Money, control would come via Newport plan

June Casagrande

For more than 20 years, the city has based its airport policies on

the belief that someday there would be two commercial airports in

Orange County.

That someday may never come.

In the last few years, and especially in the last few months, most

people have come to agree that prospects for an airport at the closed

El Toro Marine Air Base have gotten pretty bleak. On Nov. 12, a

county agency agreed that the 4,700-acre site will be annexed to

Irvine, virtually assuring that John Wayne will continue to be the

only commercial airport in the area.

Newport Beach officials have done what they could to assure that,

no matter what happens at El Toro, John Wayne Airport won’t expand

into a monstrous operation sending voluminous flights over its

residents’ heads at all hours of the day and night. The city’s most

powerful tool to assure this end has been the John Wayne Settlement

Agreement, a document that puts caps on growth and flight increases

at the airport.

But that document expires in 2015, and afterward, no one knows

what might happen.

Newport Beach wants to take action now. An item likely to be

approved by the council at its meeting tonight would set in motion a

process that could allow the city to take over a number of different

county functions directly affecting its borders, most notably John

Wayne Airport.

The city proposal would create a “Sphere Issues Committee”

composed of Mayor Steve Bromberg and Councilmen Tod Ridgeway and John

Heffernan, the same people who as the Airport Policy Review Committee

drafted the proposal.

The new committee will request an audience with county leaders in

hopes of sitting down and analyzing some county-run properties on and

within Newport’s borders. The goal will be to identify areas in which

transferring control from the county to the city could actually

benefit both entities.

“I really look at this as a way of sitting down and looking at

opportunities for greater efficiencies,” City Attorney Bob Burnham

said.

The city’s plan addresses major areas: county-owned tidelands

within Newport Beach, the Santa Ana Heights Redevelopment Agency, the

Coyote Canyon Landfill and, of course, John Wayne Airport.

CLEAR UP THE COAST

The Coyote Canyon Landfill is the most straightforward of all the

proposals. The closed landfill produces potentially hazardous methane

gas, which the county now maintains to assure the public health and

safety. City officials think they might be able to do this more

efficiently and with Newport Coast residents’ interests an even

higher priority.

County-owned tidelands within Newport’s borders also provide a

chance for the city to exert greater control on land within its

borders. But the real benefits of increased city control here are a

little more subtle.

The two main county-controlled tidelands within Newport are the

Back Bay and Newport Dunes. No development is possible on the Back

Bay. The Newport Dunes property is already pre-approved for a

275-room hotel -- an option its owners have so far chosen not to

exercise. If the city took control of this tideland area, the city

would likely have no more power to stop a hotel there.

But if the city took over these tidelands, it would have more

power to apply for federal grants, especially for dredging -- grants

that the city tends to be far more aggressive and effective at

procuring than the county.

“There would be fewer agencies for us to deal with to make

applications,” City Manager Homer Bludau said.

Taking over the tidelands could also streamline the process for

maintaining Back Bay Drive and hillsides in the area that sometimes

slough off and require maintenance. Further, Newport Dunes is

required to pay into a tidelands trust fund in return for being

allowed to operate in a public tideland area.

Last year, Dunes operators paid about $2 million into the

tidelands fund. Much of that money pays for the county sheriff’s

Harbor Patrol, which the city might also want to take over.

Therefore, taking over control of the tidelands could help pay the

cost of the city’s taking over the Harbor Patrol.

A LUCRATIVE PIECE OF LAND

The Santa Ana Heights aspect of the city plan has its most

important implications in the fine print. The city has said that it

is interested in annexing West Santa Ana Heights and several small

parcels nearby only if it can also take over control of the Santa Ana

Heights Redevelopment Agency. The agency is extremely lucrative. It

brings in about $3.7 million a year over and above what’s needed to

pay off its own debt. Partly as a result, the agency has about $35

million sitting in the bank.

Though that money is earmarked specifically for Santa Ana Heights

improvements, it could also present some opportunities to spread the

wealth citywide. For example, some money set aside to build a fire

station to serve Santa Ana Heights might also benefit the rest of the

city because that fire station would likely also serve a portion of

Fashion Island.

City officials had tried before to get the county to agree to hand

over the redevelopment agency along with annexation. But preliminary

talks with county staff members left city officials pessimistic that

the county would hand over the entire redevelopment area.

THE BIGGEST GOAL

The biggest contributor into the redevelopment funds is John Wayne

Airport -- the one part that the county seemed least likely to hand

over. But under the city’s new far-reaching plan, John Wayne Airport

might no longer be a sticking point because it, too, could come under

city control.

The main benefits to the city of taking over the airport is

obvious: The city could have control over airport expansion. But a

look at the books provides some interesting insight.

Financially, the airport is an extremely solid operation.

In 2002, the airport cost $59 million to run and brought in $76

million in revenue, for a roughly $17 million operating income. The

income goes into a reserve, which as of June 30 had accumulated to

nearly $39 million.

The federal government is very strict on how such money can be

spent: Airport revenue can only be spent on aviation-related items

and cannot, for example, be put into a county or city general fund.

Whether the city could find ways to leverage this airport’s financial

strength remains unclear.

What is certain is that the city would use any power it had at the

airport to assure that residents suffer as little airport noise and

pollution as possible. But city leaders said that, if they were to

take over managing the airport, they would work to assure the

interests of everyone in the region.

“We’ve got a responsibility to all of Orange County,” Bromberg

said.

* JUNE CASAGRANDE covers Newport Beach and John Wayne Airport. She

may be reached at (949) 574-4232 or by e-mail at

[email protected].