85 Acres, Huge Hangar: A Difficult Gift for O.C.

It is an impressive gift: 85 acres and a historic building to boot. But Orange County officials aren’t quite sure it is a windfall.

The county is scheduled to inherit a portion of the closed Tustin Marine base -- including one of its two massive World War II blimp hangars -- for use as a specialized county park with a private operator. But county officials say they are in no rush to take ownership.

“People think it’s free land,” said Michael W. Hentzen, leasing coordinator for the county’s Harbors, Beaches and Parks division. “But it is not really free.”

It would cost millions for the county to simply clean up and maintain the property, to say nothing of turning it into a full-scale park, Hentzen said, and that’s money the county doesn’t have.

So developers have been invited to submit proposals for turning the site into a moneymaking venture. Those proposals have called for a winter sports complex or a military museum. But daunting expenses for infrastructure -- roads, power lines, sewage and water pipes -- make the project unattractive to many builders, jeopardizing plans to create the park and preserve the historic hangar.

The property is in the middle of a spartan military facility that needs preliminary work before it can be made suitable for homes and parks. Whoever develops the county’s park may have to pay as much as $13 million for a pro-rated share of the base’s infrastructure costs, according to county estimates.

“This is the albatross around the neck of this project,” said T.J. Orr, who heads a group of investors interested in turning the hangar into an indoor winter sports arena. “It just doesn’t pencil out.”

The county’s challenge stems from a related problem faced by the city of Tustin.

When the Navy announced in 1993 that it would close the 1,600-acre base, Tustin was given responsibility for overseeing its redevelopment and the right to sell about 1,300 acres to pay for roads and other infrastructure needed throughout the base. The Navy set aside the remainder of the land for public uses, such as schools and the county hangar park.

But at the last minute, the Navy held back 240 acres to sell on its own to developers, to raise money for the federal government. And Tustin was forced to sell 70 acres to cover a court settlement with the Santa Ana Unified School District, which argued that it was entitled to a share of the base.

This left the city with only about 1,000 acres to sell. Though this should raise hundreds of millions of dollars, the proceeds still may not be enough, city officials say, to pay for infrastructure.

In addition, the city has a short-term cash problem: The settlement with Santa Ana’s school district left it with no money to begin preparing the land for development.

“We can’t use land-sale proceeds for infrastructure if those proceeds are targeted to pay” lawsuits, said Tustin redevelopment manager Dana Ogden.

In October, a master developer was selected for 700 of the city’s 1,000 acres, where 1,800 homes, shops and a golf course are planned. The city is still negotiating the terms of the sale and development.

But still undetermined is how much developers will pay for infrastructure.

Commercial and residential developers may be willing to accommodate increased costs, said Mitchell G. Bradford, a vice president at John Laing Homes, which has bought about 67 acres for housing. It is in everyone’s interest to have the base redeveloped as soon as possible, he said.

But the challenge is more daunting for the county in building its park -- because such a use is unlikely to generate as much revenue as homes or purely commercial development.

“The city and the county are offering nothing but just passing through the costs,” said Orr, whose indoor sports arena would charge $30 to $60 admission to snowboard or ski on artificial snow inside the cavernous blimp hangar.

The hangars, which are 17 stories high, 1,088 feet long and 297 feet wide, were used to house blimps that patrolled the Southern California coast during World War II. One is in disrepair and probably will be torn down. The other’s fate depends on the county finding a financially feasible project for the park that would surround and be part of it.

Earlier this month, the county sent out requests for proposals to six groups, including Orr’s, that have shown interest in renovating the hangar and putting it to use.

Five of them propose building indoor winter sports arenas. The sixth proposal, by a local veterans organization, would turn the hangar into a giant military museum with life-size models of battlefields ranging from the American Revolution to the Vietnam War.

All of them will have to show detailed financial plans explaining how they would cover the infrastructure costs and the $15 million to $20 million needed to renovate the hangar, county officials said.

A consultant hired by the county last year has concluded that the military museum would require subsidies to operate.

But museum backers have challenged that conclusion. They say they could raise enough money to operate the museum without taxpayer help. But their initial fund-raising efforts are being hindered by the county’s reluctance to give them access to a building near the hangar. That’s where they want to set up a center to demonstrate to potential donors that the museum is a serious proposal, said Bill Manes, president of the United Veteran Organizations of Orange County.

“We had some expectation that we could be in the building by May or June or July, at the latest,” said Manes. “Now, we don’t even know when or even if we can get into the building.”

County officials said they can’t grant access because they don’t own the land yet. They are working with the Navy to arrange for an interim lease so the museum supporters can set up their center.

If the hangar park is to be developed, some suggest, the county will have to look beyond private investors to pick up the infrastructure tab. Orr says the county may have to subsidize a portion of the cost.

“We don’t seem to be able to put together such packages for parks,” he said, “but we do it all the time for baseball and football stadiums.”