Early in 2007, the California Public Employees Retirement fund invested some $1 billion in the proposed 21,000-unit Newhall Ranch project. The real estate market was beginning to unravel and this project would require massive infusions of cash to cover its many infrastructure needs.
Now, little more than a year later, LandSource, the parent company of the Newhall Ranch project, is unable
to make the loan payments.
Environmental groups, including the Friends of the Santa Clara River, have opposed the Newhall Ranch
project for many years over concerns about its impacts on the Santa Clara River, Los Angeles County’s last wild river. Issues such as massive traffic congestion on Interstate 5, air pollution, insufficient water
supply and building in a wildfire zone were also areas of major concern.
The Friends of the Santa Clara River join other environmental organizations and planning agencies in
the belief that we must change our land-use patterns in order to deal effectively with the many problems
that will face us in the future, including traffic and climate change. This urban sprawl project is an example of the old way of land development, so we were sorry to see CalPers, an entity that has promoted green building in the past, become involved in Newhall Ranch.
Additionally, we were just plain concerned that this project would not end up being a good investment for
our many fine public employees who depend on CalPers for their retirement. So we participated in a
letter-writing campaign to the president of the CalPers Board, Robert Feckner, to object to this investment.
His reply, received by many in the community, included the statement:
“In this case, we are confident that MW Housing Partners has conducted thorough due diligence and
concluded that the Newhall Ranch development meets CalPers’ high environmental standards. The Newhall Ranch development strikes a true balance between community and the environment.”
The MW Housing Partners mentioned in Mr. Feckner’s reply is comprised of MacFarlane Partners, a San
Francisco firm, and Weyerhouser Realty, a subsidiary of Weyerhouser Corporation, the big northwest timber company, which is not particularly known for its environmental stewardship.
We continue to wonder about the “due diligence” that would have encouraged investment in an auto-dependent project during a time of rising gasoline prices, increasing traffic congestion and a failing housing market. The recent news of LandSource’s failure to make loan payments justifies our concern.
As the first phase of the Newhall Ranch project, the 1,400-unit Landmark Village along Highway 126,
continues to wind its way through the county approval process, we believe that the county must consider who will pay for the required infrastructure for this project. Ranging from numerous freeway off-ramps and
bridges over the Santa Clara River to a new state-of-the-art sanitation treatment plant that must
meet requirements for reduced salt discharges to the Santa Clara River, these construction projects will
cost millions in up-front dollars before eventually being taken over by the taxpayers.
The county of Los Angeles Development Monitoring System requires that needed infrastructure be available in order to approve new projects. If the infrastructure is not available, the project must be delayed, downsized or denied until it is available.
The Development Monitoring System requires an analysis of the adequacy of classroom space, roads, water supply, fire service and library facilities.
In the current housing market and with LandSource already behind in its loan payments, it seems apparent that many of these requirements will be difficult to meet.
In a 2003 decision, Judge Roger Randall ruled that the Development Monitoring System was not required at the Specific Plan level, but must be followed during the tract map approval process. The Newhall Ranch project is now at the tract map stage, but it appears that funding will not be available to comply with the
According to news releases, the CalPers loan was a non-recourse arrangement. That means that CalPers could well end up owning the land. Would CalPers consider selling at least the floodplain areas to a public entity? Such an arrangement would benefit the public by reducing floods, increasing ground water recharge, providing recreational and open space and maintaining critical habitat areas for wildlife.
The Los Angeles County Department of Public Works already has a proposal to acquire floodplain areas in the Upper Santa Clara River Integrated Regional Water Management Plan. Could any of those areas be re-distributed to include parts of the Newhall Ranch Project? If so, perhaps this debacle may have a silver lining for the public.
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