87.5 F
San Fernando
Friday, Aug 12, 2022
-Advertisement-

Tejon

Tejon/23″/mike1st/mark2nd By CHRISTOPHER WOODARD Staff Reporter It may look like a whole lot of rolling hills and not much else, but the 270,000 acres of cattle land at the top of the Grapevine will be L.A.’s next frontier, if Tejon Ranch Co.’s vision comes to pass. The 156-year-old company recently announced plans to develop a 4,000-acre master-planned community near Gorman, betting that demand for housing will push past Valencia to the top of the Grapevine along Interstate 5. The question is who would want to live there. After all, the proposed community would be 30 miles north of Santa Clarita, which for years was considered L.A. County’s outer limits. The Tejon Ranch area also is subject to nasty winter storms that sometimes cause the Grapevine to be shut down to commuters. “Where are you going to go to work Gorman, Bakersfield?” asked Mike Lebecki, a broker with RE/MAX of Santa Clarita. “I just don’t see people wanting to commute from there to Santa Clarita or the (San Fernando) Valley. And it’s not like the area is short on new housing. In addition to the existing supply, much of which has been built in recent years, Newhall Land & Farming Co. plans to build a 12,000-acre master-planned community northwest of Valencia over the next 25 years. The Tejon Ranch plan “just doesn’t make sense,” said Lebecki, who has sold homes on behalf of Newhall Land builders. To that, Tejon Ranch president and chief executive Robert A. Stine says hogwash. Naysayers said the same thing about Valencia for years, and now that community is booming, he points out. “Twenty-five or 30 years ago Newhall looked like quite a ways outside L.A., said Stine. “We’re probably 25 years behind Newhall (Land & Farming Co.), but we’re the next generation.” Jack Kyser, chief economist at the L.A. County Economic Development Corp., said Stine might be right. The population of greater Los Angeles is projected to grow by 2.6 million by 2010. Orange County, meanwhile, is expected to run out of developable land within the next 10 years. And while San Bernardino and Riverside counties still have plenty of property to develop, L.A. County will continue to experience growth pressure to the north. “If you look at the population forecast for the region, you’ve got ask, ‘Where are we going to put all these people?,’ ” Kyser said. Stine stressed that plans for the Tejon Ranch master-planned community are tentative, but officials at the publicly traded firm said they were obliged to announce their plans. Tejon Ranch has signed a letter of intent with Pardee Construction Co., Lewis Investment Co. LLC and W.L. Homes LLC to form a joint venture partnership to develop the 4,000-acre community just north of Highway 138 on 12,000 acres that the company owns on the L.A. County side of the border with Kern County. When Tejon Ranch announced the proposed development, it’s stock shot up from about $25, to $32 a share, while Newhall Land’s shares fell from about $26 to $24. Marlee Lauffer, a Newhall Land spokeswoman, said she couldn’t comment on the Tejon Ranch project, but did note that Newhall has 9,000 residential lots left to develop in Valencia, and another 21,000 in Newhall Ranch. “Our expectation is that we will be built-out in Valencia by 2005, and Newhall Ranch will go for another 25 years,” Lauffer said. (Ventura County has filed a lawsuit in opposition to the project.) John McGee, a senior vice president with Pardee who is overseeing the Tejon Ranch project, said there has been a surge in light industrial development along Interstate 5, especially in Santa Clarita, which in turn is stoking demand for housing. “People who may want to work there are going to look to other outlying areas for more-affordable housing or a less-urban lifestyle,” he said. The would-be partners are conducting a feasibility analysis of the project and beginning to look at different planning concepts for the property, but a project of this size could take years to come to fruition, McGee conceded. “When you’re looking at any development of 1,000, 2,000, 3,000 acres or more, you’re obviously going to be subject to several economic cycles of supply and demand. We’re probably looking at 10 years plus (for the project to break ground), but it’s just very difficult to say.” Ehud G. Mouchly, chief executive of the real estate investment firm READI, said that developing a project 25 or more miles north of Valencia represents a “major leap of faith,” but with the pace of California’s population growth, demand could catch up. “We’ve seen it happen before. The next decade, the demographics will be so radically different, some of the old models will have to be broken,” he said. “With the working population diminishing in size, and the number of retired and newly retired growing why not move to Gorman? One advantage the Gorman area has over Palmdale and Lancaster, two communities long seen as L.A.’s source of affordable housing, is Interstate 5, said Mouchly. It’s wider and can handle much more traffic than Highway 14 into Palmdale. I-5, in fact, is the primary link between the northern and southern halves of the state. For Tejon Ranch, the proposed master-planned community is part of a push by Stine to tap into his company’s biggest resource, its 270,000 acres of raw land. It is developing a 350-acre business complex near Gorman, and has signed an agreement to jointly develop with Enron Capital & Trade Resources Corp. a $500 million power plant on its land, capable of generating up to 1,000 megawatts of power.

Previous articleRE Column
Next articleFastTrack
-Advertisement-

Featured Articles

-Advertisement-
-Advertisement-

Related Articles

-Advertisement-
-Advertisement-