County Urged to Pull Together on El Toro Base Plans

Orange County risks squandering one of its biggest economic opportunities ever if it does not pull together as a community to develop a base conversion plan for the El Toro Marine Corps Air Station, two economic and financial experts said Tuesday.

“Given the size (of the 4,700-acre base) that’s at stake here, given the crossroads that Orange County (faces) here in the restructuring of its economy, the failure to take the initiative, the failure to capture the opportunity is as big a risk as this community faces,” warned Michael Patrick George, managing director of J.P. Morgan Securities Inc. and a member of his firm’s base conversion task force.

George’s comments to an Orange County business and political group meeting at the Irvine Hyatt Regency were preceded by the release of a study by two Cal State Fullerton economists who predict that the local economy will grow weaker in the short run as the result of cuts in defense contracts and the El Toro base closure.

With 35,000 jobs already lost from 1987 to 1991 as the result of national defense spending cuts, Orange County could lose another 12,100 jobs by 1997--a 30% decrease in the 40,800 defense-related jobs remaining in the county at the close of 1992. The jobs represent 3.7% of Orange County’s total employment.

The economists calculated that the annual spending and payroll of the El Toro base pumps about $152.2 million into Orange County’s economy. And with the multiplier effect that occurs with the re-spending of those dollars, the base is worth about $231.6 million a year to the local economy, according to the economists’ study.

While the loss of that money will hurt in the short term, “in the long run, there are potential gains the county may be able to achieve,” said Anil Puri, Cal State Fullerton economist who co-authored the report with economist Robert Kleinhenz.

“How effective the reuse (plan) is will help us, to a large extent, offset the losses I mentioned,” Puri said during the luncheon meeting sponsored by the Industrial League of Orange County and the Executive Council of Cal State Fullerton’s School of Business Administration and Economics.

The Industrial League has been invited to join the 21-member county advisory task force that will recommend a base conversion plan for El Toro. The structure of the county’s planning task force is being opposed, however, by several cities--particularly in the South County--that demand a share of the final decision-making authority on the redevelopment plan.

George, a San Francisco-based investment banker whose firm studied about 80 military installations placed on the closure list before 1988, offered Orange County advice on how to proceed with its base conversion planning.

Failures are likely to occur, he said, if conflicting parties “dig in their heels” on their own redevelopment plans without truly considering all the options.

“When you start out knowing the conclusion, you rarely are able to capture the opportunity,” said George, who said his company is seeking business with Walt Disney Co.’s Westcot project and would also be interested in the El Toro redevelopment project.

But “success stories,” he added, have emerged where disparate interests were able to work together to develop a base conversion plan.

He strongly suggested that a single agency be created--one that would have land use control, be able to create a consensus and carefully watch over any needed environmental cleanup--which he claimed is grossly underfunded by the federal government.

South County cities are considering creating a “joint powers” agency that would compete with the county’s planning task force.