The bureaucratic stalemate over the creation of a wildlife refuge on an abandoned Navy base at Skaggs Island could finally be nearing an end.

Legislation approved by Congress this week and awaiting President Bush's signature would require the Navy to negotiate a transfer of 3,300 acres of former tidal marshland to the U.S. Fish and Wildlife Service for creation of a preserve.

The bill also authorizes the federal government to accept $8 million in existing state funds for the demolition of 100 dilapidated military buildings on a portion of the property.

Navy officials had been balking at the turnover plan since the base was decommissioned in 1993, citing financial concerns. The new legislation essentially requires the military to cooperate.

"This is a major step forward," said Rep. Lynn Woolsey, D-Petaluma, who wrote the proposal included in the $700 billion Defense Authorization bill. "It gives me the clout I need if these two departments don't work together."

Advocates for returning the land to its natural state and making it part of the San Pablo Bay National Wildlife Refuge were optimistic.

Marc Holmes of the Novato-based Bay Institute, who has been working to restore Skaggs Island since before the Navy station closed, said the legislation gives clear instructions that will prevent delays.

Cleanup of environmental damage is long complete but since President Bush took office nearly eight years ago the Navy has been dragging its feet on removing the buildings and completing a transfer, Holmes said.

"I'm thrilled about the legislation," Holmes said. "Congress says you shall negotiate an agreement that effectuates the restoration. Honestly, there's nothing else holding it up."

Woolsey said demolition could be completed by the end of next year. Rather than being open like a public park, the refuge would be an educational preserve with guided tours. Operating expenses would be handled through annual appropriations.

"It's a beautiful piece of property," Woolsey said. "Just letting it sit there is a waste."

Skaggs Island is the largest diked wetland in the North Bay. It is situated north of Highway 37 at Sears Point and connected to San Pablo Bay.

The land was drained by ranchers in the late 1800s and used mostly for hay farming until World War II when the Navy erected a secretive communications base. After more than 50 years, the base closed and local groups sought to restore the land.

It is now home to at least 20 threatened or endangered species and is a key stopover for migratory shorebirds and waterfowl traveling along the Pacific flyway.

Holmes said plans to breech the dikes and flood the land would secure the habitat. It also would return to the bay natural filtering and flood control systems -- two things that are badly needed, he said.

"It's a matter of reversing the imprudent activities of marsh destruction we have engaged in over the last century," Holmes said.

You can reach Staff Writer Paul Payne at 762-7297 or paul.payne@