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Anatomy of a development

Posted: April 8, 2012 1:55 a.m.
Updated: April 8, 2012 1:55 a.m.

 


It has been 17 years since the project was conceived. The documents concerning it total 109,444 pages. It has been reviewed by 25 government agencies, has had 21 public hearings and several lawsuits and been the topic of more than 700 meetings.

The Newhall Ranch project is a 20,885-home and commercial center development in the northwest Santa Clarita Valley, to be built in four distinct “villages” on 12,000 acres off Interstate 5 along Highway 126 near the Santa Clara River.

The most ambitious development project ever in North Los Angeles County will change and grow the Santa Clarita Valley in the next decade.

Environmentalists have filed lawsuits against it hoping at least to scale the project down, while others feel that Newhall Land, because of its successful track record developing the planned community of Valencia, will be responsible in its approach to development.

Without taking sides, this two-part article looks at Newhall Ranch as a 21st century suburban development and its creator, Newhall Land, as a complex long-term business enterprise. How does a company develop a project over decades to transform a vision into reality?

Odyssey

It’s been a 17-year odyssey by Newhall Land to develop the communities planned for Newhall Ranch in the Santa Clarita Valley, and the land originally owned and bequeathed by Henry Mayo to his five sons.

The sons formed Newhall Land and Farming in 1883. Today, the development company is known quite simply as Newhall Land.

Several factors reportedly turned the Newhall Land and Farming Co. into land developers decades ago: a lavish lifestyle led by the sons of Henry Newhall, the collapse of the St. Francis dam in 1928 and stock market crash of 1929 and
decades later, a Los Angeles County change in the rules for property taxes.

But in the midst of the Great Depression, Atholl McBean, a successful San Francisco businessman and husband of one of Newhall’s granddaughters, Margaret Newhall, stepped in to put the company back on solid financial footing.

Today, McBean Parkway is named for the man who saved the company from financial ruin and envisioned using a master plan concept to develop a city as urbanization began to encroach upon communities surrounding the land owned by the Newhall family.

The family-owned company’s first master-planned community set the stage for the building of Valencia.

Valencia

In the mid-1900s, California was building the I-5 freeway through the Newhall Pass. In response, the Newhall family hired Viennese urban architect Victor Gruen in the 1960s to design a master plan for the building of a community.

Former owner and publisher of The Signal, Scott Newhall, was tasked with giving the community its name: Valencia.

“The company spent millions of dollars to build Valencia Boulevard and McBean Parkway,” said Marlee Lauffer, senior vice president marketing and communications for Newhall Land. “If they didn’t build the roads, the state wouldn’t build off-ramps.”

The company also entered into a partnership with Magic Mountain, owned by Sea World at the time, to build Magic Mountain Parkway, another major city street.

“The cost of doing all that caused the company to go public; they needed to raise more capital,” Lauffer said. “The company went on the NYSE in 1970 and remained publicly traded until 2004 when LNR and Lennar bought us.”

In 1965 L.A. County approved the master plan, and two years later, residents moved into Old Orchard I, the development company’s first master-planned residential “village.”

Since then, Newhall Land has donated land for Henry Mayo Newhall Memorial Hospital, and the Disney-endowed
California Institute for the Arts and College of the Canyons opened with the developer’s assistance. And the SCV’s two industrial parks were built, along with the Valencia mall and Town Center Drive, golf courses, the Hyatt hotel and more.

With decades of experience under its belt as a master planner, Newhall Land began planning for its next land development – Newhall Ranch.

Newhall Ranch

Identified as appropriate for urban development under the L.A. County General Plan Update in 1990, Newhall Land first filed an application with the county to develop Newhall Ranch in 1994.

Two years later, a nearly two-decade long journey ensued before the company received the final green light in 2012 to begin developing the first mixed-use residential and commercial centers on the land that borders the 126 highway.

Overall, the project includes four distinct “villages” — Landmark, Mission and two Homestead villages.

Lauffer estimates about 80 percent of the 17-year process was spent on the entitlement process, which includes environmental reviews.

Of the 20,885 homes, 10 percent will be affordable for low-to-moderate income families. More than 8,000 acres are dedicated to open space. And a water-reclamation plant will also be built to serve more than 50 percent of the water needs, Lauffer said.

But filing multiple suits against the development, environmental groups say a project this large irreparably harms waterways, threatens rare species of animals and takes away the ability for future generations to have any input into planning their community.

“‘Environmentalist’ has gotten to be a bad word,” said Lynne Plambeck, president of Santa Clarita Organization for Planning the Environment. “Community activists are stewards of the community. We watch over projects to make sure they’re responsible environmentally, provide the infrastructure, and fit the community.”
Newhall Land counters, however, that building piecemeal without master planning would be irresponsible, and Lauffer cites the company’s track record in Valencia as proof.

Master planning

Included in the Newhall Ranch plan are commercial centers, estimated by Newhall Land to provide 60,000 permanent jobs, and designed to be within walking distance of nearly 60 percent of the homes.

Construction alone is estimated to add more than 135,000 direct jobs and more jobs indirectly. Newhall Land will also fund the building of a new high school for Newhall Ranch, Lauffer said.

But the path to seeing Newhall Ranch come to fruition over the many years has been delayed by the economic downturn, environmental lawsuits and changes in California regulations.

So why go through such an arduous process?

“We could have just said, ‘Let’s forget doing a master plan; let’s just take 500 acres here, sit down with the county, go through the review process, do an environmental impact review for 1,000 homes and two shopping centers,’ and we’d probably be well under way,” Lauffer said.

While developing smaller plots of land would have been more expedient, Newhall Land knew from what it had done in
Valencia, it was the right way to go in Newhall Ranch, she said.

If the land is developed in a piecemeal versus master-planning fashion, one can’t plan for the community in a comprehensive fashion, Lauffer said.

“Master planning has great benefits, but it just takes a very, very long time,” she said.

But taking a global approach to building an entire community meant overcoming many challenges along the way.
Landmark Village, one of the communities in the 1996 Newhall Ranch plan, was given the final signoff by the L.A. County Board of Supervisors in February 2012 to begin building.

“We knew it would take a long time,” Lauffer said days before the county gave final approval on the first phase of the project Feb. 20. “I don’t think we quite envisioned it would take this long, but the light at the end of the tunnel is shining very brightly.”

About a month later, however, five environmental groups filed a joint lawsuit March 22 against the county for approving the development.

The hope is still to derail the project, though Ileene Anderson of the Center for Biological Diversity said most likely that wouldn’t be the end result.

One of a developer’s many responsibilities is to build the infrastructure for new communities. Builders handle the actual construction of homes and commercial centers.

Streets, parks, community centers and schools have become part of the master plan, and most locally are built by Newhall Land. The Quimby Act, a landmark 1965 state law, paved the way to create neighborhood parks near housing communities by having developers donate land or pay for the recreational area.

“We always exceed that because Valencia’s known for plentiful parks,” Lauffer said.

The formula for building schools, however, is a bit more daunting. State law requires that developers put a set amount of money aside per every square foot of a home built to build schools.

The local community can raise money through bonds and the state kicks in money to build schools.

“What has happened in recent years is that there’s no local or state bond for school districts,” Lauffer said. “And if they have to wait to collect their money every time a home gets built, it may be years before the school gets built.”

Aware that schools are a large part of what attracts people to Santa Clarita, Newhall Land works with the school districts to plan how many schools would be needed in the master planning stages, Lauffer said.

The developer also made the local school districts an attractive offer.

“We said, ‘We’ll just build the schools and pay for it, and you put your application in for state funding. If there’s any money in the state bond system and you get funded some, return it to us; if you don’t, it’s our risk,’” Lauffer said.

West Creek Academy was the first school that the developer built itself.

“We know that the reason people buy here is the great schools, so we want the schools to be there. It’s a win-win,” she said. “We think it’s important to do.”

Despite the myriad requirements of developers, and Newhall Land’s approach to building schools, there are still those who oppose the large-scale project.

Challenges

Opponents will say there isn’t enough water, or the company is ruining a habitat, but Lauffer said that every agency that has any oversight or interest in the subject has reviewed and studied the Newhall Ranch project.

“It’s easy for people to make a quick and simple statement, but if they would come and look at the more than 100,000 pages of documents that we have, clearly our process is based in fact where the opposition is based on rhetoric,” she said.

Saying it’s frustrating, Lauffer said the company compiled all the lawsuits that had been filed against one of its communities and even against agencies tied to the project and found something close to 29 lawsuits.

The lawsuits have pretty much been filed by the same people, but the names change a little, she said. Yet over the past 20 years, Lauffer said, Newhall Land and agencies related to the developer’s projects have won every single case.

The environmental groups have prevailed on some issues requiring Newhall Land to revisit some issues, resulting in more documentation.

Next Sunday in Business: The environmentalists’ view of the project and how Newhall Land has managed to stay in business 17 years without being able to start construction on Newhall Ranch.

jadkins@the-signal.com
661-287-5599

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