The plan to transform the Oak Knoll Naval Hospital property in the Oakland hills into a mixed-use community with 935 homes is being revived six years after it was shelved because of the recession.

SunCal, which originally partnered on the project with defunct investment bank Lehman Bros., plans to resubmit plans for the 187-acre project, said Pat Kelleher, Oak Knoll project manager for the Irvine developer.

“We are picking up where we left off,” Kelleher said.

While the new vision is similar in size and scope to the one that was put on hold in 2008, Kelleher said SunCal has dropped the most controversial part of the original proposal: the 16 multimillion-dollar “McMansions” that were to be built along Oak Knoll’s prized ridge.

Kelleher said his group met with neighbors over the past few months and was convinced that the 14.8 acres along the ridge should remain open space. In total, the plan calls for 80 acres of open space and parks and more than 4 miles of trails. A 16-acre area around a creek will also be rehabilitated. The property is at 8750 Mountain Blvd.

Wary support

Resident Donald Mitchell, who has been tracking the project for 15 years as part of the Oak Knoll Coalition, said he was “hesitantly positive and cautiously optimistic.”

“We are holding out support but are hopeful that it will be something that is acceptable to the neighborhood,” he said. “Our concern has always been what they are going to do on the ridge and what they are going to do in the historic oak woodlands.”

For 54 years, Oak Knoll Naval Hospital treated U.S. service members, including those wounded during World War II, the Korean War and the Vietnam War. It was closed in 1996 and sat vacant for 10 years; its buildings were vandalized and left to crumble. The main hospital building was imploded in 2011.

SunCal partnered with Lehman Bros. to buy the property in 2005 for $100 million, but lost control of it after the investment bank, which had put up the money for the acquisition, filed for Chapter 11 bankruptcy protection in September 2008. It wasn’t until May 2014 that SunCal was able to buy back the property at a price closer to $70 million.

Under the new plan, no structure will be taller than three stories — the six-story podium buildings originally planned have been eliminated. There will be a mix of town houses, senior housing and single-family homes large and small. A village center with space for restaurants and retail storefronts will also be included.

“It’s less impactful than the previous plan,” Kelleher said.

Historic building

In a move likely to upset preservationists, Kelleher said the most historically important building on the property, the Knoll Club, would probably be knocked down because of what SunCal called “unrepairable damage.” Kelleher said SunCal would work with veterans groups to identify portions of the structure that could be reused in a memorial and park within the new community. The original plan called for the club to be a community center.

Mitchell took issue with the contention that the club could not be saved.

“They can save it if they want — it’s the signature building on site,” he said. “Most developers would prefer not to put money into something like that.”

While the plan is similar to the one abandoned in 2008, SunCal will be required to undertake all new environmental impact studies, a process that will take 12 to 18 months. It’s unlikely that construction would start before late 2016.

“We think it’s a great housing market,” Kelleher said. “Oakland is an amazing place with terrific weather, job opportunities, and this project is located in a prime area. If we were entitled today, we would start building right away.”

City Councilman Larry Reid, who represents East Oakland, said he has been working to build support for the project with neighbors.

“If we can develop Oak Knoll, it will not only change East Oakland but make us part of the positive change that is occurring elsewhere in the city,” he said.

Funding gone

Reid said he would welcome more retail in the project and would like to see the Knoll Club preserved, but he understands why the developers are not willing to do it. Originally the club restoration, a $12 million project, was going to be funded with money from Oakland’s redevelopment agency. When Gov. Jerry Brown dissolved redevelopment agencies in 2011, that money was no longer available.

“Now it’s on the backs of the developer if they want to spend that kind of money,” said Reid.

J.K. Dineen is a San Francisco Chronicle staff writer. E-mail: jdineen@sfchronicle.com Twitter: @sfjkdineen