The public boards that own and oversee the Federal City site in Algiers agreed this week to sell 65 acres of land and numerous vacant but historic buildings at the shuttered Navy base to private developers for $8.6 million.

The sale will be done in two or three phases, according to the purchase agreement’s framework approved Tuesday by two separate public boards.

“This was a major, major accomplishment,” said state Rep. Jeff Arnold, the term-limited lawmaker who leads the board of the Algiers Development District, which owns the site.

That board and the project’s Joint Development Committee, which oversees Federal City, approved the purchase agreement the two entities negotiated in recent months with Vista Louisiana LLC, the master development team that signed a 10-year contract for the project in January.

Vista Louisiana developed a master plan, approved in October, that provides a blueprint for how the former Naval Support Activity campus will be converted into 1,600 residential units plus commercial and retail spaces. A grocery and a boutique hotel are among the planned features.

Vista now is charged with making the plan a reality. It will finance the redevelopment privately.

The Algiers Development District is required to reinvest any revenue it obtains from Federal City back into the project, Arnold said. Of the $8.6 million, some of it might be put in a reserve fund, he said.

For the Algiers Development District, the sale will mean a move out of the property management business.

The Navy, which closed the century-old installation in 2011, gave the district 114 acres and 51 structures in May 2013 — free of charge.

The district’s board pays about $900,000 annually in Federal City-related expenses for maintenance, utilities, debt service and insurance, according to figures presented during Tuesday’s meeting.

The board, which oversees a tax-increment financing district, gets about $1 million annually from a portion of the sales tax revenue generated by the Wal-Mart Supercenter and adjacent businesses on Behrman Highway. That money is supposed to be spent on economic development projects across Algiers, including at Federal City.

“Obviously, they cannot afford to keep the land indefinitely,” said board attorney Fred Chevalier, of the Jones Walker firm. “To turn it over to a developer that would assume these costs would be a good thing for them.”

Vista Louisiana has proposed carving the 65-acre acquisition into as many as three phases. The purchase price for each still must be negotiated — with the provision that the overall cost stays below $8.6 million.

Vista will have to provide a business plan for each of the acquisitions, take over the Algiers district’s Federal City expenses other than debt service, and meet performance expectations and project deadlines, said attorney Lauren De Witt, of Jones Walker.

The agreement also creates a design review board that will ensure the work ahead conforms to the master plan that was approved in October, De Witt said.

One purchase phase will include 11 administrative buildings the Navy built before World War II. Those buildings contributed to the site’s placement in 2013 on the National Register of Historic Places, through which the developers can obtain historic tax credits, said Victor Franckiewicz, of the Butler Snow law firm, which represents the developers.

The buildings, some dating to 1904, are empty and have fallen into disrepair. Most have boarded-up windows, just as the Navy left them when closing the base more than four years ago. About $3 million in work is needed on the historic buildings just to prevent further decay, according to an architectural study completed last year.

The sales agreement and the master development plan have no direct impact on the remaining military installation at the site, the 29-acre Marine Corps Support Facility, although the Marines and their lawyers closely monitor the developments taking place just outside their fence line.

The state provided $150 million to build the headquarters for the Marine Forces Reserve and Marine Forces North commands that are in the compound, viewed as the anchor tenant for Federal City.

The agreement also does not cover the Ochsner-run Federal City Fitness Center, the New Orleans Military and Maritime Academy or military housing at the site.

The $8.6 million price tag gives the developers credit for the estimated $5.4 million it might cost them to demolish about 30 buildings, parking areas and an athletic field that have no historical value, according to data presented Tuesday.

During the meeting, some committee members expressed concern about Vista Louisiana’s ability to finance the project and the identity of some of Vista’s principals. Board members wanted assurances that the developers can live up to their agreements and financing commitments.

Franckiewicz, the attorney for Vista, assured the board members that the developers can finance the project. He also said the developers must compete in the real estate market. In private projects, developers purchase the property, get the money and go, he said. That’s not the case here, where the public boards want to ensure that the redevelopment will benefit the local economy, he said.

“This has a lot of strings, and we understand that. That’s what we signed up for,” Franckiewicz said of Tuesday’s agreement.

He added that the project still must be developed in the commercial market.

“There are no absolutes,” he said. “All of us have to take some risks.”