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Monday, Jun 5, 2023

Newhall Land Bankruptcy Impact Still Unknown

There’s a dark cloud hanging over the Santa Clarita Valley, and its name is Landsource. That’s the name of the company that owns the Newhall Land and Farming Company, the Tournament Player’s Club and sundry other real estate projects around the country. Landsource entered bankruptcy proceedings in June and the process of reorganization has been plodding along since then. Most recently, the lender providing debtor-in-possession financing for Landsource backed off from a hotly-contested proposal to quickly liquidate the entity’s many assets. “The concern with Barclay’s plan was that the assets of Landsource are of several different types,” said Debra A. Dandeneau, counsel for the Landsource debtors. “For example, Newhall Land is a functioning, ongoing business that has entitlements for master-planned communities, and so the value really does not lie in selling it off in pieces.” When asked whether any offers have been made for any of those parts and pieces, Dandeneau declined to answer specifically, saying simply that any prospective purchase proposals would be evaluated in due course. The bankruptcy has caused many tense moments in the region. A list of debtors and creditors for the Landsource filings runs to 40 single-space pages. A couple of months ago, the local newspaper, The Signal, reported on concerns that members of the Tournament Player’s Club might be in danger of losing the fees they’ve already paid. That issue has apparently been resolved satisfactorily, at least for the time being. Orange County, on the other hand, has benefited somewhat from Santa Clarita Valley’s woes, with HoganWebb, the partnership selected to oversee the restructuring process, receiving $170,000 per month in fees for their participation. Phone calls to Tim Hogan and Larry Webb were not returned. “We obviously are concerned and very anxious to find out what’s going to happen,” said Jason Crawford, economic development and marketing manager for the City of Santa Clarita, “but honestly, the majority of the projects here that Newhall Land and Farming has been working on with us are continuing to move forward.” That includes a cross-valley connector road as well as the revamping of the Magic Mountain freeway ramps off the Interstate 5 freeway. “That project, which has been going for several years is on schedule to be finished in 2009,” said Crawford. From June 9 to Sept. 30, Newhall Land and Farming alone has spent more than $22 million, according to court filings. “Business continues as usual here,” said spokeperson Marlee Lauffer. When asked exactly what that business is these days, she ran down a list of projects that are continuing to move forward in some fashion. “We’re long-term community planners, master plan developers. We have some work we are continuing to do on our Valencia community; we are three-quarters of the way through developing the 15,000-acre master plan. We are working with the school district on an elementary school being constructed here. There are road improvements we’re finishing, and we’re continuing to do a lot of work on our future Newhall Ranch community.” With respect to Valencia, Lauffer said there are still some residential “villages” where they are finishing up infrastructure and community improvements, and on the commercial/industrial side they have land they are still completing entitlements on and tract work. On the Newhall Ranch project, work includes processing tentative tract maps and moving forward on getting a host of permits for the development which gained Los Angeles County’s approval to build 20,000 homes over more than 20 years. The impact of the Landsource bankruptcy and the severe slowdown in real estate development has hit, “all the ancillary companies that have come to depend on the kind of real estate growth we’ve seen over the last 20 years,” said Larry Mankin, president and CEO of the Santa Clarita Valley Chamber of Commerce. The region, said Mankin, has been growing at about 3 percent, or adding 8,000 new residents per year, over the last decade. Growth hasn’t ceased completely, he said, but it has definitely slowed. The service and financial industries have felt the pinch most dramatically, said Mankin, while manufacturing on the whole seems to be holding its own.

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