Orange County Great Park is on track to become Irvine’s Pretty Good Park now that state officials have determined that the project will not get the $1.4 billion in local property tax revenue the city was depending on to build it.

A grand, metropolitan park was promised to countywide voters a decade ago when they rejected a proposed international airport. The fight over the destiny of the air base was one of the most divisive and intense political and legal battles in Orange County history.

California Department of Finance declared that the 1,347-acre project controlled by Irvine is not entitled to an exception under the state law that eliminated redevelopment agencies and their projects to reduce state budget deficits. The property taxes would have come from the new homes and commercial sites built on the rest of the 4,682-acre decommissioned military base.

The revenue would have come over 45 years to pay back debt incurred in creating the park. Divided evenly, that’s roughly $31.1 million each year.

Irvine has filed a civil lawsuit in Sacramento Superior Court to contest the state’s decision. The city also requested a temporary restraining order to stop the state from taking up to $12.4 million in park funds held by the county auditor-controller, but Judge Michael P. Kenny on Thursday denied that request.

State finance officials made their determination based on the redevelopment-elimination law as it was written by the California Legislature in June 2011 and upheld by the California Supreme Court, finance department spokesman H.D. Palmer said. It was not in any way a judgment on the merits of the project itself, he added.

The state in essence found that Great Park spending does not qualify as a previous “enforceable obligation” of debt service payments that must continue to be honored. Redevelopment agencies in the past received local property tax revenues that would normally have gone elsewhere if they incurred debt to fix up blighted areas.

Irvine argues that it has two “enforceable obligations.” The first: Irvine’s pledge to Lennar Corp. to build the Great Park in exchange for the developer giving the park land to the city when it purchased most of the former air base from the United States Navy. The second: the now-extinct Irvine Redevelopment Agency incurred qualifying debt when it borrowed $134 million from the city of Irvine – at 9 percent interest – to buy two parcels from the city of Irvine.

The state Finance Department rejected both of those arguments, finding that neither of those qualifies under the law, Palmer said.

Irvine City Council members were the directors of Irvine Redevelopment Agency, though the two panels were considered separate legal entities.

Elected officials in Irvine don’t agree on what losing the tax means for the future of the Great Park.

City Councilman Jeff Lalloway said $1.4 billion in lost funding cannot be replaced and that unless the city wins its lawsuit, the park will have to be significantly and dramatically scaled down from what “previous City Councils” have promised.

The initial, elaborate plans for the park included amenities such as a man-made canyon and lakes.

“There is absolutely no way” the park can be built as it was advertized without the redevelopment funding, Lalloway said. He said they might find another $200 million on top of the $200 million they already received from development fees.

City Councilwoman Beth Krom, who along with Councilman Larry Agran spearheaded the Great Park project, disagrees. Even if the city loses the litigation, she and her colleagues will not abandon their initial vision for a grand, urban-style park, and will find another way to fund it, she said.

“We are not willing to lower our standard of what we want” there, she said. “We will continue to move the project forward by any means necessary. We have succeeded before, and we will succeed again.”

Lalloway has been an outspoken critic of how his predecessors and colleagues have spent the initial $200 million it received from developer fees. About $50 million was spent on producing a master plan and detailed designs, he said. And too much has been spent on consultants, public relations efforts and marketing instead of creating useable facilities, Lalloway contends.

Amenities already open at the park include a 7-acre multi-use grass lawn, a helium balloon ride, a farmer’s market, picnic areas and an arts complex. The park had about 600,000 visitors last year.

The City Council has allocated about $22 million to build the next phase of the Great Park, which will include its first sports complex, Krom pointed out.

The city has been looking for alternatives to help fund the Great Park for several months. Officials have been in negotiations with developer Fivepoint Communities Management Inc. – a Lennar Corp. spinoff company in California – about doubling the number of homes around the park from 4,894 to about 10,500 while cutting back on commercial projects.

That could bring in significant revenue to build the park, but won’t come close to $1.4 billion, officials said. They will also be focusing on public-private partnership deals, such as the ice rink that the Anaheim Ducks wants to build at the Great Park.

The Great Park brings in some revenue through lease agreements such as one for recreational vehicle storage and by hosting events such as Cirque de Solei and, this summer, Vans’ Warped Tour.

Contact the writer: bmartinez@ocregister.com or 714-796-7955