El Toro Closure Cost Would Rock County : Economy: Loss of Marine Corps Air Station, along with Tustin closing, could drain $1 billion a year.

The newly proposed closing of the El Toro Marine Corps Air Station would drain more than $400 million a year from the Orange County economy and, coupled with the previously announced shutdown of the air base at Tustin, would result in an annual loss to the local economy of more than $1 billion, officials said.

The bleak economic prospects are softened only slightly by the possibility of future commercial development on the 4,700 acres of prized El Toro real estate. It is land where some government officials have long envisioned a second regional airport to share the traffic--and the noise--that has placed John Wayne Airport-area residents at odds with local officials for years.

For the same reasons, residents of Irvine and newly incorporated Lake Forest, which border the base, have expressed equal opposition to locating another regional airport at El Toro.

“Having a commercial airport taking the place of the base would decrease property value, increase noise and traffic, and our entire quality of life would certainly change,” said Lake Forest Mayor Ann Van Haun.

Although El Toro’s closure--if ordered at all--would probably take years to complete, the prospects for loss in today’s unstable economy loom much larger than any future airport or housing development.

“If it happened now, it would simply be devastating,” said Esmael Adibi, the director of Chapman University’s Center for Economic Research, who projected long-term losses for the county at $1 billion per year. “Some businesses and jobs will be created with future development, but how long will it take and in what state will our economy be? Some cuts were expected, but the rate of decline (in defense spending) has been accelerated.”

Ben Williams, deputy director of planning and research for Gov. Pete Wilson, said Monday that communities bordering the bases reportedly targeted for closing have reason to be shaken by the threatened shutdowns. News of the proposed California base closures caught even state government officials off guard, he said.

“I was staggered when I heard that list being read to me,” Williams said. “To me, reaction to this seems to be more severe than at any other time. We’re just being rocked. We’re standing there, getting hit with a left and a right, and another left and a another right.”

At the same time, though, Williams warned against throwing in the towel too quickly. Any serious discussion of alternative uses of the military bases in question--like a commercial airport for El Toro--could undermine the state’s fight to keep bases open and mean economic disaster for places like Orange County.

“I would hope that the cities located near the base and the county would pull together now,” Williams said. “Right now, the cities are in a state of denial, but we are not at a point right now to give in. A solid case has to be made first for the military need for El Toro. Without that, they are gone.”

Said Orange County Chamber of Commerce Chairman Tom Wilck: “If we start to talk about what might happen after it (El Toro) closes, it just wouldn’t be smart politically. We need to do all we can to see that this does not happen.”

But in Orange County, where land speculation is big business, the possibility of 4,700 acres being thrust into the marketplace has renewed a series of development discussions.

Proponents of a second regional airport maintain that the sooner they can set in motion their plan to convert the base into a commercial air strip, the sooner the area and its residents can reap the benefits.

“A commercial airport has incredible potential and is going to be an economic boon to the area,” said Kenneth J. Delino, Newport Beach deputy city manager and executive director of the Orange County Cities Airport Authority.

His group commissioned a study recently which found that a John Wayne-size airport could net $200 million annually and provide more than 2,000 new jobs.

As proposed, start-up costs for a second airport would approach $700 million, Delino said, adding that bond financing for the project should not be a problem.

“We have an Amtrak line that stops there in El Toro and that means there’s mass transit possibility. All the freeway off-ramps are in. There is a proposed monorail system considered by the county,” Delino said. “It’s the perfect setting for an airport that’s going to bring jobs and spur development and the economy.”

A new airport and what it could bring, especially in noise, is what fuels the opposition, most of it from residents and city officials of Irvine and Lake Forest.

Officials in both cities said that until this week, they had never seriously thought that El Toro would be closed and they have not studied its possible economic impact. But now that the base is on the Pentagon’s preliminary list, Irvine and Lake Forest officials said they will make the issue a top priority.

They said a base closure would certainly mean a heavy loss of revenue and sales and property taxes generated by thousands of civilians and military personnel who live or shop in their communities.

Currently, El Toro supports more than 6,300 active duty Marines, 7,750 military dependents and 1,900 civilian jobs. Its payroll alone amounts to $263 million per year, according to statistics compiled by the base and forwarded to the governor’s office.

Any transfer of military personnel out of the county would cut deeply into the local housing market, already awash in available apartments and homes.

“The people who work on base have base housing on the west side of Irvine, bordering Tustin,” said Irvine Mayor Michael Ward. “Those people live in our city and shop in our city and if they go, we would suffer a tremendous economic loss.”

While they are against the base closure, the officials are more vehemently opposed to a possible airport conversion.

“Maybe an airport will bring in some new income, but I don’t think the consequence will be a desirable one,” said Lake Forest Mayor Ann Van Haun. “It’s going to lower our property value, and especially with the market the way it is now, I don’t think anyone could handle that.”

Real estate brokers, meanwhile, have long ogled the El Toro Marine Corps property, some believing that the air station has been an impediment for commercial development needs.

“If the base does close, I’m sure there will be some small business people who will suffer,” said John A. Ollen, senior vice president of CB Commercial in Laguna Hills. “On the other hand, other businesses are more reluctant to locate near the base because of the air strip. If the base does close, it will open up real estate opportunities that weren’t there with the air station.”

For the federal government, El Toro’s closure and subsequent property sale could not come at a worse time. The California economy has suffered greatly from plummeting real estate values and some brokers believe that the government would be lucky to fetch $300,000 per acre for the land, down from previous estimates as high as $600,000 per acre.

“Unfortunately, this is not the best time to be selling,” said George Economos, a Newport Beach broker. “There is just too much property out there to be moved. That’s why I would think there wouldn’t be a lot of excitement out there as there might be in a good year.”

The lack of through roads and the presence of toxic waste on the property promise to drag down the property value and its potential for development even further, Economos said.

Developers of anything but a future commercial airport, he said, would probably consider El Toro a “tear-down” project that could run alternative development costs to prohibitive levels.

“I would have to say that the highest and best use for the property would be some sort of an air strip,” Economos said. “But I don’t think (the sale) would bring very much.”

But when discussing El Toro’s possible life after military service, few even mentioned President Clinton’s well-publicized push for using the bases as shelters for the growing national homeless population.

Under the McKinney Homeless Assistance Act, any unused federal property, including military bases, may be eligible for use as shelter for the homeless.

Given the existing air strip and other factors, including real estate costs, Williams doubted that El Toro could be effectively transformed as a homeless center.

“Right now, I wouldn’t even propose (alternative developments),” Williams said. “I think we have a fair chance of (saving) at least one or two of these bases. But never did I contemplate so many of them to be in danger. It’s kind of staggering.”