Encouraging Study Sparks Leisure World Cityhood Bid : Incorporation: Laguna Hills community could be financially independent, yearlong analysis shows. Leaders launch drive.

The nation’s largest gated retirement community took a major step toward self-rule Wednesday with the release of a yearlong study showing that Leisure World could be financially independent.

Bolstered by the report’s findings, community leaders launched a cityhood drive to create Orange County’s 32nd city and the state’s first incorporated retirement community.

Members of an incorporation committee appointed by the Golden Rain Foundation, the community’s governing body, told a packed audience in Leisure World that the proposed city--encompassing about 23,000 people--would have a surplus of $2 million in its first year of operation and $16 million over the first 10 years. The meeting was broadcast live on the community’s closed-circuit television system.

Although a new city would put a further drain the county’s treasury, the community has received encouraging news from the Local Agency Formation Commission and at least one member of the Orange County Board of Supervisors.

“I don’t think Leisure World would be a big loss to the county,” said James Colangelo, LAFCO’s executive director. “The costs of running Leisure World as a city would be fairly low.”

If approved, Leisure World would be the first incorporated retirement community in California and probably the nation, Colangelo said.

But more important, Leisure World would be the sixth new city in rapidly growing South County since 1987. County officials estimate the incorporations have drained $16 million annually from county coffers, and the Board of Supervisors has warned that it would oppose any further incorporation drives.

But cityhood advocates in Leisure World have been assured that Supervisor Thomas F. Riley, whose 5th District includes 16,000 registered voters in the retirement community, won’t stand in their way.

“The supervisor feels that even though it hurts the general fund, he isn’t in a position as supervisor to step in the way of their self-determination,” said Christie McDaniel, a Riley aide. “Although he hates to see anyone leave the county family, if the residents want to incorporate, they have that right.”

This isn’t the first time Leisure World residents have considered cityhood. Only three years ago, the retirees voted overwhelmingly to reject a proposed city of Laguna Hills that included the 2,100-acre retirement community. Laguna Hills became a city last year after excluding Leisure World from its boundaries.

Doyle Selden, who chairs the incorporation committee, pointed out that this was the first time that the community was not being pressured into becoming part of a city.

Selden said Wednesday’s release of the economic study was part of a calculated strategy aimed at presenting arguments for and against cityhood to Leisure World residents. He urged residents to examine the proposal thoroughly before making a decision.

“You have to consider that five years from now only 100,000 people will be living in unincorporated areas (in Orange County) while 2 1/2 million will be living in cities,” Selden said.

Selden, however, insisted that the community will not file a formal application with LAFCO unless a “strong majority” of Leisure World residents vote in a referendum to approve cityhood.

“We’re not going to tear this community apart by bickering with each other,” Selden said. “If this is going to be divisive and there is a lot of organized opposition, we’ll simply drop it.”

Sherwood Heiser, president of the Golden Rain Foundation, said there is “little doubt that a city is feasible, but whether we want it or not is another option.”

Heiser said Leisure World will remain a private, gated community if an incorporation effort is successful. “The difference is that we’ll be dealing with people we know instead of having to go to the Board of Supervisors,” Heiser said.

The prospective city would encompass roughly two square miles in a triangle bordered by Moulton Parkway, El Toro Road and Lake Forest Drive. An incorporated Leisure World would include several retirement homes on Moulton Parkway, three housing tracts west of Moulton Parkway and a strip of home furnishing stores on Avenida de Carlota known as “Furniture Row.”

Leisure World as a city would have several distinct financial advantages, Colangelo said. Services such as parks, streets and security are already private, so a new city wouldn’t be forced to pay for costly maintenance, Colangelo said.

New cities get enhanced tax revenue from the state, which offers to pay them three times their voter registration for five years. Voter registration in the retirement community is one of the highest in state, with about 16,000 of 21,000 residents signed up to vote.

“They would receive funding equal to the size of a city of almost 50,000 people,” Colangelo said.