ALAMEDA — Federal and state officials signed an agreement laying out plans to clean up what is described as one of Alameda Point's most contaminated areas — land where the city would like to see a commercial marina.

Seaplane Lagoon was constructed by the U.S. Navy in the 1930s and used by seaplanes that landed on the water and taxied up ramps to hangars at the base.

The lagoon is now contaminated with hazardous chemicals that built up in the lagoon from decades of Navy use.

The site is just one of 34 cleanup sites at the former Naval Air Station.

But Greg Lorton, the Navy's lead environmental project manager for Alameda Point, said it would be among the most challenging for the Navy.

Cleanup costs for Seaplane Lagoon will range from $20 million to $25 million, he said, and the project will likely last two years once it begins in 2008.

The agreement, reached last week after a lengthy study, was signed by the Navy, the U.S. Environmental Protection Agency, the California Department of Toxic Substances Control and the San Francisco Bay Regional Water Quality Control Board.

"We consider (the agreement) a very important and critical part of the process to move ahead with the clean up of ... Seaplane Lagoon," Lorton said.

According to the Navy, the cleanup process will involve digging up selected areas and relocating contaminated soil to permitted hazardous waste sites.

The air station closed in 1997 and the U.S. government

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declared it a hazardous waste site in 1999. The Navy still owns the land and holds responsibility for cleaning it up.

Developers who had planned to build shops and houses on the former base backed out of the project in September, citing a weak housing market, leaving the future of Alameda Point in question.

Since then, some city officials have expressed frustration with the Navyover the property transfer of the property and the slow process of removing the contamination.

But City Councilman Frank Matarrese, who is the council's liaison to the base restoration advisory board that reviewed the decision, said it was a good deal for the city.

"It's a good decision and it will give the opportunity to get some significant cleanup done on probably one of the more contaminated spots of the base," he said.

The city envisions eventually using the area for a marina that would include public access to the waterfront and possibly a ferry terminal, Matarrese said.