While its parent company deals with bankruptcy proceedings, Newhall Land and Farming Co. is moving ahead with its Valencia-sized development west of Santa Clarita.
On Monday the company will release the draft environmental impact statement and environmental impact report for the Newhall Ranch project.
Company officials expect construction to begin on the 21,000-home, 12,000-acre community with the next three or four years.
Newhall Ranch will be Newhall Land’s last major project. It also will be one of the last major community developments in the general Los Angeles region, company spokeswoman Marlee Lauffer said Friday.
“This is kind of a major milestone for us,” she said. “This is a holistic view of (Newhall Ranch), so we’re not looking at the environmental resources from a piecemeal standpoint.”
The public review period for the document starts Monday and ends June 26. A public hearing is set for June 11 at 6:30 p.m. at Rancho Pico Middle School.
The report is a daunting document, topping out at nearly 16,000 pages – two-thirds of which is appendices – and filling 16 fat three-ring binders.
The Newhall Ranch Specific Plan was approved in 2003 by the Los Angeles County Regional Planning Commission, and the EIR was compiled over the last five years at a cost of “millions,” Lauffer said.
The U.S. Army Corps of Engineers and the state Department of Fish and Game are the lead agencies overseeing the EIR. Lauffer said Newhall Land expects the Army Corps to make its final decision on the report in early 2010.
If the EIR is approved, Newhall Land can begin obtaining the necessary permits required for Newhall Ranch.
The tentative tract map has already received regional planning and still needs to be approved by the county Board of Supervisors, Lauffer said.
There are several conservation goals in the EIR, said Mark Subbotin, Newhall Land’s vice president of community development.
As part of Newhall Ranch’s development, 5,700 acres of high country will be set aside as open space. In addition, 970 acres of the Santa Clara River will be protected, and five areas are set aside for protection of the spineflower.
The high country will be managed by a Newhall Ranch resident-funded joint-powers authority, which Subbotin said would be composed of Los Angeles County, the city of Santa Clarita and the Santa Monica Mountains Conservancy.
Over the last year, LandSource Communities Development, LLC – Newhall Land’s owner – has been in the throes of reorganization after filing for Chapter 11 bankruptcy protection.
Lauffer said the debtor-in-possession financing Newhall Land received during the reorganization has allowed the EIR work to continue.
Click HERE to view the article.
LandSource Communities Development, LLC, filed for Chapter 11 protection on June 8, 2008, and must start repaying its debt after May 31.
“Obviously, our budgets are greatly restricted because of both (the bankruptcy and the economy),” Newhall Land spokeswoman Marlee Lauffer said Friday. “There’s very little construction activity. (But) there’s not a lot of new construction going on anywhere in Southern California.”
Lauffer said the company expects to emerge from the bankruptcy filing intact, without having to sell any major assets.
Those assets include the Valencia Water Co. and the Tournament Players Club, both owned by Newhall Land.
The way forward for the company, she said, will also include developing Newhall Ranch, a 21,000-home, Valencia-sized community planned southwest of the Interstate 5/Highway 126 junction.
LandSource’s bankruptcy travails have also put a damper on the charitable side of Newhall Land, Lauffer said.
“We’re unable to participate in charitable activities, (but) local nonprofits are very understanding,” she said. “As we become reorganized, we’ll be back as a valuable member of the nonprofit contribution scene.”
“It’s a big wait-and-see,” Santa Clarita spokeswoman Gail Ortiz said of the LandSource reorganization. Given the state of the national economy, “if this was a standalone issue, it would be a much bigger deal.”
City officials are paying attention to the reorganization, she said, “mostly because we want to see what’s going to happen with (Newhall Land).”
The developer has partnered with the city through the years. A recent example of that partnership involves the construction of new on/off-ramps at the Interstate 5/Magic Mountain Parkway interchange. Newhall Land provided funding for the work.
LandSource filed for chapter 11 protection on June 8, 2008. At the time, the company received debtor-in-possession financing of $1.185 billion from a group of lenders led by Barclay’s Bank.
The financing included a $135 million line of credit, allowing LandSource to carry on with business during the reorganization.
Understanding the present nature of the LandSource debacle means backtracking.
In 2004, Miami-based home builder Lennar Corp. and partner LNR shelled out about $1 billion to buy Newhall Land, the Santa Clarita-based mastermind of Valencia.
Flash forward to March 2007, when Barclay’s invested $1.55 billion to finance LandSource – a joint venture between Lennar, LNR Property Corp. and MW Housing Partners.
The mission of LandSource – which took ownership of Newhall Land – was to create ready-to-build home sites and commercial properties in California, Arizona, Florida, New Jersey, Nevada and Texas.
In 2007 more than 60 percent of LandSource was sold to the California Public Employees Retirement System, or CalPERS.
By 2008 the company had run into trouble restructuring its debt and defaulted on loan payments. On June 8 of last year, LandSource filed for bankruptcy protection in U.S. Bankruptcy Court in Delaware.
The debtor-in-possession financing expires May 31, and the next scheduled reorganization plan hearing is set for May 1 in a Delaware courtroom.
After multiple changing of hands, Newhall Land has become little more than a brand name, despite its more than 140-year home in the Santa Clarita Valley community, according to a local attorney.
“The Newhall Land and Farming name has a lot of cache,” said Lou Esbin, a certified bankruptcy expert. “It’s not the Newhall Land that existed prior to the sale to Lennar. The people may be the same, but the company is not.”
Esbin, who represents three businesses that contracted with Newhall Land, is keeping a close watch on the reorganization plan for LandSource.
He explained that Lennar plans to provide roughly $140 million – about 10 percent of the outstanding debt – in exchange for 15 percent of the new entity that comes out of the reorganization.
The trade publication Big Builder News reported last week that the money Lennar is offering comes with conditions relieving the company of previous obligations including bonds and development costs – obligations estimated to be worth about $55 million.
How the LandSource matter ultimately will affect Newhall Land’s operations remains to be seen.
Local vendors who provided goods and services may not be paid back the amounts they are owed, Esbin said.
When it comes to Newhall Ranch, he said: “The land is there, and (the economy is) always going to go through cycles.
“At some point, Newhall Ranch will be built. At what price point, I can’t begin to say.”
Click HERE to view the article.