Selling Off Tustin Base Land Wouldn’t Be Easy : Real estate: Part of the property is contaminated, and then there are the blimp hangars, which are historic places, to list just a couple of problems.

The proposal to close the massive Marine Corps Air Station here triggered a wave of speculation among real estate experts Friday that was slowed only by the realization that major problems threaten to complicate any sale.

The base is on prime property, centrally located in a rapidly developing county where flat, buildable land is becoming scarce. But closing the base won’t simply be a matter of turning around and selling it to a developer.

At least part of the property is contaminated with toxic waste--from jet fuels to used oils. The U.S. Environmental Protection Agency last year cited the air station for illegally handling hazardous materials at 11 sites.

The toxics must be cleaned up before the land can be sold, and that could take years and cost the government a small fortune.

Then there is the matter of the two gigantic blimp hangars at the base, each almost big enough to fit the Queen Mary inside. Both of the World War II-era wooden buildings are on the National Register of Historic Places and can’t even be altered--let alone moved or torn down--without an enormous hassle of public hearings and government permissions.

It is not even certain that all the land would be sold to developers anyway. Under federal law, other government agencies get first crack at the property.

Real estate experts say it is not inconceivable that the county might want to build a jail on part of the base. Or Newport Beach and neighboring cities might press for turning a portion of it into a small general aviation facility to reduce noisy air traffic at John Wayne Airport. Neighborhood groups might even push for a public park on part of the land.

Since the Defense Department is not even certain it will get permission from President Bush and Congress to sell the base, Tustin city officials says it is a little early to say what they would like to see there.

But experts say that what is most likely to happen is a mixed-use neighborhood of homes, stores and possibly even offices and light industry.

“One thing we do envision is a lot of development interests salivating over this property,” said Christine Shingleton, an assistant city manager in Tustin. “The land has tremendous market potential.”

The Irvine Co., for instance, recently sold the county 16 acres nearby for $800,000 an acre. A local land broker, Irvine’s Hoffman Co., estimates that residential land in the area could fetch anywhere from half a million dollars up to $750,000 or $800,000 an acre, depending on how many housing units Tustin would allow the buyer to build. Those prices have actually dropped as much as a couple of hundred thousand dollars from a few years ago before the housing market turned sour, experts say.

The land could be desirable because there are few swatches of vacant land that big available in the middle and northern reaches of Orange County. And this parcel sits right in the middle of three freeways--the San Diego, Santa Ana and the Costa Mesa--and just up the road from the offices and factories of job-rich Irvine.

“Land that’s centrally located is in pretty short supply,” said H. Lawrence Webb, president of home builder Kaufman and Broad’s Southeast Division. “I have to believe that if it were well-planned, that property could be very desirable.”

But selling hundreds of acres at a time would probably require giving the buyer a discount, some experts say. Something else might bring down the price: The cost of tearing up runways and clearing the land for building, which a developer would have to consider.

Perhaps that is why the Defense Department says it expects its sale of 1,200 acres of the base’s nearly 1,700 acres--some military housing as well as the hangars might be kept--would fetch only $500 million or so, even though the Pentagon says the land won’t be sold all in one chunk.

Even if it gets a good price, the government would still have to subtract whatever it would cost to clean up the toxics in the soil.

“We’re likely to have one of the major toxic issues that we’ve seen in Orange County with that land,” said Mark L. Frazier, president of Irvine home builder Barratt American Inc. “It’s likely to be a long time before anybody can do anything with it.”

The base is bounded on the west and south by a neighborhood of low-slung factories and an occasional small office building. To the north is mostly housing, and to the east, the Irvine Co.’s subdivisions creep toward the base across the fields of tomatoes and strawberries.

Most of the Irvine Co.’s housing in the area sells in the middling price ranges, real estate experts say. So houses built on the air-base land would probably have to be middle-market, too. In expensive Orange County, that means they would probably sell in the high $300,000 range.

Since much of the housing in the older neighborhoods on the other side of the base ranges from older apartment buildings for blue-collar families and older houses, the air base isn’t likely to become a terribly chic new neighborhood. There will probably be some affordable condominiums in any developer’s plan for the land, builders say. In Orange County, that means the condos would cost between $150,000 and $200,000.

The Defense Department’s announcement, meanwhile, may eventually remove one headache for the giant Irvine Co., the area’s largest private landowner, while creating perhaps another. The company has tussled with the Marines for years over the amount of noise generated by the helicopter base and the even larger El Toro jet base down the road. And opponents of the company’s proposed 3,800-unit Westpark II subdivision--slated to go near the base--used the noise issue as part of a campaign to force a citywide vote on whether to build the project. The helicopter noise, obviously, may not be a problem much longer and, hence, may deflate the noise problem as an issue.

But the company is concerned about what might take the air base’s place. “Whatever happens to the land, we just hope it will be compatible with the surrounding land uses, including ours,” said Mike Stockstill, a company spokesman.

Larry Thomas, vice president for corporate communications, said the giant developer--which owns about a sixth of the land in the county--is not interested in buying more, especially any on the Tustin air station site.

“It’s just that the obstacles would be formidable, without taking a much closer look,” Thomas said.

“On the face of it, you have a tremendous amount of infrastructure there, including historic buildings; you have runways and probably underground fuel lines--just a huge, separate infrastructure that would have to be razed partially or entirely before you could even plan for some alternative use. That would be complicated further by whatever it was that you proposed and how it would fit into the region’s master planning in terms of transportation or other uses.”

The Irvine Co. once owned the land under the base when the company was a giant ranching operation. It sold the property to the government shortly after the outbreak of World War II, when the blimp base and the hangars were built to patrol for Japanese submarines off the coast.

As for the environmental problems, nobody knows just how bad they are. But the California Department of Health Services says there are known to be underground tanks leaking fuel into the soil and possibly the ground water; toxic PCBs from buried transformers; pits where flammable liquids were burned, and toxic liquids poured into the ground. Much of this happened before most people realized it was bad for the environment, and it isn’t much different from what health inspectors find at most Southern California military bases. Pollution is so substantial at the neighboring Marine air station in El Toro, for instance, that the sites are on the U.S. Environmental Protection Agency’s Superfund cleanup list.

NEXT STEP

COMMISSION REVIEW: An eight-member closure commission will hear testimony from Defense Secretary Cheney, military officials, members of Congress and local officials, then make its recommendations to President Bush by July 1. It may add to, or delete, facilities on the list. . . . PRESIDENTIAL DECISION: The President must either reject or approve the entire list without change by July 15. If he rejects the list, the commission may submit a revised one. . . . CONGRESSIONAL DECISION: If the president approves the list, Congress has 45 days to approve or reject it. . . . BASE RELOCATION: If Tustin is finally approved for closure, Marines would pack their bags and move to the Twentynine Palms Air Ground Combat Center over three to six years. A new Marine air station would be established there.

AREA MILITARY BASES

Bases indicated with an asterisk are facing possible closure. 1. Long Beach Naval Station* 2. U.S. Naval Weapons Station Seal Beach 3. Tustin U.S. Marine Corps Air Station* 4. Marine Corps Air Station El Toro 5. Camp Pendleton