L.A. Moving to Resolve Fate of 520 Saugus Acres

In 1951 the City of Los Angeles, looking for a place to build an alcoholic rehabilitation center, paid $10 for 520 acres of brush-covered land in Saugus, a remote, sparsely populated area north of the San Fernando Valley.

The center closed in 1967. Over the next 20 years, all sorts of proposals were considered for the site, including, most recently, a prison. Each was rejected for financial or political reasons.

Today the land remains one of the largest chunks of undeveloped property in the fast-growing Santa Clarita Valley residential community. And City Council members again are debating the future of the land, which city officials say is worth at least $10 million.

Three Choices

But, this time, the matter appears headed for resolution.

Council members face three choices: sell the property without competitive bidding for $10 million to a community group that promises to pump profits back into programs for low-income residents; lease the land to hundreds of mobile-home owners displaced by development throughout the city; or sell the land at public auction.

Each of the proposals has advocates on the council.

Councilman Gilbert W. Lindsay wants the city to accept a $10-million offer from the nonprofit Watts Labor Community Action Committee. Also pushing the sale, which would go through without competitive bidding, are two big political campaign contributors--the Chastain Cos. and Watt Industries. The latter is owned by developer Ray Watt.

Since 1983, Watt Industries and the Chastain Cos. have contributed nearly $100,000 to the political campaigns of council members and the mayor.

The two firms propose to work with the Watts Labor Community Action Committee to build homes on the property, although they have not decided how many.

The city can bypass the usually required competitive bidding legally if there is a public benefit, the city’s attorneys said. Lindsay says the public benefit is the Watts Labor Community Action Committee’s pledge to use its share of the profits from development on programs that benefit the poor in his South Los Angeles district.

Bidding War Sought

City Administrative Officer Keith Comrie, however, recommends that the council sell the property at an auction. He said a bidding war could escalate the price.

“If we only had the one offer, I’d be tempted to say take the money and run,” said Daniel McGowan, an aide to Comrie, adding that the city has received half a dozen inquiries about buying the property. “There seems to be enough interest out there that I believe we could do better at an auction.”

Comrie says the council would be able to channel some or all of the proceeds from the sale to programs serving low-income residents.

Also supporting a public auction is Councilwoman Joy Picus, who expressed concern about the appearance of selling the property without competitive bidding.

“I don’t need what happened in Burbank happening in Los Angeles,” Picus said, referring to Burbank’s controversial preliminary award of an exclusive negotiating agreement to Walt Disney Co. for development of an entertainment center in that city.

A third proposal, which calls for leasing the property to a mobile home park, is endorsed by Councilmen Ernani Bernardi and Hal Bernson and the city’s rent control director, Barbara Zeidman.

Mobile home parks are rapidly disappearing throughout the city to make way for other, more profitable developments, Zeidman said. In many cases, the displaced residents are senior citizens living on fixed incomes. “There’s no place for them to go,” Bernardi said.

Two development firms, Dunn & Associates and Watt Construction Co. (no relation to Watt Industries) have proposed placing 1,600 mobile homes on the property. “The construction of a mobile home park on the city’s Saugus property will be a very timely answer to a critical social need,” developers Jim Dunn and Brady Watt said in a letter to the council.

Leasing the Land

Bernardi and Bernson argue that leasing the property would provide a continuous stream of income for the city instead of a one-time windfall from a sale. Bernson also says the city should retain ownership of the property in case it needs it someday.

Comrie, however, has cast doubt on whether the proposed developers of the mobile home park could win approval from the county or a proposed city of Santa Clarita for its proposal to build 1,600 mobile homes.

“The creation of 1,600 mobile home park units constitutes a major growth for the area,” Comrie said, noting the slow-growth sentiment that has fueled a cityhood campaign in the Santa Clarita Valley.

Although the property’s zoning is now controlled by the county Board of Supervisors, it would come under the jurisdiction of a new city of Santa Clarita if voters approve incorporation in November.

The property, at 27234 Bouquet Canyon Road east of Six Flags Magic Mountain amusement park, was last appraised in 1983 at $7 million, based on its development for 1,100 homes. If the property is sold without competitive bidding, another appraisal would be necessary, Comrie said. A reappraisal is not required if the property is sold at public auction. “Such an auction would itself determine the fair market value,” Comrie said.

Until recently, no one was willing to buy the property without assurances that housing could be developed on it. The city could not provide that assurance because the county controls the zoning. The land is zoned for agricultural uses; a farmer now leases part of the land for crops.

Although the city had been negotiating with the county to rezone the property in exchange for spliting the proceeds, Comrie recommended last month that talks with the county be cut off after the Watts Labor Community Action Committee offered to buy the property without a guarantee of a zoning change.

“Financially, it would probably be more beneficial to the city to sell the property in the near future for $10 million instead of sharing some undetermined sum with the county,” Comrie said.