Concord Spends $40M on Naval Weapons Station, No Homes Yet

The City of Concord has shelled out nearly $40 million to redevelop the former Concord Naval Weapons Station into tens of thousands of homes — without a house to show for it.

The East Bay city, now on its third developer for the 2,300 acres owned by the U.S. Navy on the northside, spent the money on environmental consultants, conceptual renderings, legal contracts and more before a single shovel had broken ground, the East Bay Times reported.

Despite the expenses, Concord officials are confident they will recoup their investment.

That’s because the $6 billion project has been partially funded by state and federal grants, the city’s now-defunct redevelopment agency and city loans, according to the Times.

While those loans will be repaid by future home sales, its latest developer has committed to fully reimbursing the city for project costs.

In March, New York-based Brookfield Properties and the city, acting as the Local Reuse Authority, tentatively approved a plan to build 12,200 homes, 6 million square feet of offices, shops and restaurants and 880 acres of parks and greenbelts on the former weapons site.

The Concord City Council then quietly approved $1.6 million for 12 one-year agreements with legal and professional consultants, who have begun hammering out a development agreement with the unit of Toronto-based Brookfield.

The pending agreement includes a commitment that both Brookfield’s upfront investments and loans from Concord’s general fund to the LRA — now $14.6 million — will be repaid as homes are sold.

The profit-sharing model aims to recoup everyone’s money after the first 10 years of residential construction, according to Guy Bjerke, the city’s director of Economic Development and Base Reuse.

Brookfield has estimated that its sunk costs will total $22 million by the time the project is fully approved.

After the first phase of construction is complete, that figure may balloon to $200 million to cover all of the infrastructure investments needed to build the homes, such as sewage lines, water utilities and roads.

In return for taking on the risks of financing the project up-front, the master developer will be compensated with an “entitlement fee” from future home sales, equal to three times the amount of all incurred costs.

The nearly $40 million in consulting expenses is due in large part to the project’s troubled history with previous developers — Miami-based Lennar and locally based Concord First Partners.

Agreements for both of those plans were eventually scrapped in 2020 and last year, respectively, after labor disputes, power plays and allegations of backroom deals, according to the newspaper.

Between October 2005 and December 2023, the City of Concord has signed agreements worth a cumulative $30.7 million to 38 vendors and consultants — a quarter of which are now working on the project.

An additional $8.6 million has covered Concord’s payroll and other office costs associated with the Naval Weapons Station, between Thurgood Marshall Regional Park and residential neighborhoods along Concord’s north side, near the Sacramento-San Joaquin River Delta.

Averaging roughly $2.1 million in annual expenses, Bjerke said that total may continue to swell through March 2028, the deadline to negotiate a property transfer agreement with the Navy, draft a specific plan, prepare an environmental impact report and obtain other necessary legal permits.

Brookfield and Concord staff, however, are aiming to complete that work by early 2026.

— Dana Bartholomew