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Friday, Feb 3, 2023
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$800 Million Project Finally Moves Forward

When the $800 million Vista Canyon mixed-use project breaks ground this quarter in Santa Clarita, it will be the biggest development in the region since the recession. The 185-acre project boasts 800 apartments, 295 townhomes, 950,000 square feet of office and retail space – and even its own water treatment plant and transportation center. It also could be the kickoff to a long-awaited, much-delayed development boom in the Santa Clarita Valley. But the process took 15 years as its Valencia developer battled critics who still oppose Vista Canyon – and pose serious challenges to future projects of its size. Most are environmentalists, unhappy because it is built in the corridor of the last natural river in Southern California. And water usage is a concern too, especially in the current drought – though Vista Canyon will employ cutting-edge recycling systems and drought-tolerant landscaping. “I’ve done bigger projects, but this is by far the most complicated,” said Jim Backer, 53, president of JSB Development, whose involvement with Vista Canyon started back in 2006 when he purchased the undeveloped acreage. Designed as a walkable, transit-oriented community that combines shopping, office buildings, entertainment, restaurants, apartments and townhomes, Vista Canyon is indeed ambitious. Of the 185 acres, about 90 will be developed into the largest walkable, transit-oriented development in the Santa Clarita Valley, where isolated, single-family tracts have long dominated and served as an example of urban sprawl. In contrast, every one of Vista Canyon’s living spaces will be situated within walking distance of its retail-and-office main street. The plan is to market amenity-rich, urban-style living in a suburban setting, targeting both millennials with young families and boomers ready to leave high-maintenance homes for a denser community and easier lifestyle. A pedestrian trail will meander through the community and link to a new, 10-acre park on the east side. The bus station and a Metrolink rail station, relocated from its current site at Via Princessa around 2017, will make it easy for residents to take public transit to work, minimizing car trips. Santa Clarita, which approved the project in 2011 and annexed the land for development from L.A. County the following year, is enthusiastic about the development’s forward-thinking elements and the new permanent office and retail jobs the project could create – up to 4,000, according to projections. “This is a place where people will be able to work, live and play. The Metrolink will allow them to hop on the train rather than drive through the city,” Jeff Hogan, the city’s planning manager, said. Legal battle The project has certainly not been without controversy, however. A month after it won city approval, JSB was sued by a coalition of environmental groups that oppose building within the flood plain of the Santa Clara River. Vista Canyon is nestled just south of the river which, at 83 miles long and with a 1,600-square-mile watershed draining the Angeles National Forest, is the second-largest river in Southern California. Although is it hemmed in by development throughout much of the valley, it’s the only river in Southern California that has been substantially untouched by development – until now. Dean Wallraff, an attorney with Sunland law firm Advocates for the Environment, which represents the environmental groups, said that the river, dry during much of the year, flows in a wide, shallow channel during the wet months. In order to keep the river from flooding Vista Canyon, its banks must be built up with concrete between La Veda Avenue and Jakes Way. Backer points out that the concrete will be overlaid with dirt and planted with natives like sagebrush and cottonwood trees, and the sandy river bottom will remain natural. But while the stabilizing efforts won’t look like the ugly concrete walls that line the L.A. River, Wallraff said they will function similarly. “The natural flood plain is more than a mile wide and the banks wander. Developers want to constrain the river to a narrow channel and build right up to it because that’s the most profitable thing to do. But it’s ecologically bad for an important ecosystem and it’s bad for wildlife,” Wallraff said. The ultimate irony, he added, is that Los Angeles is now exploring a billion-dollar effort to undo the artificial channelizing that the U.S. Army Corps of Engineers constructed on the L.A. River in the 1930s. “And here we’ve got this effort to do exactly the same thing to the Santa Clara River,” he said. His group won the initial legal battle against Vista Canyon in L.A. Superior Court but ultimately lost the war on appeal. Last year, Wallraff said, his clients agreed to a confidential settlement that cleared the way for the project to begin construction. Big potential Backer said his firm worked with an environmental consultant to minimize the impact of development on the river. “People would like the rivers to be more natural and protected. We found ways to support that, by making (the channel) as wide as possible – up to 800 feet – and trying to follow the meandering nature of the river so we won’t put in a bunch of straight (river banks),” he said. Backer founded JSB Development in 2000 after a career with Newhall Land & Farming Co., which developed the master planned city of Valencia. At Newhall, he shepherded the 12 million-square-foot Valencia Commerce Center with business partner Glenn Adamick and was responsible for bringing in Princess Cruise Lines Ltd. to anchor the 3 million-square-foot Valencia Town Center. Together with Adamick and partner Steve Valenziano, JSB also developed the 165,000-square-foot, six-building Tourney Place office campus, among other projects. Their company has so far spent north of $10 million on Vista Canyon on design and permitting. Once the entire development is complete around 2021, the cost will likely hit $800 million, Valenziano said, though JSB won’t bear all the expense. The plan is to begin grading and river embankment this quarter. Initial construction, expected to begin late this year, will include the water reclamation plant and a 56,000-square-foot office and retail building. JSB expects to sell the land and entitlements for the apartments to a multifamily developer that would start construction soon. In the second phase late next year, JSB will market the 295 residential lots to one or more homebuilders. And the final build-out – a town square with six, three-story office and retail buildings – will also likely be shared with other developers. Backer said Vista Canyon will be funded with a mix of traditional bank financing, individual investors and capital raised through the EB-5 program, which allows foreign investors to obtain a green card and a path to citizenship when they invest in a U.S. project that creates jobs. Some of the infrastructure, including the transit center, will be funded in part by city grant money. Backer thinks the potential returns over the next decade will be huge. “Our analysis shows that the apartment market locally is 96 percent occupied. There just haven’t been many new projects of this kind built up here,” he said. Groundwater questions The recession, of course, put a damper on development over the past eight years, but there also has long been opposition from residents, including an earlier court fight centered on water that started before the current drought emergency. In 2000, local residents and environmental groups criticized a report showing ample water supply for the region’s ambitious development plans, most put forward by Newhall Land & Farming Co. The company, now controlled by Orange County developer Emile Haddad, is seeking to build Newhall Ranch – which, at 20,000 residences and 5 million square feet of office space over more than 2,500 acres, is Los Angeles County’s largest-ever residential development proposal. The development remains mired in litigation – but not over groundwater issues. Legal efforts to halt it and other projects over questions of water supply failed. But the severity of the continuing drought has not allowed the issue to fade. Kurt Schwabe, an environmental economist and water policy expert at the University of California, Riverside, said that developments that already have been approved – such as Vista Canyon – should be required to use the latest water-conservation technologies. Backer said his project will be cutting edge, and will actually generate more non-potable water than it will use because the water reclamation plant will be able to capture, treat and reuse up to 400,000 gallons of water a day. “We’re not adding to the water challenges because we’re creating more (gray) water than we’ll use on the site,” he said. Throughout the project, turf will be used sparingly in favor of drought-tolerant landscaping and conservation-designed irrigation systems that will be installed along with water-efficient appliances and permeable paving that captures irrigation runoff. Still, upon completion Vista Canyon will generate an estimated drinking-water demand of roughly 200 acre-feet a year, or nearly180,000 gallons a day, according to the specific plan approved by the city. And like Vista Canyon, it’s likely that the myriad additional residential developments in the works also will have to keep a lid on water usage. According to a regional economic outlook report prepared by Santa Clarita, 36,171 total residential units have been approved or are in the entitlement process in the region. That includes the mammoth Newhall Ranch. But even if that project doesn’t move forward, 5,015 units are already under construction in the region and 10,217 units are in approved projects that have not yet begun construction. Schwabe believes the current drought crisis should serve as a red flag for future development. “In the past, water agencies have responded to development requests by going out and finding the necessary water for every developer. Now, it’s critical to have more of a back-and-forth discussion on how those developments impact environmental service and water supply in that district and surrounding areas,” he said.

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