Navy’s Doubts Sink Deal to Lease Hangar to Disney

After months of negotiations, a proposal for Walt Disney Pictures to lease a historic blimp hangar at Tustin Marine Corps Helicopter Air Station has fallen through, city officials said Tuesday.

“We were blindsided,” City Councilwoman Tracy Wills Worley said. “We’re very upset, to say the least.”

Worley said the city spent about eight months negotiating the deal, which would have allowed Disney to use the vacant hangar as a sound stage for two years. The Burbank-based film company wanted to use the spacious south hanger for an action film, “Armageddon,” starring Bruce Willis.

City officials said the deal was stalled by the Navy, which has final say over the use of the land. Navy officials disputed some parts of the lease regarding renewal options, and Disney walked away from the project amid the last-minute confusion, Mayor Jeffery M. Thomas said.

“We had done everything properly,” Thomas said. “Everybody had signed off on the lease until it went to the undersecretary of the Navy’s office, [which] had some problems with it. Disney needed assurances that we could not give them, so they pulled the plug.”

Thomas said the lease would have brought the Navy $65,000 a month in revenue.

“It would have gone a long way toward the closing costs,” said Thomas, referring to the base’s scheduled shutdown by 1999.

The deal’s collapse was a setback for the city, which has been aggressively seeking interim leases for the base property.

Thomas, Worley and other top Tustin officials are traveling to Washington next week on related business and said they plan to bring up the lease issue with Navy officials in the hope of averting such problems in the future.

Thomas said the city is talking to other film companies interested in using the hangar, which has 298,000 square feet of floor space.