The Orange County Grand Jury has launched an inquiry into the $649.5-million acquisition of the closed El Toro Marine base by one of the nation's largest home builders and the role of Irvine officials in planning for a huge public park there.
The scope of the probe remains unclear, but Irvine officials have come under attack in recent months over the way contracts have been handled for the Orange County Great Park, the centerpiece of a 3,400-home community being developed by Lennar Corp.
The company bought 3,700 acres of the base from the Navy last summer in the largest private purchase of a closed military facility and will transfer 1,300 acres to Irvine for the park. Another 1,000 acres are being preserved as wildlife habitat.
The probe probably is part of the grand jury's watchdog role, to ensure that public money is properly spent, said Wally Kreutzen, chief executive of the city's park board, the nine-member panel planning the park for Irvine. He said he hadn't been asked to participate in the current inquiry.
Grand jury members, he surmised, "are seeing headlines, and they want to know if there's something there."
Irvine Councilman Larry Agran, chairman of the park board, said he didn't know what prompted the inquiry but understood the grand jury's interest.
"We're going to be handling easily over time a half-billion dollars, and that's got to be pretty important to look at," Agran said.
Funded by developer fees and assessments on new homeowners, the park will become the second-largest municipal park in Southern California, after Griffith Park in Los Angeles.
The grand jury has wide authority to launch investigations of government dealings, make public its findings and turn over information to the district attorney's office for criminal investigation. The 19-member jury is impaneled every year from citizen volunteers. Members generally meet in secret and also hear criminal cases presented to it by Dist. Atty. Tony Rackauckas.
The grand jury's interest in the park came to light recently when a member called a city secretary about it this month.
"They want to look at the funds and documents that were exchanged between the Navy and Lennar, and between Lennar and the city of Irvine," said a city e-mail message from the secretary regarding the call.
The juror asked to set up an interview with Councilwoman Christina Shea, who has long criticized management of the Great Park project and what she calls Agran's role in directing contracts to allies, including millions of dollars paid to high-powered political consulting firm Forde & Mollrich in Newport Beach.
"This interview is part of a preliminary phase of questioning," said the e-mail, which was shared with The Times. It was sent Jan. 4 to Shea, with copies to Kreutzen, Irvine acting City Manager Sean Joyce and to Shea's private attorney.
"They are interested in the period of time after Measure W," the message said, referring to the March 2002 ballot measure that killed the county's plans for an international airport at the base and paved the way for the city's control of the property, which was sold at auction.
The grand juror told the secretary that "this subject is not at the subpoena level," the message said.
The message concluded by saying that one of the jurors planned to interview Agran "sometime in the future, after he speaks with you."
The grand jury investigation was first reported by the alternative newspaper the O.C. Weekly last week. Shea confirmed her interview but declined to comment on the probe, citing the confidentiality of grand jury proceedings.
Agran's handling of the Great Park project and other city business drew criticism last year.
Those critics -- including Agran council adversary Shea and former Councilman Chris Mears, a longtime Agran ally -- questioned why firms favored by Agran received no-bid contracts for work and why Agran's political benefactors were setting up for-profit landscaping and nursery companies hoping to provide plants for the park. Agran denied steering business to friends and said anyone could contact the city hoping to land a contract.
The park board's dealings came under scrutiny again in May, when retired Irvine Co. executive Richard Sim resigned, accusing the Agran-led board of waste and cronyism.
Sim was critical of the board's awarding of another lucrative contract to Forde & Mollrich without putting the work out for bid, and even questioned whether Kreutzen, former head of the public toll road agency, was fit to pilot such a major undertaking.
Reached Monday, Sim said he hadn't been contacted by the grand jury but renewed his criticism of the park project. "They've spent millions, and they don't have anything to show for it," he said.
Disagreement centered on how to spend about $400 million in developer fees and other assessments, most to be paid by Lennar to build the park, roads and other public works projects. In July, company officials handed the city a ceremonial check for $33.3 million, the first of three development fee payments Lennar will make over the next two years.
The Great Park board -- including all five Irvine council members and four appointed members -- spent more than $1 million on an international search for a master designer for the park. Expenses included $50,000 for fact-finding trips to Barcelona, Paris and New York by seven members of the Great Park board, including the five Irvine council members, plus five park board staffers.
The winning design firm among three finalists is scheduled to be selected at the board's Jan. 23 meeting.
Plans call for a 2008 opening for the park, with the first nearby homes going up for sale the same year.