Kearny and Catellus have held the exclusive negotiating rights to the Air Force site since late 2002, when GlobeSt.com reported that the two companies has been selected by the Air Force as potential developers of the property. The contract signed by Kearny and Catellus gives them the go-ahead to build the development, along with partner Morgan Stanley Real Estate Fund IV. In addition to the 542,000-sf Air Force facility, the developers will build 905 units of housing.

Jeff Dritley, managing partner for Kearny, tells GlobeSt.com that the project will most likely start with a small child development center later this spring that will be part of the office campus. Work on the larger facility will probably start late this summer and be completed in early or mid 2006, he says. Work on the first residential parcel of 280 units to begin late this year, Dritley says, followed by construction on a larger parcel of 625 units in 2007.

In exchange for designing and building the new complex, which will house an Air Force Space and Missile Systems Center, the Air Force will deed over 52 acres to Kearny and its partners that will be the site of the housing. The office complex will be an administrative facility to handle procurement for the Air Force, which does not have any flight operations at the base and will not add any under the new design.

Since securing exclusive negotiating rights to the land, Kearny and its partners have been busy readying the site for development. Their activities have included the completion an environmental impact report, shepherding through the annexation of land from El Segundo to Hawthorne, and agreements with the County of Los Angeles and the Hawthorne Redevelopment Agency to pledge the incremental property taxes to the project.