In Largest Real Estate Competition in US Navy’s History – NAVWAR Is Now Officially on the Block

by on November 16, 2022 · 0 comments

in Military, Ocean Beach, San Diego

Edited from BusinessNews, November 16, 2022

It’s official. The United States Navy is officially seeking bids to renovate NAVWAR, the 70.3-acre complex in San Diego’s Midway District, launching the largest real estate competition in the federal agency’s history.

On Tuesday, the Navy released  the RFQ, the request for qualifications for the lease and development of the NAVWAR property, which includes Naval Base Point Loma, and Old Town Complex. The 182-page solicitation published on federal procurement site formally puts the property on the market and invites development teams to respond by February 7, 2023 with their high-level vision for the site and financing plans.

In April 2023, the federal government will narrow down the field of proposers and issue a follow-up request for proposals to the three short-listed teams. The Navy is expected to take a final decision before the end of that year.

The Navy is offering the land for “in-kind” consideration, meaning it will exchange the land, in exchange for cash, for new facilities — or 1.43 million square feet of replacement administrative, laboratory and warehouse space, and 3,208 parking spaces – built first and at no cost to the agency. The federal government’s priority is to transfer the asset through a 99-year ground lease, subject to approval by the Secretary of the Navy.

“Potential private redevelopment at (Naval Base Point Loma, Old Town Complex) would bring additional economic benefits to the area by consolidating Navy activities into modern facilities on a smaller footprint, allowing the remaining NBPL OTC to be developed for other productive uses.” The document states.

Naval Base Point Loma, owned by the Navy since the mid-90s, consists of two large parcels on Pacific Highway in the Midway District in the Old Town Complex.

The base is home to the Army’s Naval Information Warfare Systems Command and the Naval Information Warfare Center Pacific divisions. The group – a mix of 5,000 full-time and contract cyber security professionals – is spread over 1.68 million square feet of space and works in World War II-era hangars that have been deemed obsolete by the government.

The Navy claims the Cyber Warfare Command contributes $3.5 billion annually to the San Diego economy.

The federal land falls within the Midway Pacific-Highway Community Plan area, but is not subject to local zoning laws or building height restrictions.

The solicitation encourages proponents to come up with plans that fit the surrounding areas.

However, the site may be able to accommodate:

  • thousands of homes,
  • provide ample space for large corporations and community shops,
  • and make room for hotels in towers up to 350 feet tall, according to preliminary environmental analysis.
  • The draft plan, released in May of 2021, studies 19.6 million square feet of development spread over 109 buildings.
  • The environmental work is sidelined until the Navy chooses the winning bidder.
  •  the federal agency’s priority is replacement facilities, which must, at a minimum, be valued at the fair market value of the leasehold interest, the document states.

Proposing teams also have some flexibility in how they accommodate facilities requirements, although the Navy said it wants 887,568 square feet of space and 3,208 parking spaces at the NAVWAR site, and another 541,068 square feet for warehouses, labs and Laydown Space Off-site location.

The potential public-private partnership, which the Navy has described as the largest in its history based on anticipated dollar value, follows the agency’s 2006 agreement with Manchester Financial Group for the 12-acre Navy Broadway Complex. The deal ultimately resulted in a 17-story, waterfront office building for Naval Area Southwest, Naval Facilities Engineering Command Southwest, and Naval Area Southwest Reserve Component Command. The remaining property, save for one hotel block reserved by Manchester, is currently being developed by life science real estate developer IQHQ.

Earlier this month, San Diego Mayor Todd Gloria submitted a letter to the Navy expressing the city’s “enthusiastic support” for the NAVWAR revitalization effort.

“This project is a once-in-a-generation opportunity for the Navy to provide state-of-the-art facilities to support NAVWAR in advancing mission readiness as well as help the San Diego area advance our goals of housing expansion Promote economic growth and increase employment near mass transit, Gloria wrote in the letter.

The Navy will host a pre-proposal conference and site tour on December 7, 2022.

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