Perpetual Indulgence

How taxpayers subsidize the Irvine Co.s Newport Coast development

Photo by Keith May"There is nothing more important to the Irvine Co. than its image," Martin Brower, onetime director of media relations for the Irvine Co., conceded in 1986. "The company has to communicate goodwill in order to continue getting permission to build." That might explain why Orange County's most insatiable real-estate developer calls itself "a good neighbor," a corporation "driven by conscience," whose legacy is "open space"—not bulldozers, concrete, zero-lot lines and traffic jams. But Brower, who publishes the pro-development Orange County Report, didn't get it exactly right. There is one thing more important to the Irvine Co. than a beneficent image: its addiction to lucrative taxpayer-funded subsidies—or, in today's political parlance, corporate welfare.

On June 29, the Orange County Board of Supervisors approved without one second of public debate a questionable environmental impact report (EIR) on massive development at Newport Coast and formally accepted the Irvine Co.'s related "gift" of 2,000 acres. The five county supervisors—all of whom take generous contributions from the Irvine Co. and its numerous intermediaries—raised not one question or concern about one of the largest, most complex development deals in Orange County history. In the simplest of terms, the company gets to permanently alter Southern California coastline with 2,600 new houses, a mammoth hotel and more than 100,000 square feet of commercial office space; the public gets what the company claims is free parkland. That sounds fine—just don't ask any questions. Inquiries into the deal were once dismissed by an Irvine Co. executive who sniffed to reporters, "I think we have been overly generous."

Unsuspicious of developers bearing gifts, The Orange County Register mimicked the Irvine Co.'s wily public-relations spin by proclaiming the land transfer the "largest gift of private wild land the county has ever received." Not to be outdone, the Los Angeles Times' Orange County edition applauded a "cognizant" and "seasoned" Irvine Co. and claimed in a headline, "Open Space Dreams Have Taken Root, Borne Fruit." As bulldozers demolish up to 74 ultrasensitive archaeological sites on the largest remaining undeveloped coastal space in Orange County, the Times is trumpeting that "it's been an eventful spring for the cause of open space in coastal Orange County."

Had the Register or Times bothered with even a cursory review of the arrangement, they would have found an outrageous publicly subsidized financial windfall for reclusive Irvine Co. billionaire Don Bren. The first clue should have been that the developer-paid and supervisor-approved EIR ludicrously asserted that the colossal 2,605-acre development is "small scale," would "reduce traffic" and have "no long-term environmental" impacts. The other critical details the company, the supervisors and the local daily press did not share with the public about the "gift" of land at Newport Coast's Los Trancos Canyon and Buck Gully include:

• Buried beneath the avalanche of hype about the land transfer is the fact that a sizable chunk of the donated land is located on sheer cliffs as steep as 90 degrees and thus would have been "open space" unsuitable for housing or any other development even if the Irvine Co. had kept the property.

• Thanks to county supervisors, taxpayers are now legally liable for the slopes that support the Irvine Co.'s astronomically profitable 2,600 new houses. Earlier this year, scientists discovered that Newport Coast is ground zero for a major earthquake fault line; nevertheless, the company demanded and the supervisors agreed to accept the land in an "as is" condition and to indemnify the company from any future liability.

• Taxpayers are responsible for the costs of building drainage facilities in the park to handle water runoff that originates from the Irvine Co.'s gated housing communities on top of slopes as high as 900 feet.

• Although the Irvine Co. was required to make an "irrevocable" land transfer as mitigation for their enormous development, the company inserted a clause into the contract that allows it to unilaterally change the boundaries of the public park in the future; according to the terms of the deal, future elected supervisors have no power to block the company from amending the offer.

• Private, million-dollar-plus properties in certain areas of Newport Coast "may" extend into the park.

• The Irvine Co. gets to place "without limitation" all of its development's electrical, telephone, cable-television, water, gas and sewer lines "on, over or under" the public park; the company also keeps all oil, mineral, water and natural-gas rights and can drill or mine on the property almost at will.

• Taxpayers assume all responsibility for the chemicals, pesticides and other hazardous materials that the Irvine Co. acknowledges may have been dumped on the parkland over the years; in the rare event that county officials would want to inspect the property before the deal was finalized, the company required an unusual five-day waiting period before the company's security forces would allow them in.

• All plans for the park, including the location of public trails, must be submitted to and approved by the Irvine Co., which gains veto power over park rangers and elected officials.

• Taxpayers assume potentially hundreds of thousands of dollars per year in costs to maintain the Irvine Co.'s manufactured slopes and ritzy roadway mediums on and near Newport Coast Drive.

Next Page »