El Toro Airport Financing Plan Outlined : Development: $4 billion in construction costs can be financed by selling bonds to investors, proponents say. Opponents say taxpayers be affected nonetheless.

The debate about the plan to build a commercial airport at El Toro Marine Corps Air Station continued Thursday at a forum where experts discussed the issue in detail for the first time, including ways to finance the project.

The experts’ reports were followed by a spirited panel debate. They fielded questions from a group of reporters and about 450 people who filled a hotel meeting room. The morning session, held across the street from John Wayne Airport, was organized by a consortium of Orange County business groups.

Billed as an “unbiased, factual examination of the issues,” the forum did little to change the minds of most attendees, who apparently had already staked out positions on Measure A, an initiative on the November ballot that would require a commercial airport at El Toro when the Marines vacate the base in 1999.

Opponents of the initiative pointed out that three of the seven business groups sponsoring the discussion have already endorsed the measure.

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Still, those present heard for the first time an explanation of how proponents of the civilian airport expect to pay the estimated $4-billion construction cost.

Michael Patrick George, western regional director of P. Morgan & Co., said the airport can be financed by selling bonds to private investors. One of the experts who spoke at the outset of the forum, he said local taxpayers would not be obligated to bail out bondholders if the airport fails.

“The risk of development falls on those who invest in the bonds used to finance the airport. There clearly is enough demand in Orange County to service the debt,” George said.

Like supporters of Measure A, George said a new airport would generate a “significant growth in business and jobs.”

However, David Celestin, a consultant and former vice president of planning and governmental relations for the Mission Viejo Co., challenged George, saying the multibillion-dollar project is too costly to be funded through the sale of bonds alone. He argued that county officials would have to help fund the project by raising developer fees and property taxes, which ultimately would be paid by homeowners.

“On the surface, the proponents’ arguments make sense: new jobs, more revenues,” said Celestin, one of the panelists, who answered questions from reporters and the audience.

But Celestin said the trade-off would be “higher taxes, lower property values, noise pollution and unsafe skies,” because a civilian airport at El Toro would be eight miles from John Wayne Airport.

“Who’s to say an alternative use (other than an airport) wouldn’t provide more opportunity for more jobs and more revenues,” Celestin said.

The El Toro Reuse Planning Authority, the county agency studying how the 4,700-acre base should be developed once the Marines depart, is considering several alternatives, including a commercial airport. The study will not be completed until June, 1995.

Earlier this year, a coalition of business and political leaders placed on the ballot an initiative that would require the county to build a commercial airport on 2,000 acres at El Toro. Supporters say a new airport would create 21,645 jobs in Orange County and generate $170 million annually for local governments.

Opponents of Measure A have complained that the county’s special planning authority for El Toro is the only one recognized by the Defense Department and have attacked sponsors of the initiative for “planning through the ballot box.” The Defense Department is not obligated to give up the property to the county under the base closure law.

The Pentagon will have to endorse any development plan drawn up by the planning authority, and there are questions about whether the Defense Department would even recognize Measure A’s mandate.

The bickering over the initiative versus the conventional planning process continued at Thursday’s forum.

Bill Vardoulis, a former Irvine mayor and member of the planning authority, said the county agency is “attempting to build a consensus” in Orange County on the development of the Marine base.

“We (opponents and supporters of Measure A) all have the same goal in mind, to maximize the use of that property,” Vardoulis said.

Chapman University President James L. Doti, who supports a commercial airport at El Toro, responded that the nine-member county agency--composed of the supervisors, three Irvine council members, including Vardoulis, and a Lake Forest council member--is biased because five members oppose the airport.

“I’m not afraid of democracy, but a better approach would be to let the market decide,” Doti said. “If we fail to capture El Toro, we will be placing a cap” on Orange County’s economic growth.

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Earlier, he said that if an airport were built at El Toro, the undeveloped land around it could be used for other enterprises, including low-cost housing.

Celestin scoffed at Doti’s comment, arguing that zoning laws would then require the surrounding development to be compatible with the airport.

Janice M. Mittermeier, director of John Wayne Airport, said a consulting firm hired by the county planning agency will study whether the Marine base can and should be converted to a commercial airport.

If the county authority chooses an airport for the site, then officials will have to decide whether it should be used primarily to handle passengers, international cargo, long hauls or short hauls, or some combination of cargo and passengers.

“We will also look at the cost analysis and how much revenue an airport would generate,” Mittermeier said.

But Vardoulis warned that the federal government can still throw the county’s plans for El Toro into a tizzy if the Irvine Co. and the U.S. Department of the Interior go ahead with a proposed land swap. Under a plan that is being discussed by both sides, the Irvine Co. would gain control of El Toro in exchange for thousands of acres it owns in northern Orange County, bordering the Cleveland National Forest, which the company would deed to the Interior Department.

Vardoulis said federal agencies have first claim on military bases that are being closed. He said the Interior Department would have to submit a request to the Pentagon for El Toro by Dec. 1.

“If the Department of Interior request is approved, everything will go away,” Vardoulis said.