REAL ESTATE : Surplus Space From Defense Cutbacks Could Cause Cities Problems for Years

Unless the private sector and local governments come up with joint solutions, Orange County cities such as Fullerton that are targeted for defense cutbacks will face lingering real estate woes, according to a new study from Kenneth Leventhal & Co., the Los Angeles accounting firm. Fullerton is home of a 350-acre facility for Hughes Aircraft Co., which last month announced the largest plant closure in Orange County history.

Without solutions, millions of square feet of surplus office, industrial and manufacturing space vacated by the defense industry could remain idle for years. This would hurt local economies, according to the 38-page study, titled “Real Estate Strategies for a Changing Defense Industry.”

“You need to have forward thinking and regional planning,” said Michael Meyer, managing partner of the firm’s Newport Beach office. “Cities need a workable plan for reuse of defense facilities that will enhance property values and bring in sales taxes or other revenues.”