ORANGE COUNTY IN BANKRUPTCY : OCTA, Supervisors Say They're Still Interested in Airport-Transfer Plan : Recovery: Dormant option gets new life despite glum task force report. Popejoy says talk only instills false hope.

ORANGE COUNTY IN BANKRUPTCY : OCTA, Supervisors Say They’re Still Interested in Airport-Transfer Plan : Recovery: Dormant option gets new life despite glum task force report. Popejoy says talk only instills false hope.

By JODI WILGOREN

June 22, 1995 12 AM PT

TIMES STAFF WRITER

SANTA ANA — Officials of the Orange County Transportation Authority and several supervisors said Wednesday that they want to continue investigating a possible transfer of John Wayne Airport from the county to OCTA, pumping new life into a bankruptcy recovery option most experts had left for dead months ago.

The optimism over a proposed transfer came despite a gloomy report by a special airport task force and several independent lawyers about the massive legal, financial and political obstacles blocking use of the airport as a revenue-raiser for the bankrupt county’s general fund.

“We know we are in uncharted territory. There are very high hurdles. However, we believe they can be overcome if there’s a collective will to overcome them,” OCTA Chief Executive Stan Oftelie told the Board of Supervisors at a special afternoon session. “A key issue is that this has to be mutually beneficial to the county and to OCTA. We should work together.”

Oftelie acknowledged that a transfer might require a vote of county residents and could take more than a year, too long to rescue the county from its most pressing problems, some $800 million in short-term debt due this summer. He also said that any deal would have to include an option on the El Toro Marine Corps Air Station, which might be converted into an airport.

But if the legal hurdles could be cleared, he said, OCTA could raise about $250 million to buy the airport, and might be able to forgive $220 million in debts it is still owed by the county.

Supervisor Roger R. Stanton, who proposed the airport transfer in 1992 and helped revive the notion last week while announcing his opposition to Measure R, the proposed sales-tax hike on Tuesday’s ballot, said he believes the move makes good public policy sense, and that “there is a chance” it could net the county much-needed cash as well.

“There’s a synergy there. I think it’s obvious. It makes more sense to group transportation functions together than to have transportation with health and welfare,” Stanton said. “It would be foolhardy to ignore this and to reject it out of hand. It would be irresponsible of us not to pursue these questions.”

Supervisors Jim Silva, William G. Steiner and Gaddi H. Vasquez also said they wanted to explore the possibilities of a transfer. The fifth board member, Marian Bergeson, whose district includes the airport, hesitated, saying: “There seem to be very many more questions.”

Top county staffers and consultants, however, reiterated their stance Wednesday that the airport is not a viable source of new money. They criticized Oftelie and Stanton for instilling false hope about the airport just days before the crucial election on the sales tax hike intended to raise $130 million a year for a decade and plug the massive hole left by the county’s failed investments last year.

“Debt forgiveness is not new revenue. Are they willing to bring to the table dollars? New cash? And if so, how soon?” Chief Executive Officer William J. Popejoy asked at the meeting. “What we’re trying to do is focus on solutions that are possible, not ones that take forever--or never--to accomplish.”

Seemingly the county’s most valuable asset with an annual revenue of $58 million, the airport has been a hot topic of discussion since the county filed for bankruptcy protection Dec. 6.

But federal law prohibits the use of airport revenue for anything other than aviation, and no public airport has ever been sold to a private entity. In addition, the airport carries more than $250 million in outstanding debt.

OCTA is looking for a way to transfer John Wayne Airport without diverting any revenue. Lawyers at Wednesday’s meeting said they were unsure whether debt forgiveness would be permitted as payment for the airport, or whether a payment from OCTA could be funneled into the county general fund.

“I would never stand here and say there isn’t some lawyer out there who could get around this restriction. But I can’t do it,” said Mike Gatzke, airport special counsel.