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City moves forward with one partner in Whittaker-Bermite deal

Development: Santa Clarita officials, Lewis Operating Corp. pledge to buy the property

Posted: February 15, 2011 1:55 a.m.
Updated: February 15, 2011 1:55 a.m.

City leaders are moving forward with plans to acquire the contaminated, 1,000-acre Whittaker-Bermite property despite Shapell Industries Inc.’s recent decision to bow out of a potential partnership with them.

Shapell and Upland-based developer Lewis Operating Corp. were testing the waters with the city of Santa Clarita to buy the main title on the property together.

The city considers the large property — located in the center of the city, expanding south and east of the Saugus Speedway — to be a major part of the city’s future development.

So when the city secured the option in December to buy the property within a year, Santa Clarita officials acted fast, coming forward in January with building companies Lewis and Shapell as potential partners.

Shapell’s announcement Friday to halt the prospective business collaboration adds to uncertainty about how the city will raise the millions of dollars needed to buy the 996-acre property.

But both city officials and Lewis executives say they will forge ahead together.

“It’s a complicated piece of property, but we’re planning to roll up our sleeves and keep working with the city and the community to come up with the solutions,” said Randall Lewis, executive vice president for Lewis Operating Corp.

With Lewis’ help, the city hopes to pay off the remainder of a $13 million bank note owned by Whittaker-Bermite’s current owners, Remediation Financial Inc., or RFI, allowing the city to all but own the property.

The city secured a yearlong option to come up with those funds by mid-December as part of a settlement agreement with RFI in U.S. Federal Bankruptcy Court. The settlement agreement stemmed from an eminent-domain lawsuit RFI filed against the city over a piece of land the city acquired to build part of Golden Valley Road.

Lewis said it was too early to tell whether the company could shoulder the millions of dollars that Shapell may have contributed to the development deal.

For now, the city has no plans to seek out a second development partner, city spokeswoman Gail Ortiz said.

If Lewis opts out of the business collaboration by November, the city could lose its bid on a controlling interest in the Whittaker-Bermite property, she said.

The city has long been involved with the Whittaker-Bermite property as the former munitions plant undergoes a large-scale environmental cleanup of its contaminated soil and groundwater, and emerges from bankruptcy.

Purchasing the piece of land that stretches between Soledad Canyon Road and Golden Valley Road would allow the city to guide the property’s development, extending major thoroughfares across the 996 acres and generating jobs through new businesses there.

City and community stakeholders’ recent emphasis on bringing more jobs than homes to the site may have been part of Shapell’s decision to pull out of development talks on the complex project, according to Ortiz.

A Shapell spokesman declined to comment on the issue on Monday.


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