Incorporation for Calabasas Gets New Boost : Cityhood: An official estimates that the new city would be financially viable, with budget surpluses for its first four years. LAFCO has scheduled a hearing to consider the issue.

The chief administrator of the government agency that oversees creation of new cities recommended Monday that Calabasas be allowed to incorporate, giving a major boost to those who back cityhood for the affluent community.

The report to the Local Agency Formation Commission (LAFCO) reverses recommendations made two years ago, when a Calabasas cityhood movement failed after LAFCO’s staff concluded that such a city could not support itself.

Monday’s recommendation by LAFCO Executive Officer Ruth Benell does not guarantee approval by the commission of the drive to create an independent city in the Santa Monica Mountains at the west end of the San Fernando Valley. But her report is expected to have a strong influence on the commission’s decision.

Cityhood proponents said they considered it a significant factor in their favor.

“This means for us that all systems are go right now,” said Doris La Violette, executive vice president of the cityhood committee. “It sets the tone for the hearing process,” said Bob Hill, the committee president.

LAFCO has scheduled a hearing July 11 to consider the proposed incorporation. If the proposal wins the approval of the commission and then is approved by the Los Angeles County Board of Supervisors, cityhood backers may place the issue before voters as early as November.

The proposed 14-square-mile city of about 27,000 residents would be roughly bounded by Woodland Hills to the northeast, Hidden Hills and Ventura County to the north, Agoura Hills to the west and portions of Malibu and Mulholland Highway to the south.

Monday’s report, citing a financial analysis released earlier this month, said that the new city would be financially viable, with budget surpluses anticipated for its first four fiscal years. In 1988, LAFCO said an independent Calabasas would be $450,000 in debt after its first year.

Benell has attributed the community’s new financial stability to increased sales-tax revenues from auto dealerships and a motel.

Only developers might lose if Calabasas becomes a city, according to the report, which notes that newly elected city councils often impose building moratoriums. “Should that occur, those approved projects which are under construction would be allowed to proceed; those not under construction might not be allowed to proceed,” the report says.

Representatives of local developers, however, said they supported cityhood for Calabasas and anticipate no setbacks for pending projects. The representatives interviewed included Los Angeles attorney Douglas R. Ring, who said he represents several developers with projects in Calabasas; a spokeswoman for the Ahmanson Commercial Development Co., and a general partner for Las Virgenes Properties.

Hill said the cityhood committee has not discussed a building moratorium. He also said adoption of such a measure seemed unlikely because most of Calabasas’ buildable land is already developed.