HUD Finds 60% of Navy Surplus Land Unfit for Homeless Project : Shelter: In setback to proposed San Pedro development, agency says housing is too close to aviation fuel tanks. Plans have met intense local opposition.

WASHINGTON — In a setback for a proposed South Bay homeless project, the Department of Housing and Urban Development has ruled that dozens of surplus Navy housing units in San Pedro are unsuitable for the plan because they are too close to aviation fuel tanks.

The HUD ruling prompted Rep. Jane Harman (D-Marina del Rey) on Thursday to call on Turner’s Technical Institute, the South-Central group that seeks to operate the controversial shelter, to begin anew the federal application procedure for such a project.

Institute officials could not be reached for comment.

HUD will publish its findings in the Federal Register today, declaring that 19 of the 23 four-unit buildings, 12 of the two-unit buildings and eight of the 16 carports--nearly 60% of the structures on the site--are within 2,000 feet of two privately owned aviation fuel tanks.

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The department had assumed that the tanks were Navy property and would be removed by the time the Long Beach Naval Station closes in September.

The HUD findings apparently means that the scope of any homeless project would have to be smaller, so the application process for operating such a proposal should be reopened, Harman said in a letter to Donna Shalala, secretary of the Department of Health and Human Services. That agency is also reviewing the institute’s plan.

“I have no idea what Turner’s financial or professional qualifications are to do this (smaller) project, but I didn’t believe it had the financial and professional qualifications to do the (larger shelter),” Harman said in an interview.

Under the federal McKinney Act, HHS in January approved Turner’s application to establish a homeless shelter for up to 880 people on 27 acres of surplus land that has been used to house Navy personnel and their families. The announcement caught local officials by surprise, and public opposition to the project quickly became intense.

Inconsistencies in the institute’s application came to light, and doubts were raised about the ability of the group to manage such an ambitious undertaking.

Both HUD and HHS were pressured to review their approvals of the project.

Harman hopes that if HHS goes along with the suggestion, a committee of residents known as the San Pedro Area Reuse Committee will be able to put together an application from local homeless groups that can meet the criteria of the McKinney Act, which gives homeless organizations first crack at surplus federal property.

Doane Liu, chairman of the residents’ committee, was pleased by the HUD findings.

“Our argument is that the property should be rescreened (by the Navy) because it is a whole new piece of property, considerably different than the original. We will ask the Navy to reconsider whether they even want to (offer it as) surplus. We want them to go back to the beginning,” Liu said.

Long Beach base closures manager Kimberly Kesler said the Navy will ask state and local agencies if they want to use the portion of the Taper Avenue site that has been declared unsuitable for a homeless shelter.

She said the Navy also can start from scratch and screen Department of Defense and federal agencies that are interested in that part of the property.

“Those agencies that may apply will have precedence over any state or local agency,” Kesler said. “The reuse committee needs to look at its objective before they ask us to start all over.”

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Harman said she anticipates that the HHS review of the shelter proposal will be completed within several weeks.

If HHS rules that the land is unfit for habitation, Harman said, it might be used as parkland or open space.

Times community correspondent Susan Woodward contributed to this story.