Second in a two-part look into the financial realities facing the Great Park. Read part one here.
Irvine leaders — who have long dreamed of a Great Park featuring such things as a canyon wildlife corridor and man-made lake — suffered a rude awakening last year when Gov. Jerry Brown axed redevelopment agencies in his bid to balance the state’s budget.
The decision hit many cities hard, but few as hard as Irvine. All told, the city could lose as much as $2.2 billion in funding for the park over the next 40 years.
So what happens now?
That question, while being asked quite a lot lately in Irvine, has yielded few answers, at least in public.
A good number of city and park leaders continue to say they are optimistic about lawsuits they’ve filed against the state that would preserve the multibillion-dollar funding stream and that it is still too early to be talking about alternatives. They also point to a $22-million park expansion that is set to break ground in the coming weeks.
“We’re moving forward in this situation, so that certainly shows you the City Council and the Great Park’s commitment to continuing to build the park,” said Mayor Sukhee Kang.
But the progress Kang describes isn’t good enough for City Councilman Jeffrey Lalloway, a frequent critic of the park’s management. For months Lalloway has called for the public to be involved in turning loose ideas into official plans.
“There needs to be a public, open process of determining how the Great Park is going to be built, and unfortunately, despite my continued suggestions, that’s not happening,” Lalloway said.
There are, however, a few options being considered in the open. They range from land sales to increased building permits to public-private partnerships.
Sale of Public Land
Selling public land is possibly the fastest way to infuse park coffers with funds. But there are hurdles to such an idea, particularly when it comes to the land park leaders say could end up for sale.
Heritage Fields El Toro, the developer of thousands of homes around the park, may soon be granting 125 acres near the park center to the city, according to some officials. And selling that land could be lucrative, depending on what the city allows to be built there. Great Park Board Director Walkie Ray said the city could realize as much as $4 million per acre, or a total nearly $500 million.
“We can all do the math. A hundred acres times whatever sum you want, which is a nontrivial amount of money,” Ray said.
But Great Park Neighborhoods development manager FivePoint Communities has the right of first refusal for the land, Lalloway said, and the land is encumbered until 2018. Lalloway said that every piece of land at the park is encumbered in some way, making the sale of such land difficult.
For at least two years, various interests in the city have been kicking around the idea of building a privately operated 9,000-seat amphitheater in the park.
The amphitheater would sit in a spot that is currently the site of a recycling facility operated by Tierra Verde Industries, which has a lease that doesn’t end until 2018, according to a letter from the company.
But Great Park board Director Bill Kogerman says the recycling company’s lease would not interfere with development. The lease could be terminated should construction of an amphitheater become an option, he said.
“The principal guiding language is when we’re ready to develop, they’re going to have to relocate,” Kogerman said. “If we can get a public-private partnership on the amphitheater, I think that’s a moneymaker.”
More Housing Density
FivePoint is in negotiations with a City Council subcommittee to build a $200-million sports park. Although details of the negotiations have not been made public, the developer plans to more than double the number of residential units allowed around the Great Park, and city leaders hope to exact funds for a sports park in return.
Early ideas for the sports park have included several soccer fields, tennis courts and a “sports village” with amenities like a hotel and aquatics facility. The complex could total approximately 200 acres, city officials have said.
FivePoint President and CEO Emile Haddad declined to comment, and other city officials say it’s too early to report anything publicly.
Another idea, according Ray and other sources, would be to allow the developer to start building high-rises around the Great Park, a la Central Park in New York City. The advantages would be more fees from the developer and a captive audience of private donors living in the high rises.
“It’s no secret that FivePoint and the city are in heavy negotiations to see if there is some level of additional development,” Ray said.
But any idea that calls for increased housing density has its own hurdles, not the least of which being the city’s strict cap on the number of allowable car trips. Secondly, residential high-rises are considered money-losers in the current real estate market.
Ray said that a nearby rail line could help in reducing the number of cars on the road. The city could also create a transportation network using buses and rail between a sprawling outdoor shopping complex known as the Irvine Spectrum and the park, Ray said.
A Difference in Approach
Lalloway and other critics say these options must be explored publicly. There’s not a lot of time left for deciding on alternatives if the lawsuits don’t succeed. At a council meeting in January, Lalloway pushed to direct staff to devise alternative fundraising plans.
But Lalloway’s proposal was shot down in a 3-2 vote, with Kang and council members Beth Krom and Larry Agran voting no.
Krom speaks for the majority when she emphasizes that the park isn’t yet broke and that future events like the 2013 Solar Decathlon will help raise its profile.
“I just don’t see the urgency,” she said, adding she is not in favor of speculating on alternative funding ideas. “I hate dealing in speculation, because when speculation is commented on, it gives it credibility.”