The World Doesn’t Know the Real...

The word wealthy seems to be stuck to Orange County like a big, gaudy tattoo.

The county is constantly being characterized as one fat and happy place of Mercedeses, yachts and coastal estates. The bankruptcy has loosened the pens of more than a few pundits who see a quick, easy opportunity to juxtapose the financial catastrophe with what they assume is unbridled wealth.

“Also in Money Paradise You Can Go Bankrupt,” was how Germany’s popular tabloid Bild conveyed the bankruptcy filing last December. Read the headline in the Times of London: “Investment Fund Crash Bankrupts Home of the Rich.” USA Today continued the mockery of the county’s wealth and its predicament, proclaiming its residents “rich deadbeats” after voters overwhelmingly rejected the half-cent sales tax increase last month.

But for the most part, Orange County isn’t “wealthy.” The image is based on a tiny segment of the county that is hardly representative of the area’s 2.6 million, mostly average residents.

Consider the following census, state, federal and private data:

* Orange County’s income per capita was $25,022 in 1993, the latest year available. While that’s higher than the national and state averages, $20,864 and $21,895 respectively, it pales compared with California’s truly high-income counties, such as Marin ($38,310), San Francisco ($32,777) and San Mateo ($31,208).

* Were it not for Newport Beach, Laguna Beach and a couple of other upscale cities, which make up just a fraction of Orange County’s 31 municipalities, the area’s per-capita income would barely make the state average.

* More than 200,000 county residents live under the poverty line. And state income tax reports for 1991, the latest year for such data, showed that more than 40% of the filers reported gross incomes of less than $18,000; only 5% had incomes of more than $100,000.

* Deposits with commercial banks in Orange County as of mid-1994 were slightly below the statewide per-capita average. Bankers say that’s partly because the county is a newer region where most families haven’t accumulated wealth such as those in, say, San Francisco County.

“One of the myths about Orange County is that it’s a wealthy county,” says Mark Baldassare, chair of UC Irvine’s Department of Urban and Regional Planning. In reality, he notes, “there are mostly very average people in Orange County, and if you add in the [high] cost of living, they are average people struggling to make ends meet.”

Yet what is often cited in the media and elsewhere is Orange County’s median household income, which was $45,992, according to the 1990 census, compared with $35,798 for the state and $30,056 for the country.

Never mind that Orange County’s cost of living is among in the highest in the country. The same census, for example, showed median rent in Orange County was the highest in the nation at $790 a month, which was nearly double the nationwide median rent.

Also, one reason Orange County’s median household income is relatively high is that more members of households in the county are working compared with other counties. The latest census showed that 81% of Orange County residents ages 16 to 64 are employed or looking for work, compared with 76% for the state as a whole.

And look at what’s happened during the recession: From 1991 to 1994, foreclosures in the county jumped nearly 20-fold, more than many other areas in California; and Orange County lost about 45,000 jobs, many of them high-paying manufacturing work.

Marian Bergeson, an Orange County supervisor, worries that the bankruptcy has perpetuated the image of the county’s wealth.

“We’re looked on with disdain,” frets Bergeson, adding that even her friends from the East Coast view her county with the sort of contempt they might show a well-heeled man holding a tin cup.

*

Historians suspect perceptions of Orange County’s wealth took hold in the 1970s as part of a broader image of Southern California’s overall prosperity.

But views of Orange County’s wealth were further magnified by a few places that have become enduring icons of the region: Disneyland, South Coast Plaza, Richard Nixon’s Western White House, Newport and Laguna beaches.

The myth was further spun by rich and famous residents such as the late actor John Wayne (who had a home in Newport Beach); the opening of the well-to-do southern corridor of Orange County starting in the 1970s; and the region’s heritage of being uniquely conservative and white. (The county is actually about 40% minority.)

Stephen Rabin, a New York attorney who represents bondholders of Orange County notes, says all that he has heard and read about the county indicates it is affluent.

“It’s a wealthy county that was well able to pay off the bonds,” he said, a bit hesitantly. “It’s probably one of the wealthiest counties in the country. It’s well-to-do, it’s a high-income county.”

Then, after listening to some of the data cited in this story, Rabin uttered: “Hmmm . . . hmmm . . . Really?” He acknowledged he has visited Orange County just once. Where?

Newport Beach.

Comments like those from out-of-towners rankle county residents such as Al Gobar, a real estate economist who has lived in Fullerton since 1959 and knows better.

“When I travel and I say I’m from Orange County, they immediately picture that it’s Newport Beach,” Gobar says. “They think you live on the beach and you got a boat and it’s tied up in front of your house.” Having long become impatient with such remarks, Gobar often retorts: “No, I’m from Orange County.”

As Gobar observes, perceptions of Orange County’s wealth originated partly from Southern California’s pricey housing market. Wealth is equated with possessions, and Orange County residents live in relatively expensive homes.

A typical single-family house in Orange County in 1994 had an assessed value of about $176,000, 26% higher than the statewide average, based on an analysis of tax rolls and parcel data by TRW Redi Property Data. Some cashed out before home prices in the county began their steep decline, but most others remain heavily mortgaged, many having refinanced. So most homeowners aren’t as well off as their homeownership would suggest.

Says Gobar: “That doesn’t mean we’re wealthy. It means we have expensive homes. Wealth is a high standard of living.”

*

Unquestionably, Orange County does have its wealthy communities.

Newport Beach and its 69,000 residents, for example, have an per-capita income twice the countywide average, according to Claritas, a New York research firm. The median value of a house there last year was about $381,000, nearly double the rest of the county. Its harbor is renowned, as are its many multimillion-dollar estates.

And Newport Beach, which is 92% white, is the home of some of the country’s wealthiest people, including Irvine Co. Chairman Donald L. Bren, whose personal fortune was recently estimated at $2 billion by Forbes magazine.

“Old entrenched money has been in Orange County for years,” says Don Soucie, who heads Sanwa Bank’s trust office in Newport Beach. Among others are the Segerstroms, a longtime farming family who turned much of a lima bean farm into South Coast Plaza, a nationally preeminent shopping mall; and the Irvine family, heirs of Irvine Ranch founder James Irvine, whose land holdings stretched from the coast of Newport Beach to hills of Anaheim.

Soucie adds that the county has a relatively high number of households with incomes more than $250,000, though an exact tally wasn’t available.

Even so, those households and affluent towns make up a tiny segment of the county. For example, Newport Beach, Laguna Beach and Villa Park, the three highest-income cities in the county, combined represent just 4% of the county’s population and 3% of its land mass.

Santa Ana, the county’s largest city with 310,000 people, has an income per capita of $14,860. Santa Ana’s unemployment rate is typically twice that of the county’s, which last year averaged 5.8%.

Anaheim, the county’s second-largest city, also falls below the state average in income per capita, though the poverty there seems to be overshadowed by Disneyland and the row of hotels and other tourist attractions. And some of the county’s other larger cities--Buena Park, Garden Grove, Westminster--are hardly paragons of wealth.

*

Overall, approximately 120,000 residents in Orange County are currently receiving welfare--more than double the total a decade earlier, says the county’s Social Services Agency. Another 56,000 residents are on food stamps.

“Orange County has some fairly significant poverty pockets,” said Bill Gayk, the county’s longtime demographer, who was laid off because of budget cuts resulting from the bankruptcy. “That segment of the population is growing.”

Indeed, the county as a whole has been in the midst of unprecedented change since 1980, when it was 87% white. Waves of immigrants, mainly from Mexico and Asia, have settled in.

Though some are educated professionals, among the immigrants are many low-skilled workers. That has resulted in the need for more social services and has lowered the county’s per-capita income.

Supervisor Bergeson and others said they have had difficulty convincing state officials that Orange County needs both sympathy and aid from state social programs. Many outsiders find it hard to believe that the county has problems with, say, homeless people--who Bergeson says number at least 12,000 on any given night.

“We are really suffering from the myth that has been perpetuated over the years,” UCI’s Baldassare says. “There is the notion that we ought to be able to take care of it or that it’s not that big of a deal, that this wealthy and spoiled group of people should be able to take care of this themselves.”

*

But perceptions of wealth have also had their benefits. The golden tattoo that Orange County officials are now trying to rub off has, in the past, been a badge of honor.

Over the years, that image has helped attract residents, businesses and investors. Even people who weren’t wealthy wanted to live near those who were.

Businesses still go to great lengths to get a prestigious Newport Beach address, even if they don’t operate near it. Residents and out-of-towners alike figure a prosperous region will provide better security, schools and services, and make for sound investments.

Charles Schonfeld, a retired businessman who lives in Hillsborough, an upscale suburb south of San Francisco, admits he bought $1.26 million worth of Orange County bonds largely on the county’s reputation as a wealthy area. Schonfeld says his salesman sold him on the pitch that “there was nothing better in California than Orange County.”

Schonfeld says he doesn’t regret his decision to invest in the county, and he remains hopeful that Orange County will make good on its debts. But many others, shocked that bankruptcy could befall a place such as Orange County, have all but given up on the county.

That worries Ray Dellerba, president of Eldorado Bank in Irvine, who believes Orange County’s wealth image had also brought it respect and credibility--benefits that are now in jeopardy.

“The perception was of high value,” Dellerba says. “I think the perception now is one of questionable value.”

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Personal Income Per Capita (1993) (Among the 58 California counties)

Rank County Amount 1. Marin $38,310 6. Orange 25,022 12. Ventura 22,033 14. Los Angeles 21,661 16. San Diego 20,950 25. Riverside 18,012 41. San Bernardino 16,468 California $21,895

Commercial Bank Deposits Per Capita (1994) (Among the 58 California counties)

Rank County Amount 1. San Francisco $35,188 9. Los Angeles 7,897 13. Orange 7,234 29. San Diego 5,813 40. Ventura 5,107 52. Riverside 3,555 54. San Bernardino 2,801 California $7,285

Assessed Property Value Per Capita (1993) Among the 58 California counties

Rank County Amount 1. Mono $166,850 15. Orange 68,313 21. Ventura 62,030 29. Los Angeles 54,843 31. Riverside 54,688 33. San Diego 53,959 40. San Bernardino 46,236 California $56,880

Note: Based on 1993-94 property taxes; includes all private and commercial properties; excludes those exempt from taxes--mainly government buildings--as well as business equipment and inventory. *******************************************

Orange County Income Distribution (Adjusted gross income per tax return) $1-$17,999: 42% $18,000-$27,999: 15 $28,000-$37,999: 11 $38,000-$47,999: 8 $48,000-$99,999: 18 $100,000 +: 5

Note: Latest data available; includes individual and joint filings

Orange County Income Per Capita Cities above county average are home to 591,252 people, 23% of county total; those below average have a combined population of 1,794,840, 75% of total

City Income Population Newport Beach $49,593 68,784 Laguna Beach 42,020 24,253 Laguna Niguel 32,130 52,552 Dana Point 28,794 33,957 Mission Viejo 28,665 84,087 Yorba Linda 28,543 56,540 Seal Beach 27,575 26,031 Lake Forest 26,808 58,182 Huntington Beach 26,580 186,866 County average 25,344 San Juan Capistrano 25,279 27,904 Los Alamitos 25,230 12,173 Laguna Hills 24,515 24,994 Irvine 23,425 117,902 Brea 23,374 34,001 San Clemente 22,388 44,166 Fullerton 21,874 119,527 Fountain Valley 21,796 54,260 Orange 21,024 116,259 Cypress 20,598 44,942 Costa Mesa 20,543 101,048 La Palma 20,253 15,635 Placentia 20,224 43,096 Tustin 19,813 57,454 La Habra 19,538 53,177 Anaheim 19,302 285,477 Buena Park 17,343 71,696 Garden Grove 16,245 149,700 Westminster 16,042 81,072 Santa Ana 14,860 308,379 Stanton 13,868 31,978

Note: Excludes Villa Park and unincorporated areas Sources: California Department of Finance, State Board of Equalization, Federal Deposit Insurance Corp., California Franchise Tax Board, Orange County Economic Development Consortium

Researched by DON LEE / Los Angeles Times