennar Mare Island. Nimitz brought in Southern Land Co. as master developer. Southern Land then started to evaluate the empty buildings on the island and was encouraged by what it found.
“A lot of the unoccupied historic buildings could house digital design and manufacturing firms like Factory_OS,” Thomas D’Alesandro, president of West Coast operations for Southern Land.
The team, which included real estate advisory JLL, in the past two months identified 19 office, warehouse and factory buildings, totaling 1.34 million square feet, as having the highest priority for reworking to house new tenants.
“We are looking at their repurposing some for their historic uses, such as factories reopened as factories, but updated to advanced manufacturing like Factory_OS, and others to new uses, like classic 19th century warehouses converted into hotels,” D’Alesandro said.
Of the 4.5 million–5 million square feet of existing buildings on Mare Island, around 3 million square feet already are occupied.
The expansion lease by Factory_OS for the 125,000-square-foot 1275 Nimitz Ave. building, inked in the first quarter of this year, accounted for the last remaining Mare Island space that was deal-ready, according to D’Alesandro.
“It was a test case on how long it would take for these other buildings,” D’Alesandro said. Key to deal-making was a realistic timetable for occupancy and accurate renovation budgets, he said.
It’s been a slow evaluation process, because the Navy didn’t submit plans to the city for what was built on the island before the facility was turned over to Vallejo in 1996. The shipyard opened originally in the 1850s. Some brick buildings need seismic upgrades. And plumbing needs to be extended to buildings that lack restrooms, as the shipyard had relied communal facilities.
Among the priority buildings for renovation is an office building with 40,000 square feet total and five floors each with 8,000 square feet.
“We’re doing market studies on adapting the spaces to accommodate demand as we see it,” D’Alesandro said.
This marketing study will be used to adapt the design work done by HOK and input received from community meetings over the past year. D’Alesandro updated the City Council on Mare Island progress in July and is set to do so again later this month.
“I said to HOK to put their pencils down because we want to better understand the market drivers to shape the master plan,” he said.
North Mare Island plan hits a snag
And the timetable has been pushed back even further for redevelopment the 157-acre north end of the island, where The Nimitz Group first got involved with the former shipyard via plan for over 2 million square feet of wine production and other commercial space.
D’Alesandro has asked the city to revisit the development agreement reached with The Nimitz Group for the north end, because geotechnical studies by NGO have discovered potential for liquefaction because of poor soils, danger of sea level rise from proximity to the Napa River, and a nearby seismic fault.
“One of groups that was interested in North Mare Island after understanding the geotechnical issues realized it will not work for their timetable because it will take few years with the surcharging process and importing good dirt,” D’Alesandro said.
That process involves transporting in high-quality soil, piling it up high enough to achieve a desired density after the dirt underneath is compacted. The result is ground that is suitable for laying foundations for commercial buildings. A similar process was undertaken in the past two years at the Napa Pipe project a few miles upriver.
This fall, The Nimitz Group signed a term sheet with Vallejo for the north Mare Island property that would allow further removal of obsolete buildings, environmental cleanup and enhancing security, according to city spokeswoman Christina Lee.
“This would also trigger the next step of a purchase agreement, timing for soils remediation, master plan update, infrastructure updates, and the redevelopment of north mare island into a new exciting place to live and work,” she wrote in an email to the Business Journal.
The Mare Island upgrades are paralleling other economic-development initiatives elsewhere in the city, Lee said. That includes the Solano360 collaborative initiative with the county to redevelop the old fairgrounds, working on a number of waterfront development proposals, revitalizing the downtown and responding to development inquiries.
D’Alesandro said getting plan for the north portion right will be key because of what its location means to Mare Island.
“It’s the front door,” he said. The main entry points to the island are Highway 37, the causeway to Vallejo proper and the ferry terminal, the the first two are at the northern end.
Jeff Quackenbush covers wine, construction and real estate. Before the Business Journal, he wrote for Bay City News Service in San Francisco. He has a degree from Walla Walla University. Reach him at email@example.com or 707-521-4256.