SEAL BEACH — A huge swath of prime coastal Orange County real estate is up for grabs — with a catch.
The U.S. Navy is looking for a developer to transform a roughly 28-acre site on underused federally owned land at Naval Weapons Station Seal Beach, on the corner of Pacific Coast Highway and Seal Beach Boulevard, into a mixed-use district with possible hotels, retail, restaurants and maybe even housing.
The coastal project — about half a mile from the city’s beach and the Old Town Main Street area — could put one of Seal Beach’s most prominent undeveloped properties into private hands for commercial development while also helping the Navy modernize an aging military base and, most importantly, create a new destination along a prime stretch of PCH that would serve the community as well as military personnel.
In exchange for developing the land, a developer would sign a long-term ground lease and modernize the World War II-era weapons station’s infrastructure instead of paying regular cash rent, Navy officials said.
“It’s about location, location, location,” said Capt. Kyle Caldwell, commanding officer of Naval Weapons Station Seal Beach, during an August pre-proposal conference. “You’re on the edge of Pacific Coast Highway and Seal Beach. I don’t think you can get a better location than that.”
Caldwell said the Navy ideally wants to partner with a developer to create amenities that could serve military personnel and the broader community, but the chosen developer would ultimately have the final say on what to build on the site.
Developer Interest
Navy officials have made similar deals before.
For example, in 2006, the Navy struck a deal with Manchester Financial for a 99-year ground lease to develop a waterfront project on 12.5 acres in San Diego in exchange for building a 17-story, 373,000-square-foot Navy office building.
The Navy office was finished in 2020. Manchester later had problems with other parts of the project and sold much of the leasehold interest to life science real estate development company IQHQ.
Navy officials said representatives from at least 26 companies attended the pre-proposal conference in Seal Beach, including developers, builders, architects, engineers and environmental consultants.
Several companies with Orange County operations attended, such as Hensel Phelps, SVA Architects and Griffith Company, among others.
A representative from Maryland-based Erickson Senior Living also attended. The company recently purchased 17.7 acres for $159 million in Irvine to build a 1.8-million-square-foot continuing care retirement community in the Great Park Neighborhoods.
Bill Shopoff, founder of Irvine-based Shopoff Realty Investments, whose company began construction on the $2.5 billion, 83-acre Bolsa Pacific project in Westminster, told the Business Journal his company might be interested in bidding, though he wasn’t at the pre-proposal meeting.
“We are considering making a proposal but haven’t decided for sure as of today,” Shopoff said. “Any larger piece of land presents interesting opportunity for our firm. Generally, we would think housing would work in this location. The deal with the base presents additional nuances to the project.”
Those nuances include the Navy’s ground-lease, in-kind payment structure and other issues.
Other major local developers, such as FivePoint, Irvine Company and Almquist, did not respond to the Business Journal’s requests for comments.
Requests for Qualifications are due by Sept. 30. The Navy plans to choose about three development teams by January 2027 and invite them to submit proposals and financials in May 2027.
Naval Weapons Station Seal Beach
Commissioned as the Naval Ammunition and Net Depot in 1944 during World War II, the military base spans more than 5,200 acres. Today, the weapons station receives, stores, maintains and supplies weapons and ammunition in support of U.S. Navy and Marine Corps forces operating in the Pacific.
The base has more than 225 active-duty personnel and about 520 civilian employees, Navy officials said. More than 1,050 reservists are also associated with the installation, which receives roughly 40 to 50 Navy ship visits annually.
Navy officials said those ships, depending on the vessel, can bring in hundreds of sailors who may spend several days on liberty in the area.
Caldwell said that unlike other naval bases around the country, Naval Weapons Station Seal Beach lacks many amenities.
“We don’t have a commissary,” Caldwell said. “We don’t have a gas station on our base. We don’t have a hobby shop. We don’t have the restaurants like all the metro bases have down there.”
U.S. Navy officials say their ideal plan for the land is to create a place where people can live, work, play and visit.
Officials said the development would be publicly accessible and physically separated from the base.
“It’s about legacy,” Caldwell told attendees about the property. “This is changing the scen-ery, the environment and everything that’s going to take place.”
Navy’s Plan
Under the Navy’s proposal, a developer would sign a long-term ground lease and provide the Navy with yearly “in-kind consideration” instead of paying regular/ traditional cash rent.
Navy officials said that could include renovating military buildings, upgrading electrical systems, replacing HVAC units and generators, improving roads and completing other projects in the base.
Navy officials said the annual value of those improvements and services must be at least equal to the fair-market value of the leasehold interest.
The weapons base comprises about 1,400 facilities with an estimated replacement value of $5.4 billion, the Navy said.
The developer would also be responsible for constructing a new security perimeter separating the commercial development from the operational military installation and separating the development’s utilities from Navy systems.
Although the property would remain federally owned, Navy officials told attendees that Seal Beach’s zoning and planning requirements would not apply. However, developers should work with the city and may need local construction permits and other approvals.
The project also must undergo federal environmental review before a lease can be executed.
Seal Beach Community Development Director Shaun Temple said during the meeting that the city is looking for a high-quality development that is “iconic” and fits Seal Beach’s character. He did not return a message from the Business Journal.
In his pitch, Caldwell said developers would not only have the chance to transform a prime piece of land in Orange County, but also one of the safest around.
“Not only are you going to have a business or whatever we put there on that corner, but you’ll have a view looking out your window and see a warship standing right out there in front of you,” Caldwell said. “That’s truly amazing. And I think you’re going to have the best security you’re ever going to have.”