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Newhall Land says commitments are solid

Posted: June 10, 2008 2:07 a.m.
Updated: August 11, 2008 5:01 a.m.
 

With Newhall Land and Farming Company's requirement to pay millions for some of the city's biggest infrastructure projects, Santa Clarita city officials are evaluating the company's funding obligations in light of news that Newhall Land's parent company, LandSource Communities Development LLC, has filed for bankruptcy.

Newhall Land spokeswoman Marlee Lauffer said Monday, however, that the company plans to hold true to its obligations to help fund projects, including the 8 1/2-mile-long cross-valley connector that will link the Highway 14 freeway with Highway 126, as well as Magic Mountain Parkway/Interstate 5 interchange improvement.

"On the commitments that we have that are currently ongoing, we're focused on continuing to move forward," Lauffer said. "There may be some timing issues. Many of these infrastructure improvements are tied to development as it occurs, and development is a little slower now than it was a few years ago because of the economy, so there's a number of different variables."

As the Santa Clarita Valley's premiere large-scale housing developer, Newhall Land contributes millions of dollars to local infrastructure improvements to help offset the effects of the added population. Newhall Land will likely be required to continue to help fund both the Magic Mountain Parkway/Interstate 5 project and the cross-valley connector roadway.

Santa Clarita city spokeswoman Gail Ortiz said the city is looking at the effects of the company's restructuring to see if it needs to make adjustments.

"We are looking at what they're on the hook for, what they still owe on some of these (projects) and what is going to happen to all this now that LandSource has filed Chapter 11," Ortiz said. "The city is not stopping any of these projects. Today they are moving forward and tomorrow they'll be moving forward."

The only portion of the cross-valley connector that still needs funding is the 1,100-foot-long bridge over the Santa Clara River. Newhall Land will likely only be required to pay a small percentage of the remaining funding needed, Ortiz said. If Newhall Land's funding does not come through, "It would not hold up the project," she said.

Newhall Land has already contributed $25 million to building the cross-valley connector, which will run through its River Village community. Specifics about how much the company will be required to pay for the cross-valley connector and Magic Mountain Parkway projects were not available Monday.

In determining the developer impact fees for large-scale builders in Santa Clarita, consultants look at what needs improvement in the area surrounding the housing development. The city uses a formula that divides the number of units by the cost of improvement and develop a per-unit cost. Sometimes the money is paid up front; other times it is paid later as the phases are built, as Newhall Land has done with the cross-valley connector.

"In recent years, we've done over $300 million of major road improvements (in the Santa Clarita Valley) as part of our development," Lauffer said. "We've built a lot of roads, parks and a variety of different infrastructure."

Gail Ortiz said that when it comes to paying the required fees, Newhall Land has never let the city down.

"We've had great success with Newhall Land," Ortiz said. "We have no reason to believe that the funding that they have promised and allocated in terms of the projects won't happen. We believe it will happen. We'll be watching though, because it's not just Newhall Land; it's also their parent company and partners."

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