Deal reached on Treasure Island

The Navy and the city of San Francisco reached a broad deal Wednesday on the transfer of naval station Treasure Island for local development.

The deal comes after years of stalled negotiations over the transfer of the former naval base.

San Francisco mayor Gavin Newsom met with Secretary of the Navy Ray Mabus on Wednesday in an effort to strike the deal, as reported by The Hill on Tuesday.

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After the meeting the Navy released the “broad outline of terms” for the transfer of the former base, which sits atop a man-made island.

The terms of the agreement include a guaranteed payment to the Navy of $55 million, followed by an interim payment of another $50 million plus an additional share of further profits.

“This agreement is good for the American tax payer, will create jobs in the San Francisco region and will effectively transition Treasure Island to productive civilian reuse,” Mabus said in a statement.

Newsom also trumpeted the agreement.

“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,” he said.

The new understanding would follow years of stalled negotiations and numerous interventions from House Speaker Nancy Pelosi (D-Calif.), who has personally fought and engaged with the Navy over the land transfer. California’s two Democratic senators, Dianne Feinstein and Barbara Boxer, also lent their weight to the discussions in support of San Francisco.

Pelosi hailed the deal in a statement.

"Today’s Treasure Island transfer agreement means the city can quickly move forward with substantial redevelopment plans that include essential infrastructure, open space and affordable housing, as well as significant contributions to industries central to San Francisco’s economic vitality – tourism, retail, restaurants and entertainment,” she said.

She said the deal would lead to $5 billion in public and private investments that would generate thousands of jobs.

“These forthcoming economic benefits will provide a welcome boost to San Francisco’s economic recovery, and to the entire region.” 

San Francisco submitted a request to buy the Treasure Island property for an economic development project, and has been squabbling with the Navy over a fair market price for the last six years.

The Navy had appraised the value of the property at $240 million, while San Francisco appraised it at $14 million. The city recently commissioned an independent appraisal by auditor KPMG that pegged the value at $22 million, which the city offered to pay to the Navy. The Navy had consistently argued that the city is not offering a fair market price for the land.