A Primer on the Forthcoming Newhall Ranch Megadevelopment

he Santa Clarita Valley Signal recently ran a two-part extravaganza on the sprawly Newhall Ranch megadevelopment recently approved for land near Santa Clarita (“Anatomy of a Development” Part I and Part II)–the articles “[look] at Newhall Ranch as a 21st century suburban development and its creator, Newhall Land, as a complex long-term business enterprise.” The massive Newhall Ranch development has been working its way through the entitlement process since 1994, but like most development plans in Southern California it has a much longer history than that, dating back to the original landowners who formed Newhall Land and Farming in 1883. The project has had serious momentum of late: the Landmark Village component of the project won final approval from Los Angeles County in February before prompting a lawsuit in March (Friends of the Santa Clara River, the Santa Clarita Organization for Planning the Environment, the Center for Biological Diversity, the Sierra Club, and the Wishtoyo Foundation’s Ventura Coastkeeper filed the suit). All told, the Newhall Ranch development would build 20,885 homes in four distinct “villages” on 12,000 acres located alongside the 5, Highway 126, and the Santa Clarita River. Considering the massive scale of the project, there are a lot of numbers to crunch. Here are some of the highlights from the data-rich pair of SCVS articles:

History
— Project documents total 109,444 pages. The project “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 land was “originally owned and bequeathed by Henry Mayo to his five sons. The sons formed Newhall Land and Farming in 1883.”

— McBean Parkway is named for a man who married into the family and “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 area was first identified for urban development under the 1990 LA County General Plan Update. Newhall Land first filed an application with the county to develop Newhall Ranch in 1994.

— The new economy, just like 15% of the old economy: “Newhall Land was acquired in 2004 by homebuilder Lennar, which subsequently filed Chapter 11 in 2008. When Lennar emerged from bankruptcy in 2009, Newhall Land became a privately owned company once again, although Lennar retained a 15-percent stake in the company.”

Project Details
— On liberal guilt: “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.”

— On the local economy: Newhall Ranch estimates that its commercial centers will “provide 60,000 permanent jobs, and designed to be within walking distance of nearly 60 percent of the homes.” What’s more: “Construction alone is estimated to add more than 135,000 direct jobs and more jobs indirectly.”

— Newhall Land spokesperson Marlee Lauffer tells the SCVS that “depending on market conditions it may be about 15 years or more before the development is finished.”

— Landmark Village will be built on 295 acres, including 270 single family house lots, condominiums, apartments, 16 commercial lots, a park, a school, a fire station, and 119 lots for open space.

— Newhall Land also owns “16,000 acres in Ventura County” that is “not supportive of growth.”

Click HERE for the article.

Anatomy of a Development, Part II

While there are varied opinions of most new developments, the Newhall Ranch project has attracted more solicited and unsolicited input than most projects because of its size.

The 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.

Randy Wrage, a Santa Clarita resident and spokesperson for Spirit Properties, said everything north of Lyons Avenue at Old Orchard was mostly carrots and onions at one time. The area was also home to several large pig farming operations and several dairy farms before Newhall Land embarked upon its master plan for the community of Valencia, he said.

“As a result of the stewardship of Newhall Land, this place is a heck of a lot nicer than it was 50 years ago,” Wrage said.
But as the master plan for Newhall Ranch has unfolded over the years, others say the project is too large and harmful to natural resources. On March 22, five organizations filed suit against Los Angeles County, after the project received its final approval.
The environmental groups claim the decision to allow the development will destroy one of the last remaining wetlands in Southern California, the Santa Clara River, and pose a threat to indigenous plants and rare species of animals and plants indigenous to the area.

The legal action, filed by Friends of the Santa Clara River, the Santa Clarita Organization for Planning the Environment, the Center for Biological Diversity, the Sierra Club and the Wishtoyo Foundation’s Ventura Coastkeeper program, asked the court to review the legality of the county’s approval process.

There are instances in which the environmental groups, whether it’s SCOPE, Friends of the River or Center for Biological Diversity have prevailed temporarily on issues requiring Newhall Land to put more documentation together or do another biological study, said Marlee Lauffer, senior vice president marketing and communications for Newhall Land.

Some projects can be awful and should never be built, said Lynne Plambeck, president of SCOPE. Community activists help a project become a better project because of the discussion, she said, and it’s a benefit to the community.

The developer, however, refers to those instances as a “fix-it ticket” which delayed the project some while adjustments were made, Lauffer said, but in the end never substantively changed anything in the master plan.

“Newhall Land has spent millions of dollars on reports, studies, surveys and assessments — far more than the environment will ever receive back,” Wrage said.

Saying the environmental community has become a cottage industry, Wrage believes if a portion of the money spent fighting over environmental issues were actually instead put to use protecting local habitat, the money would be better spent.

People think of environmentalists as only standing up for habitat and endangered species, Plambeck said. It involves more than that, she said, explaining that environmentalists speak to clean air and water where kids are playing outdoors. These are concerns of every “soccer mom” who don’t want their kids to suffer from asthma, Plambeck said.

An outdoorsman himself, Wrage said he likes to bicycle, hike and ski and appreciates the protection of land and habitat but that like with all things, sometimes people take issues to an extreme.

There are developers who haven’t seen a square foot of land that shouldn’t be developed, and likewise, there are environmentalists who are only interested in dragging out the development process, he said.

“I did a project in 1999 channeling a portion of Newhall Creek as part of the McGrath Elementary School,” Wrage said.

The process of channelizing the river involved shoring up a naturally eroding river bank by extending concrete lined banks from an upstream lined channel, but even that project took months of studies and hundreds of thousands of dollars in mitigation, he said.
“You would have thought it was a stream and uninhabited area instead of an urban wash full of empty beer cans, trash and people living in it,” he said.

Valencia example
Plambeck insists, however, that all development is not bad. Believing the community would be better served by smaller developers, Plambeck cited Valencia as an example of master planning that made sense.

“Master planning makes sense. Valencia made sense,” she said. “Newhall Land did some really wonderful things for the community.”

The way Valencia was developed when Newhall Land was a community developer was OK, Plambeck said, claiming Newhall Land really cared about the community.

But when a company begins planning projects to make the bottom-line right for investors, it’s no longer motivated solely to do the right thing for the community, she said.

The problem with developments like Newhall Ranch, she said, is that they are so large and involve so much land use that it takes away the planning process from future generations which might like to have some input about their community.

Developing smaller plots of land would have been more expedient for the company, Lauffer said, but if the land is built in a piecemeal vs. master planning fashion, one can’t plan for the community in a comprehensive fashion.

“When you approve huge tracts, people tend not to revitalize their neighborhoods,” Plambeck said. “If you just build a bunch of new housing, you get the ‘throw-away house’ idea. I won’t repair my house, ‘I’ll just sell my house and buy in a new community.’”
In the end, however, regardless of whether residents are pro or anti-development, the lengthy delays of projects eventually add to the cost of each home for home buyers, Wrage said.

The cost to build a home has grown over the years and with each project delay the impact fees a builder pays for permits, water, schools and more grow as well. Locally, the impact fees, on average, add $88,000 to the cost of every home built, said Wrage.

Over the course of nearly two decades market conditions change, the business of developing and building continues to be hit with more regulations and the money spent on so many environmental reviews all add up, he said.

Economy
The other issue is that despite the protracted recession, the population in California continues to grow according to census records.

Local economists have pointed to a pent up demand where multiple generations of families have been living together under one roof, and as the economy improves, jobs return and consumer confidence rises the experts predict there will be a housing shortage.
While it’s anyone’s guess how long building Newhall Ranch will take to complete, Lauffer said depending on market conditions it may be about 15 years or more before the development is finished.

If the economists are correct, however, builders at the Newhall Ranch development may find it difficult to keep up with the demand in the not too distant future.

“Home sales in West Creek and West Ridge are higher than they have been for a long time,” Lauffer said.

In the meantime, how does a developer stay in business for nearly two decades without anyone building a single structure?

Long-term planning
A lot has happened in the 17 years since Newhall Land first envisioned the Newhall Ranch development.

During the planning years, Newhall Land was acquired in 2004 by homebuilder Lennar, which subsequently filed Chapter 11 in 2008. When Lennar emerged from bankruptcy in 2009, Newhall Land became a privately owned company once again, although Lennar retained a 15-percent stake in the company.

Although two members of the Newhall family remained on the board of directors until the company was acquired in 2004, no one from the family remains involved with Newhall Land.

“You just have to be conservative and focused,” Lauffer said. “We know that Newhall Ranch is going to go forward. We have investors that understand the challenge of doing a master plan so they’re sticking with us as we go through it.”

The company, which employs only 30 to 35 people, has used a variety of consultants to fill vital roles while it waited in limbo for final approval to begin developing.

“We’re very low right now, we’re very lean,” Lauffer said. “It’s been a tough economy. Once we get into active selling of the lots we’ll certainly see our company grow in size again.”

But working on the Newhall Ranch development for close to two decades, which the developer estimates has cost millions and millions and millions of dollars, Newhall Land has had to rely on other sources of income to remain in business.
Remaining operational

For the company that once developed and or built Valencia, there came a time when it needed to sell some of its property to remain operational while it worked for 17 years to secure approval for Newhall Ranch.

Whereas at one time Newhall Land maintained a portfolio of income property when it was publically traded, it later went on to sell the Valencia mall to Westfield, the Hyatt hotel, many of the apartment complexes in Valencia and more, Lauffer said.

“We have our oil and gas operations that bring in some income, our agriculture, cattle grazing, and the filming brings us some income,” Lauffer said. “We have a little land sales here and there. And we’ve sold home sites to KB Home in the last year.”

Despite the long-term planning costs and delays, the company has proceeded with work on the entitlement process throughout that period so that when the economy picks up Newhall Ranch is not delayed and can move forward right along with an improving market, she said.

“We’re a long-term planner. We’ve always been,” Lauffer said. “Valencia has been through four recessions so we know that you’ve got to be able to ‘batten down the hatches’ and keep focused.”

But despite the large Newhall Ranch project, the company still owns land beyond it.

Future
“We still have 16,000 acres in Ventura County at this point, but their policies are not supportive of growth,” Lauffer said. “Who knows if that may ever change, but we’re not pushing it.”

Taking one day at a time, Newhall Land’s immediate focus will be on developing the 295-acre Landmark Village community of 270 single-family home lots, condominium complexes, apartment buildings, 16 commercial lots, a park, school, fire station and 119 lots for open space in the Newhall Ranch project.

So what does the company that once began with the five sons of the original land owner see itself doing in the future?

“We like to brand ourselves as premier community planners and we’ve been involved in assisting other master planners,” Lauffer said. “So I think there’s another role the company could take and it might not involve land Newhall Land owns.”
jadkins@the-signal.com

Click HERE for the article.

Anatomy of a Development

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.

Click HERE for the article.

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