Vallejo City Council OKs deal between Nimitz Group, Lennar

August 06 2019

By JOHN GLIDDEN | | Vallejo Times-Herald

PUBLISHED: August 1, 2019 at 4:19 pm | UPDATED: August 2, 2019 at 5:41 pm

The Vallejo City Council has signed off on a deal that would see homebuilder Lennar Mare Island transfer 500 acres of land on Mare Island to The Nimitz Group.

While the council’s approval doesn’t close the deal between the two private businesses, it does allow for the transfer of land and development rights. Two separate agreements between the city and Lennar from 1999, and 2001, respectively, stipulate that city approval is required for such a transaction.

“It continues to be so refreshing to work with a city government that is en mass, holistically, really trying to help out and get this project done,” said winemaker Dave Phinney, with The Nimitz Group.

Terms of the deal were not discussed during Wednesday’s council meeting. Both Lennar and Nimitz have declined to provide the purchase price.

Nimitz is a partnership between Phinney and billionaire investor Gaylon Lawrence, Jr. Phinney isn’t a stranger with Mare Island, having opened Savage and Cooke Distillery recently.

Will Morat, assistant to the city manager — economic development, told the council that an independent accountant hired by the city looked at Nimitz’s assets and the purchase price. The accountant concluded Nimitz had the capital to buy the 500 acres of land.

Morat also said the need for $117 million in infrastructure improvements for South Mare Island was also included in the fiscal analysis. Those improvements included water, storm/sewer lines, and roads.

A handful of the councilmembers said they were optimistic about Mare Island’s future under The Nimitz Group but they were quick to point out the need to be cautious, as well.

“We need to get this right,” said Councilman Hakeem Brown.

Brown said he hasn’t seen much growth on Mare Island since the base closed. He argued the importance of having the island work for the community by creating 5,000 livable wage jobs and developing workforce housing. He also asked Nimitz to continue its outreach to the community.

“I can’t say how excited I am about this,” Councilwoman Katy Miessner said about the deal. “I think, we as the city, have worked hard to create the economic soil, environment for this kind of development to come in.”

The council also approved a fourth amendment to the Exclusive Negotiation Agreement executed between Nimitz and the city for 157 acres of land in the northern part of the island.

The goal is to give Nimitz Group, which first signed the ENA in July 2018, more flexibility as it develops plans for the future use of both North and South Mare Island. Morat noted that North Mare Island, which is infill put in place by the Navy over the years, will require surcharging, or the process of placing large amounts of soil on the area to strengthen the ground.

Over the years, several proposed plans to redevelop the North Mare Island haven’t worked out. The plans have ranged from building a film studio, Touro University California opening up a cancer research center, and Faraday Future — the Chinese-backed electric car startup opening up a facility on the land.

Nimitz previously proposed opening a 56-acre media campus for Film Mare Island Film Studio, along with 15 acres for a wine processing facility in North Mare Island.

Mayor Bob Sampayan said he was pleased that Nimitz is looking to diversify the tenants on the island.

“(I’m) absolutely excited what the vision is from the Nimitz Group,” he said.

In June, Nimitz completed the purchase of the Mare Island Golf Club which operated on the southern end of Mare Island. The business has declined to state how much it paid to acquire the 170 acres.

The Times-Herald reported in March that the property had been listed for sale for about $4.75 million by the then owner Konmer Venture, LLC.

Part of the deal between Nimitz and Lennar includes Lennar Mare Island completing the environmental remediation process for several sections of land throughout the island contaminated by the Navy. Funding for remediation comes from a $31 million settlement with the Navy. So far, 98 percent of the areas requiring remediation have been cleaned up, city staff said.

Tom Sheaff, vice president and general manager with Lennar, said the potential deal represents the next phase for Mare Island.

“This is an opportunity that has been years in the making, a culmination of a lot of hard work,” he told the council.

Under Lennar’s stewardship, it has constructed 300 homes, expanded the island’s commercial output with 110 businesses, and 2,900 full-time employees.

Since closing as a military base in 1996, the city has desired to re-develop the land into an economic force, which employed thousands of workers living in the city.

“Once the clean-up has been completed, and we’re nearly at that stage, the potential out there is to hold much more,” Morat said. “I think, ultimately, the city is looking for that kind of an economic engine to be out there on the island — in an environment that sustains this city for the next century to come.”