Orange County Voices : COMMENTARY ON BASE CONVERSION : Initiative Can’t Guarantee Airport, but It’s Sure to Cost a Lot : Before sealing a deal with Irvine Co., why not see what El Toro’s worth on the open market? We’d be foolish to do otherwise.

The recent news that the Irvine Co. is interested in swapping gnatcatcher habitat for the El Toro Marine Corps Air Station underscores a point that was already becoming abundantly clear: The November airport zoning initiative would dramatically interfere with the rational disposition of the base property.

The initiative will ask Orange County voters to decide: Should the 4,700 acres of prime Orange County real estate that now comprise the El Toro base be zoned exclusively for “airport-compatible uses”? I will vote against this initiative, because it would needlessly devalue the taxpayers’ investment by millions of dollars. And while it is meant to hasten the construction of an El Toro airport, it will do nothing to guarantee that one is ever built.

In Shakespeare’s “Henry IV,” when Glendower boasted that he could call forth spirits from the vast deep, Hotspur made the simple but telling reply: “But will they come when you do call for them?” The initiative will not cause an airport simply to materialize from the spirit world. But if enacted, it would nonetheless outlaw every other conceivable use for this valuable land--even though no one has yet advanced a viable proposal to finance and construct an airport.

This is the “Airfield of Dreams” approach to public policy: Zone it, and they will come. But they may not come. And of course, even without this exclusionary zoning, the property could be used for an airport. What makes the land potentially so valuable--to the Irvine Co. or any other purchaser--is that it might also be used for a multitude of other purposes.

Ironically, downzoning this parcel in Orange County’s midst would also have the guaranteed effect of weakening the taxpayers’ hand in any subsequent negotiations with the Irvine Co. or other potential buyers. By dramatically restricting the use of the El Toro property, the initiative would eliminate one of the most fundamental elements in the bundle of rights possessed by its would-be owners: the ability to use the property as they see fit. That, in turn, would slash its market value to a fraction of what it is now. And since the taxpayers currently own this billion-dollar asset, it is the taxpayers who would incur the hundreds of millions of dollars in loss immediately upon passage of the initiative.

This is troublesome no matter what use is ultimately chosen. If the property is exchanged for endangered species habitat, the Interior Department will receive less habitat because the parcel it exchanges it for will be worth less. If the property is sold, the taxpayers will receive less money for it--money that could have been used to pay the estimated $1.2-billion cost of moving the 3rd Marine Air Wing from El Toro to Miramar.

The Base Closure Commission decided to close El Toro, despite this huge cost, because of the high land values in Orange County. Among 130 bases recommended for closure nationwide, only the El Toro decision was based upon the underlying sales value of the base property. It was always assumed by the commission that selling the property for value could offset the expensive burden on taxpayers imposed by the closure, and that taxpayers would thereby profit over the long run.

Today, that logic is being stood on its head. Instead of realizing the value of the property through sale, many people--not just airport backers--are clamoring for all manner of “free” government uses for it. The federal Bureau of Prisons is eyeing the parcel lustily. Homeless groups, relying upon the McKinney Act, are just as interested in this “free” land. In each of these scenarios, the taxpayer takes the hit.

What, then, should be done to wisely dispose of the El Toro property and protect taxpayers?

Instead of indulging their personal predilections, politicians responsible for the fate of El Toro should remember they are trustees for the taxpayers. That standard requires that elected officials treat other people’s money as if it were their own.

If you owned 4,700 acres in the midst of Orange County, how would you handle your investment? Would you apply to the county for a restrictive zoning ordinance that would prevent you from selling it for any but a single purpose? Or would you instead advertise the property widely, to gain some idea of who might be interested in using the land, and for what purpose?

The proposed initiative, however, would zone first and ask these questions later. What a tragedy it would be if we legally restricted the property to be used only as an airport, but subsequently, no one came forward to build us one. Yet there is ample reason to be skeptical on this point. An international airport, in 1999 dollars, would likely cost at least $3 billion. Where will such money come from?

The federal government is cash-strapped, and hasn’t funded a new airport since the now-infamous Denver catastrophe. (The ongoing Securities and Exchange Commission investigation into the issuance of Denver’s airport bonds may poison this source of funding for the indefinite future.) Likewise, the state of California is hardly in a financial position to build an international airport for Orange County.

Bereft of government funds, perhaps politically conservative Orange County could blaze a trail for a privately funded airport. But there are few precedents: only the British municipal airports, and Ross Perot’s cargo field in Texas, come to mind. And even if it were possible to line up firm commitments to finance and construct a private airport, navigating the near-endless regulatory barriers to such a novel project could take decades. Meanwhile, the parcel would be useless to the government, the Irvine Co. or anyone else. And it would yield no property taxes--funds that could be used to support such worthwhile initiatives as an Orange County hospital.

Instead of making anticipatory zoning decisions in ignorance, we should use the Pentagon’s base reuse planning funds to advertise this property worldwide. We would not be bound to accept any of the bids. But responses to the advertising would provide valuable real-world data concerning possible uses. We could also learn which portions of the property are more valuable than others, the market impact of environmental concerns and the availability of financing for various uses from willing sponsors.

Armed with this information, the federal government could make a much more realistic assessment of how much the base property should be worth in a potential exchange for the Irvine Co.’s land. Likewise, local government (or the voters) would be far better equipped to decide how best to zone the land. Open space and tax-consuming government uses could be allocated to the least valuable portions of the parcel. Attractive uses that haven’t even been suggested yet could be permitted by a more flexible zoning rule. Even a zoning decision to restrict an otherwise viable use would at least be made with full knowledge of the opportunity cost.

By taking the time to identify the full range of potential uses and users, and the differing values that they place on the property, Orange County will make a far better decision. That means that everyone will come out ahead. To the extent that some or all of the property is sold or exchanged for value, Orange County would get an expanded tax base. Taxpayers will have gotten the best possible price, thereby maximizing whatever it is they get in return for the property--be it endangered species habitat, or cash to offset base-closure expenses that would otherwise require more taxes or deficit spending.

The initiative, in contrast, offers a lose-lose proposition: It can’t guarantee an airport, but it will guarantee that the taxpayers are shortchanged.