The consortium that is building the huge University Villages development in Marina got the land for cheap, partly because of the added costs of developing on the former Fort Ord. But documents obtained by the Weekly show that the developer will be reimbursed by the city of Marina and the Fort Ord Reuse Authority (FORA) for a large chunk of the added expenses associated with the development.

The developer, Marina Community Partners (MCP), bought the 429-acre parcel for $48 million (about $112,000 per acre)—widely considered to be a discounted rate.

For months, backers of the project on the Marina City Council have argued that the seemingly cheap sale price was justified because the developer is required to take on a series of added financial burdens and risks.

However, at least two of those financial burdens—the building of affordable housing units and the cost of clearing the property of existing structures and contaminants—are in fact being paid for by the City and FORA.

That doesn’t make sense to Quinton Roland, a redevelopment consultant and former Marina planner. “The developer is not absorbing any of the burdens that represented the added cost of Fort Ord development and that justified the severely discounted land price,” he says.

Bob Schaffer, spokesman for MCP, vehemently disagrees.

“You can’t say that we’re paying less for the land than it would sell on the open market,” Schaffer says. “Land has value only to the extent that you can create income out of it.” To do that, Shaffer says, MCP is obliged to make millions of dollars in improvements to the property which, according to hundreds of pages of inscrutably complex development agreements, shrink the amount MCP is able to pay for the land and still turn a profit.

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After Fort Ord closed and neighboring cities were handed sections of the old Army base for redevelopment, certain rules governed how the land could be developed. For example: a state law and Marina’s own statutes require that at least 20 percent of new housing on the base be affordable to low-income and middle-income buyers.

In addition to thousands of homes, and a “Village Promenade” that reflects some New Urbanism principles, the University Villages project includes a huge commercial big-box development including a Best Buy, Kohl’s, and a Target—all built directly adjacent to Highway 1, and only four miles away from Sand City’s just-renovated Target.

Since the University Villages project has a total of 1,237 planned housing units, 248 of them must be affordable under federal guidelines. The units will sell for between $160,000 and $270,000 to qualified homebuyers.

MCP has agreed to spend $27 million to help build the affordable units. But according to the development agreement and documents detailing the transaction, MCP will be reimbursed most or all of the $27 million by the city of Marina’s Community Redevelopment Agency.

Doug Yount, who is leading the City’s projects on the former Fort Ord, confirms that Marina and FORA will ultimately shoulder these costs. Yount said that the $27 million is the difference between how much it will cost to build the units (about $80 million), and how much they’ll sell for at below market price.

The remaining $53 million will come from South County Housing, a Gilroy-based nonprofit developer of affordable homes, which will manage the low-income portion of the University Villages. Andy Lief, senior project manager for South County Housing, says that the nonprofit developer plans to take out loans to secure the money, and use about $12 million in federal tax credits.

So it’s likely that millions of dollars in local, state and federal tax money will subsidize the affordable units on University Villages—even as MCP is reimbursed for its expenses.

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Besides paying for the land itself, Marina Community Partners must pay FORA about $50 million in development fees. This money is designed to pay for infrastructure improvements.

According to the agreement, MCP will receive a significant reimbursement from FORA that almost cancels out its developer fees.

MCP is fronting about $47 million for the deconstruction and removal of old Army structures—mostly aging barracks—on the project site, as well as cleaning up lead-contaminated soil. FORA will reimburse the developer the entire $47 million it costs to do that work.

Marina Mayor Ila Mettee-McCutchon dismisses criticisms of the deal as “an effort to twist reality,” and stresses that the unique nature of building on a former Army base renders comparisons with other similar redevelopment projects invalid.

“Sure, a finished empty lot anywhere else will go for much more [than $112,000 per lot],” said Mettee-McCutchon, who is running for reelection this fall. “But the infrastructure isn’t there. They don’t have to tear down old buildings. It’s like comparing apples to oranges.”

When asked about the reimbursements that FORA is making to pay for deconstruction, Mettee-McCutchon said “I think we’re lucky that the developer was willing to front the money.”

When asked about how Marina will reimburse MCP $27 million for the construction of affordable housing, Mettee-McCutchon said that the “good news is that there will be 20 percent affordable housing.”