Improvements in Orange County's Great Park include a large orange… (Allen J. Schaben / Los Angeles…)
The grand park that officials had promised would be built on a retired Marine base in the heart of Orange County was in jeopardy Wednesday after state officials ruled that $1.4 billion in property funds can't be spent to transform the sprawling stretch of land into what had been billed as America's next great urban park.
The funds make up much of the money that was to be tapped to turn the old base into urban parkland that would feature a rugged man-made canyon, lakes, orchards, meandering pathways and dozens of athletic fields.
The state's ruling leaves Irvine scrambling for alternatives, such as a scaled-down park.
"Are there options? Sure," Irvine Councilman Jeff Lalloway said. "Are the options going to be to the same scale that was originally promised? No."
The city was relying on taxes collected from housing and commercial development to be built surrounding the Great Park to fund the project, with $1.4 billion expected over 45 years. But the state Legislature's decision to eliminate redevelopment agencies means the money is no longer Irvine's to spend on the Great Park.
Irvine received the decision from the state Department of Finance on Friday and filed a lawsuit the same day asking for a temporary restraining order to prevent the state from taking any funds until the issue is settled. A hearing is scheduled Thursday.
Lalloway said $2 million to $3 million currently is at stake, with more than a billion dollars in future tax funds hanging in the balance.
Since Gov. Jerry Brown announced that he wanted to steer redevelopment funds to the state, Irvine has been looking for other ways to help fund the Great Park. Lalloway said the city has been in negotiations with developer Fivepoint Communities Inc. about nearly doubling the number of homes it is planning to build around the park while cutting back on commercial development.
Current plans give Fivepoint the right to ring the park with as many as 4,894 homes.
In January or February, Lalloway said, the developer offered to trade the rights to develop about 1 million square feet of commercial property at the edge of the park for an additional 5,800 homes, mostly single-family residences.
The two sides have continued negotiations, with the most recent meeting taking place Wednesday. Fivepoint's offer is a complicated deal in which the city would receive around $200 million, said Lalloway, part of Irvine's two-person negotiating committee.
Other possibilities to raise funds include public-private partnerships, such as the Verizon Amphitheater's anticipated move to the Great Park. And the Anaheim Ducks, Lalloway said, are interested in building a practice facility for the professional hockey team as well as two other rinks for public use that the team would operate.
In addition, he said the city could sell off pieces of the former Marine base, and possibly market other pieces of city land to raise money.
Still, that doesn't make up for the potential loss of $1.4 billion.
The result, Lalloway said, is almost certainly to be a scaled-down park.
"Is it going to be the interesting park and not the Great Park?" he asked. "It's not going to be what it was originally contemplated because the income stream won't be there."
The Great Park was the object of one of Orange County's greatest political battles. The Board of Supervisors wanted to build an airport on the old base, but county voters decided in 2002 that they preferred Irvine's idea of building a showpiece that would rival Griffith Park, San Francisco's Golden Gate Park or San Diego's Balboa Park.
City leaders made a deal with a developer to build homes and businesses around the park that would provide the tax revenue that would underwrite the construction and operation of a 1,350-acre park.
But the housing market collapse slowed development. And while millions of dollars have been spent on the park's design and other costs, much of the property remains the way the Marines left it — runways, barracks and old hangars. The improvements, including a large orange balloon that takes visitors aloft to look at the view, are mostly clustered on one corner of the property.
Irvine Councilman Larry Agran, one of the leaders in the fight to turn the base into a park, said he didn't understand why the state Department of Finance wouldn't approve the park funding.
"What could be more worthwhile than building housing on what used to be blighted military land," he said, "and restoring that land to the tax rolls and creating a great metropolitan park in Orange County."
Times staff writer Tony Barboza contributed to this report.