Tustin plans to ask outside groups for proposals on the South Hangar this winter. It will be the first formal call since the North Hangar burned in November 2023. The reason is in the city's own figures. Every possible future for the building costs money, and that includes leaving it alone. The city's staff report puts the yearly cost of the status quo at more than $1 million and expects that number to keep rising.
The City Council voted 4–0 on July 21, 2026 to authorize the offering. The vote did not pick a use or a developer. The city hasn't decided what the hangar becomes. It has decided to find out whether anyone else will share the cost of keeping it.
Why Leaving It Alone Costs Money
The South Hangar was built in 1942 for the Navy's lighter-than-air program, which flew blimps on World War II patrols. It is about 180 feet tall, 300 feet wide and 1,000 feet long. According to the Orange County Register, the structure is mostly wood. For more than 20 years it stood next to a twin that was largely vacant and decaying.
The North Hangar fire changed what it means to own the one that's left. After the fire, the city added 24-hour security staff, perimeter fencing, lighting, surveillance cameras and better emergency access around the South Hangar. Those measures make the site safer. They also account for most of the yearly cost. Councilmember Ryan Gallagher put the status quo at roughly $1 million a year in security costs alone, the Register reported.
The fire also showed what doing nothing can cost. Tustin's community cleanup took about 18 months and cost roughly $105.8 million. The city paid up front as a federal response-action contractor for the Navy, and the Navy is reimbursing it. Crews swept neighborhoods three times at ground level, then cleaned more than 400 roofs, gutters and porches. The Register's report on the end of the emergency says more than 4,800 asbestos air samples taken between November 2023 and June 2025 turned up four confirmed detections, all below the EPA's school-safety threshold. The council ended the local emergency on June 16, 2026, after the state Department of Toxic Substances Control announced that remediation was complete.
Today the South Hangar gets only limited use, for airship storage and maintenance. The staff report says structural and life-safety problems, including the risk of debris falling from the ceiling, keep it from doing more. The airship tie still means something. The Los Angeles Times reported in December 2025 that Goodyear's Carson-based Wingfoot Three "every so often" goes to "a hangar in Tustin" for maintenance and inspection.
The City's Cost Estimates
The figures come from an earlier evaluation by Page & Turnbull, a historic architecture and preservation consultant. The city summarized them in its July staff report.
| Option | Estimated cost | What it covers |
|---|---|---|
| Keep things as they are | More than $1 million per year | Security and operations, expected to rise |
| Baseline stabilization | About $22.6 million | Structural work to keep airship maintenance going |
| Rehabilitation | About $203 million | Full rehabilitation of the structure |
| Broader adaptive reuse | About $271 million | Rehab plus conversion to new uses |
The low end is still an eight-figure project, and only the top two options open the building to anything new. At $22.6 million, the city would get a safer hangar that still does what it does now. Councilmember Lee Fink said at the July meeting that both keeping the structure and tearing it down carry costs, and that outside help, private or federal, will likely be needed, according to the Register. Gallagher listed the choices on the table so far as city-funded rehabilitation, demolition, or keeping the current arrangement.
The offering is how the city adds a fourth choice, where someone else pays part of the bill. The staff report says plainly that one goal is finding ways "to reduce long-term public maintenance and operational costs."
What the City Can Actually Offer
The hangar is on Tustin's logo, but the city doesn't own it. The Navy does. Under a long-term lease, Tustin leases and manages the structure and part of the land around it while environmental remediation is finished. The leased site covers about 32 acres. It is listed as Assessor's Parcel Number 430-371-32 and is bounded by Moffett Drive on the north, Warner Avenue on the south, Armstrong Avenue on the east and Tustin Ranch Road on the west.
That ownership setup decides what's for sale. The staff report describes a potential sublease, not a deed. Because Tustin is a tenant and not the fee owner, the state's Surplus Land Act doesn't apply to this deal. The staff report notes the law would apply if the city later owned the land outright and then sold or leased it. Anyone who bids is betting on a building owned by the federal government and leased by a city. That is an unusual setup to raise $200 million against.
The zoning is broader than many people would guess. The site is in Neighborhood D of the Tustin Legacy Specific Plan and is designated Mixed-Use Urban. Allowed uses already include commercial retail, commercial entertainment, residential, hotel and public recreation, among others. A proposal for a use the plan doesn't currently permit would need new council approvals, possibly including a Specific Plan amendment. Proposals can cover just the hangar or take in more of the land around it.
Ideas Floated, and What Came of Them in 2015
Fink called the hangar a "unicorn." He said the competitive offering is a first step to "see what's out there," and mentioned road racing, a history museum and film production as possibilities, the Register reported. He also said the offering should leave room for "both short- or medium-term uses as well as long-term uses."
Tustin has tested interest before. Councilmember John Nielsen pointed out that when the city gauged interest in 2015, it heard from major names including the NFL and motocross, but nothing came of it. He added that the hangar "is part of our city identity" and said it shows up in Tustin's logo.
Big-name interest wasn't enough in 2015, and the building hasn't gotten any cheaper since. The new offering comes with more information up front. The city plans to give bidders details on the hangar's historic significance, long-term operating costs, structural and utility limits, and ownership terms. The hangar has also been fully documented digitally. Bidders will get 3D models and virtual access through a secure document center. The staff report also directs the city to prepare contingency options in case no workable reuse proposal comes in.
The Schedule From Here
The July staff report lays out these milestones:
- September 2026, completed. The schedule called for the council to select a real estate brokerage to market the offering. Citizen Portal reported that the council approved hiring CBRE and pointed to the firm's experience with hangar conversions and adaptive reuse.
- November to December 2026. The city finalizes and releases the offering. The business items on the October 6 council agenda didn't include a release.
- First quarter of 2027. The city reviews the proposals it receives.
- Second quarter of 2027. Staff bring recommendations on next steps to the council.
The earliest point when residents will know what the hangar might become is the middle of next year. Even then, the council will be weighing recommendations, not signing a final agreement.
Next Door, the Burned Hangar's Land Has Its Own Open Question
Just north is Parcel 18, an 85-acre piece of Navy-owned land. The North Hangar's four concrete corner pillars and damaged slab foundation are still there, the Register reported in August. The cleanup report says the remaining hangar ribs and towers were left in place until a decision is made about the property.
For more than two decades, Parcel 18 was planned as a county regional park. The county never secured the funding. In 2021 the city, acting as the Local Reuse Authority, took the regional park out of the federal reuse plan. City staff are now looking at a mix of development and public uses there. Possible park features include open space, active recreation areas, sports fields, trails, playgrounds and even aquatic features.
The two parcels came up together at the city's annual Local Reuse Authority meeting on August 18, held in the AMC theater at The District at Tustin Legacy. Residents raised concerns about preserving the base's military history, traffic, parking, and whether the South Hangar has enough fire protection to prevent another disaster, according to the Register.
Other projects on former base land are already scheduled. Irvine Company says construction started early in 2026 on a 19-acre Tustin Legacy community. It will include a publicly accessible 0.66-acre park at Swaim Way and Compass Avenue, plus paseos and a cafe, with the first two buildings, the park and the cafe expected in summer 2028. No comparable date exists yet for the hangar. The next one is the offering release, planned for sometime between now and the end of December.
If you live near Tustin Legacy and want to know how the hangar decisions and the work around the old base could affect your street, Monarch Home Group follows these council milestones closely and can walk you through what's happening nearby. Ask for your free market valuation and we'll put those details into context for your home.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
