Paradise to Punch Line; O.C. Image Takes a Hit : Fallout: Bankruptcy, flood and losing the Rams hurt perception. How quickly can the county bounce back?

In the most recent episode of “The Nanny,” a popular NBC comedy, the smart-aleck butler’s nemesis taunts him with the reminder that she manages his pension plan.

“I have three words for you,” she says with evil glee. “Orange . . . County . . . bonds.”

On cue, the butler’s eyes widen with horror and the audience howls with laughter.

Such is the precipitous fall from grace for Orange County--once a promoter’s paradise, now the punch line of prime-time jokes.

After two months of fiscal ruin, raging floods and fleeing Rams, the image of this affluent county is suddenly spattered with red ink and caked with mud.

“People are taking a harder look when they’re considering moving to the Orange County area,” said Richard Ganley, president of FAS-Hotline Inc., a national information service that each year counsels more than 5,000 families who are contemplating a move. “Based on recent happenings, based on our experiences and the people we’re helping to move, they’re taking a harder look with everything going on out there.”

One high-profile job going unfilled--perhaps because of Orange County’s sullied image--is the post of vice chancellor in charge of development at UC Irvine. Christopher Bryant, president of AST/BRYANT, the Los Angeles firm retained by the school to fill the post, said the job isn’t attracting the number of candidates it should.

“The Orange County bankruptcy could not have come at a worse time,” Bryant said. “When it happened, we had been talking to a lot of (candidates). . . . When we made follow-up contacts, it was, ‘Well what about this?’ What are we going to say?”

Of course, remedies for the county’s ailing image can be glimpsed on the horizon. The rains have subsided. The Rams have not left yet. And a small cavalry of accountants, lawyers and county officials are working on a plan to save the day and distribute the pain of a $1.69-billion investment loss.

But some worry that repeatedly televised pictures of this bankrupt municipality--reeling under the wrath of Mother Nature and losing a coveted sports franchise--will persist in the national consciousness, even after the county’s problems are solved or forgotten.

“Areas have prestige, and they have an image they portray to the outside world,” said Mark Baldassare, chairman of the Department of Urban Planning at UC Irvine. “Right now, our image to the outside world is in jeopardy . . . and that has economic implications.”

Executive recruiters, who woo people here from colder climes and more crime-plagued locales have been the first to see Orange County lose its Shangri-La cachet.

The bankruptcy, “is one more negative strike to overcome,” said a weary Elliot Gordon, head of the Orange County office of Korn/Ferry International, one of the world’s largest executive search firms.

Marketing experts warn that image can be difficult to gauge, and damage more difficult still. Many say the county’s current troubles are minuscule and meaningless when viewed against decades of positive press extolling Orange County’s climate, economy and way of life.

“It’s an 80-year migration of people, capital, energy and confidence--from the upper right-hand corner of the country to the lower left-hand corner of the country,” said Douglas W. Rae, a Yale School of Management professor and the former chief administrative officer for New Haven, Conn.

It will take more than a bankruptcy, Rae said, to disrupt such a steady trend.

“I think in the long-term, (the bankruptcy) is not a problem,” said Tom Buckles, professor of marketing at Chapman University. “California has always had a major image problem. . . . What you’ll find is maybe people who are pessimistic have a tendency not to come, and people optimistic and wanting to take advantage of an opportunity will. People lose interest in things real quickly.”

But other experts caution that the county is playing with fire when it takes its good image for granted.

“Maybe this is only of interest to widows, orphans and people who follow public finance,” said Don Haider, a professor at Northwestern University’s J.L. Kellogg Graduate School of Management. “But the only state to default during the Depression was Arkansas, and think of all the images we have of Arkansas.”

Several marketing experts said the county would do well to study how private industry tackles public relations headaches: Promptly, and without waiting to see what the harm might be.

“If (the county) had been a product in the corporate world, there would’ve been excessive public relations to counter the negative image already,” said Chiranjeev Kohli, associate professor of marketing at Cal State Fullerton.

Some business and government officials already are heeding that advice.

“Despite the fiscal debacle we are faced with . . . we have to communicate to Wall Street and people within the county and elsewhere in the world that Orange County remains an economically vital place,” said Joan Gladstone, a board member of the Orange County Business Council, which represents 2,100 local businesses.

Hoping to get that upbeat message across swiftly and loudly, Gladstone is heading a public relations SWAT team whose members recently drafted a marketing strategy for making Orange County the apple of America’s eye once more.

Gladstone said the cost of the plan would be borne by Orange County businesses who have a clear interest in restoring the county’s luster.

“Most companies in the county try to present the image that Orange County is the center of 21st Century technology,” she said. “If we’re going to position Orange County as being on the edge, the leading edge, bankruptcy could tarnish that image.”

Marketing experts say it’s too soon to predict specific consequences of Orange County’s strange series of crises. Some doubt there will be any consequences at all.

“I personally don’t think perception can lead economics very far,” said Jone Pearce, a behavioral psychologist and professor of management at the UC Irvine Graduate School of Management. “These things create volatility, but eventually it has to come back to reality.”

“There are a whole lot of really miserable places to live in this country,” said Mark Petracca, a political science professor at UCI. “I don’t think that . . . Orange County is one of them.”

However, if county supervisors raise taxes to resolve the county’s cash-flow bind, as many fear they must, experts warn of a prompt falloff in “brain capital”--a net loss of talented people and their credit cards, property taxes and new ideas.

“If some company in Atlanta is considering a move to Southern California,” said Petracca, “you might expect them to wait out and see how the county deals with the allocation of money.”

“The word is ‘uneasy’ in the market,” added James P. Meehan, president of JPM International, an executive search firm in Newport Beach. “The example is, if (out-of-state job candidates) were asking for $100,000, they now would be asking for $110 (thousand), $120 (thousand) to make up for what they perceive to be potential taxes that are going to be imposed upon them. And companies are wary.”

It isn’t only far-flung executives who are feeling uncertain. The natives are restless too.

The 1995 Orange County Executive Survey, conducted by UCI’s Graduate School of Management, finds that 53% of small businesses in Orange County believe the area is becoming less attractive to business.

By comparison, the survey found that only 20% of small firms held that view before the county filed for bankruptcy protection Dec. 6.

“One of the strengths we’ve had here, particularly in some areas, like Irvine, (is) we’ve been able to say, ‘Well, these are areas that have good public schools,’ ” Gordon said. “ ‘Your kid can get a good education in the public school system.’ ”

Now, Gordon and others are trying to sell Orange County to suddenly querulous candidates, despite the possibility that Irvine’s strapped school district may ask parents to pitch in and perform light custodial work.

“For now, the rest of the world has forgotten about the beaches, Disneyland and the mountains,” said Baldassare.

David Savageau, author of the “Places Rated Almanac,” which has become both a Bible and a barometer of regional perception, said images can be powerful economic forces.

“The loss, this enormous loss,” he said, “is going to affect a lot of people, because to them it means the entire county is broke and it’s going to be years before it digs itself out of this grave, and that’s a simple black-and-white perception.”

The most recent edition of Savageau’s book rates Orange County No. 1 among all U.S. metropolitan areas in the category of job growth. The rating was fixed when “Orange County financial troubles” seemed a whopping oxymoron.

But Savageau said he sees no reason to adjust the rating just yet, because Americans have a short memory span and an abiding ignorance about Orange County because it is so overshadowed by Los Angeles. “Orange County is a cipher in the American mind,” he said.

Southern California’s main liabilities, Savageau and others said, continue to be the threat of earthquakes, soupy air and legendary traffic jams. Bankruptcy merely brings a few more coals to Newcastle--or Newport, as the case may be.

“I can tell you, it certainly isn’t easy recruiting people here” recently, said Bob Hagel, vice president of Premier Relocation Services Inc., an Irvine consulting firm.

The prospect of public schools suffering through budget deficits for months or years has had a notably chilling effect on candidates with children, Bryant said.

“To get somebody with a couple of school-age kids to come out here, uproot the family, relocate--it’s difficult under the best of circumstances,” he said. “When you’ve got all these risk factors, who wants to do it?”

Orange County residents reassigned to other cities have always expressed a desire to stay put, said William Ellermeyer, senior vice president with the Orange County office of Lee Hecht Harrison, a national executive outplacement service.

No more.

“They’re inquiring about Phoenix, Colorado, Utah, Idaho, Seattle and Portland,” Ellermeyer said. “Those are the destinations. . . . In the last seven weeks, I’ve had people specifically mention the tax situation.”

Some are less alarmed than relieved by the prospect of fewer newcomers to the county. Petracca, an expert in local government, said such a reversal of fortune would suit him just fine.

“Part of me wants to say--a big part of me-- So what ? So what if no one else comes? We’ve got enough people here already.

“I think if you asked a whole bunch of people outside Ralphs or Albertson’s, ‘What would you say if there was not going to be a net gain of population around here in the next 10 years,’ I think few people would shed a tear.” Hagel added that literal and metaphorical black clouds looming over Orange County can have a silver lining.

In the past, for instance, the county’s greatest liability was its close association with Los Angeles. Bankruptcy, Hagel said, has helped the county step out of the megalopolis’ shadow and forge a separate identity:

“Some people have said to us, ‘Gee, I didn’t know Orange County existed before.’ This is what it’s taken to recognize who we are.”

* SURPRISE SUPPORT: Former critics come to the defense of supervisors. A17