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Vallejo Mare Island redeveloper’s plan to clean up key north entry draws criticism

As companies on Vallejo’s Mare Island add hundreds of jobs this year, the new redevelopers of the former naval shipyard are moving to make the burgeoning employment engine a better-looking and more flexible place for business growth.

But that plan, part of what’s expected to be more than a decade of additional building rehabilitation and land remediation work, has prompted questions about transparency of the public-private dealings.

Last November, an investment group of Napa Valley vintners and distillers took over ownership of hundreds of acres at the southern end of the island. In October 2019 the City Council approved a term sheet with the new owner, The Nimitz Group LLC, on the eventual purchase of 157 acres at the north end. Nimitz a year earlier was picked as the lead redevelopment contender for the north island.

Questions about the island deals

Then this month, the City Council unanimously approved two new agreements with Nimitz. One is a license to secure the northern end from trash dumping and trespassing. The other is a lease to provide 27 acres of that area for Nimitz tenants to accommodate big new orders by having extra room to lay down large items that come out of their factories elsewhere on the island while awaiting shipment to customers.

But a lengthy anonymous email sent to Mayor-elect Robert McConnell and news organizations before the Nov. 10 meeting questioned the propriety of the new arrangements and overall interactions between the city and the Nimitz team prompted the City Council to shift the items from the consent calendar to the open meeting for discussion.

Among the key accusations in the 16-point circular were that the October 2019 term sheet was being reworked between City Manager Greg Nyhoff and the Nimitz team, without council approval; the lay-down lease wasn’t compensating the city properly for commercial operations; and Nimitz co-founders Dave Phinney and Sebastian Lane, two local beverage entrepreneurs, were being forced out of the venture.

At the meeting, city legal staff underscored that the term sheet would have to come back to the council for a vote on any changes and that negotiation with Nimitz are ongoing for the development and purchase agreements. Nimitz submitted a letter to the council dated Nov. 10 and signed by Phinney, Lane and Gaylon Lawrence Jr., saying the claim of a shakeup is false.

Security supports job growth, redeveloper says

City staff and the Nimitz team underscored the necessity of the new agreements to the continued economic growth on Mare Island, where over 900 jobs were added in the past four months and 1,100 since the beginning of the year, according to the island management. There are about 110 businesses on the island all together, employing over 3,000 and occupying more than 3 million square feet. Another 1 million square feet of office and industrial buildings remain vacant, mainly because they need upgrades before occupancy.

"This is a really a step along the trail to the ultimate vision on the island,” Paul Kelley, city economic development director, told the council on Nov. 10 about the security agreement.

These red lines show the 7 miles of security fencing that The Nimitz Group received approval from the Vallejo City Council on Nov. 10, 2020, to install on north Mare Island. This aerial view from the east shows that the fences run along Walnut and Railroad avenues, which are main entry and exit routes, respectively, from the Highway 37 exit. (screenshot from the council meeting video)
These red lines show the 7 miles of security fencing that The Nimitz Group received approval from the Vallejo City Council on Nov. 10, 2020, to install on north Mare Island. This aerial view from the east shows that the fences run along Walnut and Railroad avenues, which are main entry and exit routes, respectively, from the Highway 37 exit. (screenshot from the council meeting video)

That vision, reiterated again at the council meeting and in community presentations last year, includes making Mare Island a go-to jobs generator as well as a trendy place to dine, attend events and live.

Key to that is improving the look of two key island entry points at the north end: Walnut and Railroad avenues from Highway 37 and the causeway across the Napa River to Vallejo proper, Kelley said to the council.

“This security license is an opportunity to get the island cleaned up, to protect it from illegal dumping, trespassing and other crimes,” said Kelley, once a Sonoma County supervisor for the northern district. “It reduces our cleanup, maintenance and frequency for our own staff. It saves the city on security costs.”

The city currently spends $50,000 annually on policing the northern end of the island, roughly equating to six hours of patrolling daily, not including trips by Public Works staff to pick up trash, Deputy City Attorney Dylan Brady told the council.

In what was called a good-faith measure, Nimitz, via its redevelopment manager, Southern Land Company, proposed to take on security and patrols of the area. That includes installation of 7 miles of 4-foot-high barbed-wire cattle fencing around three large city parcels and one still owned by the Navy, provide round-the-clock patrols and add lighting. That style of fencing is preferred because it would be less visible than chain-link fencing but would still provide an obvious indication when it had been cut, said Southern Land officials. That would cost $200,000 for the fencing and $15,000 a month for the patrols, or $180,000 a year.

One of the nearly dozen public commenters at the meeting opposing the two new arrangements, Brad Beltane, was concerned that the security license would give Nimitz “carte blanche” to mistreat the homeless found in north Mare Island.

“I understand why in making a development that you want that security, but the city needs to do its part first that the people in most desperate need get the help they need,” Beltane said. The lay-down lease has a one-year term, with three yearlong extensions possible, at an annual rate of $1.

Here’s the near-term urgency for the new Mare Island security and lay-down-area leases, according to Kelley and Nimitz’s redevelopment manager as of the beginning of this year, Southern Land Company: Kreysler & Associates, fabricator of large architectural enhancements such as sculptures and facades, has run out of room around its Mare Island plant to store large sections of the futuristic skin being produced for the Lucas Museum of Narrative Art.

Mayor-elect McConnell echoed the comments from Beltane and others who spoke against the two new agreements that these deals should wait for the new council to be seated in January to consider arrangements that would persist for years.

Tom D’Alesandro, president of West Coast operations for Southern Land, said the security license and lay-down area were needed sooner than that.

“If we wait, we will miss the window for putting in the fence, and Kreysler won’t be able to add a third shift,” he told the council.

Ramping up for the Lucas museum

Kreysler wants to add 40 employees to keep up with demand at its Mare Island plant, Brian Nagy, Southern Land’s operations chief in Vallejo, told the City Council. But the manufacturer needs secure yard space there to stage the finished panels for delivery to the museum job site when needed.

The Lucas museum is set to honor the life’s work of filmmaker and Marin County resident George Lucas, best known for the “Star Wars” series, now owned by The Disney Co. The museum is under construction in Los Angeles and before the coronavirus pandemic was expected to open late next year.

Kreysler has had its 35,000-square-foot fabrication plant at its headquarters in the Green Island Road industrial area of American Canyon since 2000, but the 45,000-square-foot Mare Island highly automated factory was opened early last year specifically to handle fabrication of composite building facades like the Lucas project.

In late 2018, Kreysler secured a three-year contract to produce the museum façade. The 700-foot-long, 270-foot-wide building was designed by Ma Yansong of MAD Architects to look like a cloud. That look will be achieved through 1,500 rainscreen panels attached to the structure via 5,600 special trusses, according to a review of the project by trade magazine Composites Manufacturing. The glass-fiber-reinforced plastic panels’ average size is 8 by 30 feet.

Growth of other island tenants

Factory_OS, an off-site builder of modular multifamily housing, also has made a big expansion on the island recently. It added over 100 employees and a second factory building, with over 100,000 square feet of production space.

The company has been turning out a number of modules for projects around the Bay Area, and dozens of finished modules are being staged in fenced lots with lights and security cameras further north on the island but not in the lay-down lease area. Southern Land officials told the City Council that Factory_OS was not one of the prospective tenants that needed that additional acreage.

This aerial photo on Oct. 19, 2020, shows two of Mare Island Dry Dock’s four “grave” (in ground) slots full with ships in for works plus three vessels berthed at the shipyard’s wharf, with Vallejo proper seen to the east across Napa River. (courtesy of Southern Land Company)
This aerial photo on Oct. 19, 2020, shows two of Mare Island Dry Dock’s four “grave” (in ground) slots full with ships in for works plus three vessels berthed at the shipyard’s wharf, with Vallejo proper seen to the east across Napa River. (courtesy of Southern Land Company)

Along the waterfront just north of Factory_OS is Mare Island Dry Dock LLC, which in the last 30 days added 27 new workers, bringing the 7-year-old company to 203 employees, said Christina Snyder, executive vice president. The union shop draws 62% of its staff from Vallejo residents.

Because it is one of the last large shipyards on the West Coast, demand for repair services has been strong, and now all four of the “grave” (in-ground) drydocks are full, and so are the company’s three berths on the wharf.

A newly installed security fence and tightened cybersecurity both to federal standards has allowed the company to land more contracts for Navy ships, Snyder said. The Emery S. Land vessel, with work approaching $50 million, came as a result of those upgrades, she said.

“To date, we have 29 vessels booked this year,” she said.

Including the dry dock staff, subcontractors, vendors, and ship crew and management, 1,200–1,300 people are checked into that shipyard during each work day, many of them staying in hotels in Vallejo and cities as far away as Dixon.

More updates on Mare Island plans and progress

But the comments at the Nov. 10 council meeting underscored the need for a return to the quarterly updates on the redevelopment progress and process for Mare Island, D’Alesandro told the council.

“We’ve heard comments and criticisms earlier today, and we take them seriously. And we will respond,” he said.

Next year, Southern Land plans to restart community outreach akin to the meetings held in 2018–2019 as HOK was preparing ideas for a master plan for Nimitz on the island, finish more market research, define next phase of rehabilitating existing buidlings and finalize the north Mare Island term sheet update and development agreement.

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 jquackenbush@busjrnl.com or 707-521-4256.

Correction, Nov. 23, 2020: Brian Nagy’s name was misspelled.

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