Too Big to Fail

By Michael Stockstill

Conceived as an alternative to a commercial airport, the Orange County Great Park was born — after a multiyear political battle — with $200 million and a promised future as "the first great metropolitan park of the 21st century."

Located at the former El Toro Marine Corps Air Station in Orange County, California, the park was the centerpiece of a ballot measure approved by county voters in March 2002. A year later, after annexing the military base, jubilant Irvine city leaders promised to turn part of the closed base into a recreational oasis comparable to New York's Central Park or San Diego's Balboa Park. 

That was 12 years ago. Of the $200 million the city was paid in 2005 by Lennar — the initial developer — about $30 million was left as of December 31, 2013, according to the Great Park operating budget. And while some 230 acres of the Great Park have been improved, most of the former base looks much as it did when decommissioned in 1999: two massive, largely intact runways and abandoned buildings scattered amid hundreds of acres of weeds.

Stepping up

Uncertain about the park's destiny, in November 2013 a divided Irvine city council approved a plan to allow an additional 4,600 houses to be built in exchange for leasing 685 acres of parkland to the city's current development partner, FivePoint Communities, which pledged to fund $215 million in recreational improvements and operational and planning costs before the end of the decade. And while $215 million is hardly chump change, it is far less than the estimated $1.4 billion needed to implement the park master plan. And under the FivePoint plan, several of the plan's signature elements will have to be carved away.

Three years before the November vote, FivePoint had entitled 5,000 homes and hundreds of thousands of square feet of commercial space on former base land next to the Great Park; FivePoint recently sold its first 700 residential lots. (FivePoint is the successor to Lennar and its commercial arm, LNR, which purchased El Toro from the federal government for $649.5 million in July 2005. A subsequent agreement with the city of Irvine required Lennar to dedicate 1,347 acres for the Great Park and contribute $200 million to fund park planning and construction.)

In late spring 2013, FivePoint began preparing its second phase of development, immediately adjacent to the park's empty interior. Faced with explaining the park's nebulous future to prospective buyers, FivePoint CEO Emile Haddad (who formerly worked at Lennar) offered to front both construction and operational funds for the park in exchange for additional homes.

There is already some critical mass at Great Park: four lighted soccer fields, picnic areas and playgrounds, and repurposed airplane hangars where dozens of concerts and other events have been held. Nearby is the Farm + Food Lab, where gardening classes are oversubscribed and a weekly farmers market is thriving. Visitors can ascend 400 feet on a tethered helium balloon or give their children rides on a refurbished carousel. A 105-acre working farm is leased to growers who donate tons of crops to local food banks as well as sell produce commercially.

The park recently opened a new visitor center and reflecting pond. A timeline of historical events painted on a remnant of runway has been lengthened, and new restrooms installed.

But what exists at the Great Park is a shadow of the grandiose vision touted through much of the last decade by park leaders, who repeatedly promised that many of the park's signature improvements were "coming soon" and that the $36 million spent solely on the park's master plan would pay dividends.

As the months and years passed, Irvine's historic political divisions began to color Great Park governance. Contentious board meetings and personal agendas combined with legitimate policy disputes about how to manage a multimillion dollar, 1,300-acre development. As time passed and relatively little construction occurred, negative media coverage increased, as did criticism by other elected officials.

The tale of how this $200 million baby went from riches to rags begins, like many political stories, with power.

How it started

While Measure W outlined a conceptual "Central Park" for the former military base, its principal goal was to drive a stake into the heart of plans by three Orange County supervisors to transform El Toro into a commercial airport. That battle had raged for six years before passage of Measure W in 2002. The supervisors washed their hands of the issue by supporting Irvine's annexation of the base and the Great Park (the county retained a 100-acre parcel at the park's edge; a few warehouses in the same vicinity were turned over to local nonprofit groups).

Initial plans for governance of the Great Park described a board of "no more than seven, and up to 30 directors, two of whom shall be officers or employees of the City of Irvine." The park was to be a nonprofit corporation. Organizational efforts were under way when the city council switched course and rewrote the relationship between the city and the Great Park board of directors. When the bureaucratic dust cleared in April 2006 (a year after the nine-member board began meeting), all policy and fiscal authority was vested in the city council; the Great Park board of directors was left with only advisory responsibilities.

The action prompted the first examination of the Great Park by the Orange County Grand Jury, which labeled the park governance plan "inconsistent with the spirit and intent of Measure W."

With a solid three-vote city council majority, Councilman Larry Agran was elected chairman of the Great Park board, which embarked on a worldwide search for a master designer. Ken Smith, a Harvard-trained landscape architect, got the nod for a plan that envisioned a two-mile-long landscaped canyon bisecting the huge, flat landscape; a large lake and signature bridge; a bosque; a botanical garden; and parking lots planted with orange trees — all supported by a system of sustainable water reclamation and energy generation.

There would be a grand entrance, with a giant sculpture arching over fountains. To accommodate museums and art galleries, the Smith plan envisioned a cultural and historical district overlooking the lake. In recognition of El Toro's World War II heritage, a veterans memorial was planned. Another key part of the master plan was a sports park, which would ultimately become the lynchpin of the FivePoint housing-for-park deal.

When the master plan debuted in late 2007, there was reason for optimism. Park and Lennar properties were placed in the city's redevelopment zone, where tax increment revenues would generate an estimated $1 billion over 40 years, close to the expected park construction cost. Lennar fanned the enthusiasm with a gift of a giant orange helium balloon that became the park's symbol. The Smith plan received awards from APA, the American Institute of Architects, and the American Society of Landscape Architects.

Storm clouds

But signs of discord began to emerge.

Richard Sim, a former senior executive with the Irvine Company, the city's master planner and developer, resigned as a Great Park director 18 months after joining the board. He criticized the pace of park spending, especially for public relations. 

The popular golf course on the property was eliminated from future plans. A proposed cemetery was quietly erased, prompting a lawsuit that was settled out of court. A woman died after falling at the park's seasonal ice-skating rink. Her family sued the park and city and received an undisclosed settlement.

After two years on the job, the park's first CEO was abruptly transferred to a city hall job and replaced by the city's public works director; he lasted just four months as CEO before retiring. The city's assistant city manager was assigned to run the park in June 2007.

Landscape architect Smith assembled multiple firms and individuals as the Great Park Design Studio. But they had never worked together before, and soon clashed with Great Park employees over contract terms, billing support documentation, quality of work product, and a common approach to moving the project from paper to reality.

Some board members and journalists questioned why a political consulting and marketing firm got a no-bid contract and was paid the unheard of fee of $100,000 per month. No-bid contracts became an ongoing source of controversy, but most were renewed year after year by the park board and city council.

Michael Ellzey, the fourth CEO in five years, was hired in August 2008. Ellzey, who had worked on public construction projects in Northern California, replaced some of Smith's consultants.

Then came the recession. Lehman Brothers, Lennar's key lender, went bankrupt in 2008. FivePoint's Haddad later described the bizarre task of sifting through the Lehman financial rubble to determine who inherited its debt. Lennar cut staff and hunkered down to conserve cash.

Business as usual

Great Park officials were still optimistic. The annual "State of the Park" speech in July 2009 noted that despite "bankruptcies, foreclosures and (soaring) unemployment," the park was moving "forward, forward, forward, even in these very difficult times." Councilman Larry Agran promised to "activate" the sports park by constructing eight soccer fields, implement "extensive terraforming" (grading) of the lake and cultural districts, and start construction of the wildlife corridor.

The ever-changing status of the sports park exemplifies what critics called a lack of transparency.

In the master plan, the sports park was described as a 165-acre comprehensive sports facility with lighted soccer fields and baseball diamonds, a climbing wall, basketball courts, a skateboard park, and other amenities. The sports park ranked at the top of the public's wish list; Agran told OC Metro magazine in 2004 that $60 million of the $200 million would be earmarked to complete it.

In his 2007 State of the Park speech, Agran said the park would "make good on our promise to deliver some outstanding youth and amateur athletic facilities at the earliest opportunity." In 2008, development of the sports park would "closely follow" the Western Sector construction. In 2009 it was "activating" the sports park with eight soccer fields (four in 2009, four "later"). In 2010, there was no reference to the sports park in the State of the Park address. In late 2011, an Orange County Register story analyzing revisions to the park master plan listed the changes to the sports park:

• Soccer arena will be picnic meadow and ice rink.
• Multipurpose fields are now a festival site.
• Five soccer fields replaced by North Lawn and parking lot
• Eleven tennis courts replaced by water basins.

Plans to demolish the huge runways seemed to be in a constant state of flux as well. In line with the park's sustainability goals, a contractor that had demolished Denver's Stapleton Airport runways was hired and produced plans to recycle virtually all the runway concrete and asphalt. Discussions ensued between park staff, Lennar, and the contractor, stretching from months to years.

In early 2008, the contractor quit, dragging expensive equipment back to Colorado. Yet five months later, the State of the Park address promised "actual breaking up of runways will begin next month." Finally, in an April 2010 Register article, Ellzey said the park decided not to remove the runways but "design around them." It now appears that when FivePoint's construction of the park begins, major sections of the runways will finally be removed.

From 2007 until late 2009, when little was being done on the large-scale elements of the park, programming expanded with concerts, funding for an artist-in-residence, gardening classes, and introduction of a farmers market. A key factor in the park's ability to sustain program spending was Lennar's, then FivePoint's, multimillion-dollar annual contributions for park operations and maintenance as requirements of three successive development agreements. In 2012–2013, $11.6 million of the park's $17 million noncapital budget came from FivePoint.

With public pressure mounting, Ellzey convened meetings with park staff and consultants, which led to the unveiling in October 2009 of a $65 million construction program for about 200 acres of the park next to the 27-acre "Preview Park" that contained the balloon, a refurbished hangar, visitors center, and small playground. The Western Sector plan was approved in February 2010, and a few months later, construction began on four soccer fields, a 105-acre farm, and a new "Palm Court" building and plaza designed to showcase cultural programs.

Press criticism of the Great Park accelerated in 2010 and 2011. Mainstream media including the Register and Los Angeles Times were joined by the local alternative paper, OC Weekly, in a steady barrage of pointed stories. Columnists lampooned the park mercilessly, fueling negative perceptions about the park's governance and future. And a second grand jury report questioning park finances was released.

Body blows

Park leaders and staff cited attendance as a principal measure of success, touting more than half a million visitors annually. More and more large-scale events like mud runs and charity walks were happening at the park because of its wide-open spaces.

In January 2011, the park got a boost when FivePoint Communities announced a revised funding agreement with investors. Haddad promised to deliver lots to home builders by early 2013. Moreover, some of the $40 million in promised infrastructure improvements would start to be built within the park.

Then, just weeks later, California Gov. Jerry Brown dealt Irvine and dozens of other cities a blow by shutting down redevelopment agencies and seizing unencumbered funds. The nearly $1 billion in future revenue that Irvine needed to fund Great Park development vanished.

Heading into the election year of 2012, Great Park had become the city's defining political issue. In November, Agran lost the mayor's race to Stephen Choi, and Christina Shea was returned to the council after a six-year absence. (Agran remains on the council until his term ends later this year.)

Choi, Shea, and sitting council member Jeff Lalloway dumped the four independent members of the Great Park board of directors, and then ordered a forensic audit of past Great Park spending. The new majority also dismissed the consulting firm and its $100,000 monthly fee, as well as the city's lobbyist. And they replaced the contract city attorney (the firm was rehired a few months later).

A subdued Ellzey delivered a Great Park business plan in March 2013 that eliminated 44 programs — most of them free to the public — while instituting fees for the balloon and carousel. "It is time to change the way we do business," he said.

In late June 2013, park staff presented a $45 million construction plan in line with the new council majority's promise to "start building the park." Some $27 million (from regular park in-lieu fees for Irvine Company development near the park) will fund new infrastructure in areas of the park that could attract private partners to improve them. The council also ratified plans to hold the U.S. Solar Decathlon at the park in October 2013. The decathlon, sponsored by the U.S. Department of Energy, attracted student teams to build demonstration energy-efficient homes. More than 65,000 people attended over two weeks.

While the new majority was making public decisions, behind-the-scenes negotiations with FivePoint were under way with a council subcommittee of Lalloway and Choi. In spring 2013, Haddad outlined his offer to the council in a lengthy memo, but there was little public or press reaction.

Haddad was anxious — the housing market was heating up, and the lots he would soon finish overlooked still-fallow Great Park acreage.

Hanging fire

Just after Labor Day, Haddad initiated a public relations campaign to sell the $200 million offer. The centerpiece was the long-awaited sports park, but also included a large bosque, a golf course (replacing the canyon), bike path, and dog park, plus multiyear funding for park operations. FivePoint promised to build out 685 acres of the park within five years if the city would lease the land to them and cede control of design and construction. (The park land would be returned to the city upon completion.)

Irvine youth sports leaders started a support effort for the FivePoint plan with full-page ads in the Register, press releases, and letters to the editor. FivePoint rounded up endorsements from local environmental groups concerned that a long-promised wildlife corridor would not be built without the developer's plan. 

Years of frustration with Great Park finally had a focus. Hundreds of residents jammed the council meetings, with supporters bringing along children in soccer uniforms for good measure. With a last-minute tweak extracting additional funding and limiting FivePoint oversight of finished park facilities, a 3–2 vote sealed the deal.

The afterglow of the FivePoint agreement had barely faded as the new year began and once again the Great Park was making news.

• Results of the audit of Great Park spending ordered a year earlier were released, with focus on the no-bid contracts, questionable billing practices, and what the Register called "a culture of political pressure and cronyism." After vigorous debate on the findings, the city council voted to expand the audit, instructing its special counsel to issue subpoenas if necessary to obtain information from past Great Park contractors, and retaining a well-respected retired superior court judge to act as the mediator for the audit.
• The U.S. Environmental Protection Agency removed 1,900 acres of land owned by the Great Park and FivePoint Communities from the federal Superfund cleanup list. While large parts of the Great Park will continue to undergo remediation funded by the Department of the Navy, city and FivePoint officials hailed the action as a positive step.
• The city agreed to host the 2015 Solar Decathlon at the Great Park, with the promise that the U.S. Department of Energy would bear the total cost of the event.
• The Great Park staff, including CEO Mike Ellzey, was folded into the City of Irvine, with park operations personnel assigned to the city's community services, public works, and public information offices, moving from separate quarters into city hall.

So while planners, politicians, auditors, and developers rehash the past and future of the Orange County Great Park, visitors will still gaze from the big orange balloon at the imposing vista of the park's 1,375 acres — a vista grand enough, it would seem, to fulfill any vision, public or private.

Michael Stockstill is a freelance writer in Irvine, California, and a retired public affairs executive who worked in the public and private sectors in Southern California.

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Resources

Images: Top — Built on the former El Toro marine Corps Air Station in Irvine, California, the 1,375-acre Orange County Great Park has been called the first great metropolitan park of the 21st century. Photo by Fred Emmert. Middle — The parkland its attractions (including its iconic orange helium balloon and Movie on the Lawn series) draw more than half a million visitors annually. Photo by Jeff Antenore, courtesy Orange County Great Park Corporation, www.orgp.org. Bottom — The city of Irvine and Second Harvest Food Bank of Orange County partnered to launch the Incredible Edible Farm at Great Park in February 2014. The 4.5-acre urban farm is expected to produce enough fresh food for an additional 156,000 meals for Orange County's needy families. Photo by Barbara Wartman, courtesy Orange County Great Park Corporation, www.orgp.org.

City of Irvine: www.cityofirvine.org

Orange County Great Park: www.ocgp.org