For lease: vintage World War II-era offices, warehouses, other buildings. Great location, rich in local history, potential. Site of former military base. Code-challenged.
That’s right, sometimes lost in the fight over building a grand airport or great park at the former El Toro Marine base is the fact that there is leasable space at the site.
On this point, both airport and park supporters agree. But how much of the property is useable and how much revenue leases could generate is,like all things El Toro,a point of bitter contention.
“The economic analysis that we commissioned demonstrates that these resources will generate over $25 million annually in net revenue,” said Irvine Mayor Larry Agran on a recent radio program.
Agran’s dollar figure assumes Irvine and other airport opponents can lease some 3 million square feet of space at El Toro to bankroll the cost of creating a park at the former base. The park, envisioned along the lines of New York’s Central Park or San Diego’s Balboa Park, would supplant plans for a commercial airport.
Park supporters point to potential leases of existing warehouses, housing, office and agricultural land at El Toro. Lease revenue would be put into an endowment to build OC’s great park, they say.
“This is another Larry Agran project financed by the tooth fairy,” blasted David Ellis of Irvine-based David Ellis & Associates LLC, which represents airport backers. “To assume they could lease all that space on day one is nonsense.”
A recent survey commissioned by airport backers found it would take eight years to lease out all the property at El Toro. Even then, leases likely would generate only $8 million a year by 2010, leaving a huge funding gap for a great park, the report said. Airport supporters contend the difference would have to be made up with new taxes (see editorial, page 75).
While details about the great park proposal still are sketchy, backers estimate they could get 40 to 80 cents a square foot per month for El Toro space. That’s well below the prevailing rate of $1.20 in the adjacent Irvine Spectrum, but still high, critics say.
Some buildings at El Toro are 60 years old, not up to code and in need of major improvements,if they aren’t too far gone and need to be demolished altogether.
Other former military bases are fetching 15 to 20 cents a square foot for unimproved facilities,most of which need major rehabbing, according to the airport backers’ study.
The county is wrapping up a survey of some 200 buildings at El Toro, according to Bryan Speegle, planning and environmental team manager for the county’s El Toro Local Redevelopment Authority.
Less than one-fourth of the buildings are deemed high priority, according to Speegle. That means revenue generated from leases might outweigh the costs of rehabbing about 43 buildings, he said. Of those, eight have been given a relatively clean bill of health, he said.
The county already is operating the El Toro golf course and a daycare center. The officer’s club is available for parties and wedding receptions. And there are plans to improve the horse stables.
But the state of most of the El Toro buildings is a big concern.
“A lot of these buildings were built during World War II,” said Joe LaCava, vice president of La Jolla-based Interra Strategies Inc., which worked on the airport backers’ study. “They’re old, outdated and not up to code. There are problems with asbestos, electrical wiring, the (heating and air conditioning) and the seismic codes.”
Still, LaCava said, El Toro could gain interest from a particular type of tenant: “Someone looking for a temporary or lowball opportunity. Someone between buildings, or looking for temporary warehouse storage. But not a tenant looking to pay market rates.”
Under the county’s plan,and presumably under that of great park supporters,tenants would be responsible for fixes to El Toro space.
These days, El Toro faces stiff competition from a ready supply of available real estate nearby. But even a few years from now,hopefully in a better economy,would anyone be willing to pay even below-market rates for unimproved military facilities?
According to real estate sources, there is interest. California State University, Fullerton, and Irvine-based auto dealerships are said to be in talks for El Toro space, local brokers said.
“We’ve received strong interest from numerous nonprofit organizations, educational institutions, community services, recreational users and warehouse-industrial users,” said Seda Yaghoubian, planning consultant with the El Toro Reuse Planning Authority, a 10-city coalition opposed to an airport at the former base.
Bob Reicher, a local real estate analyst with Grubb & Ellis Co., said the base could fill a particular niche: “There is a legitimate need for big-box warehouse space. There’s virtually none of that available in Orange County, forcing tenants to look to the Inland Empire.”
But, Reicher said, in the case of most El Toro buildings “there would be few established companies who would be interested unless they offer dirt-cheap rates.”
Meg Waters, a spokeswoman for airport foes, disagrees with the assessment of what the properties might fetch.
“The county has grossly undervalued the property,” Waters said. “Certainly, it’s not class A property, but we believe it’s revenue-generating property, and we contended there is the potential for millions and millions of dollars of revenue at El Toro.” n
