LAFCO Rejects Sunset Hills Proposal, Saying It Would Lack Tax Base : Santa Clarita: Officials said it made little sense to divide the valley into two cities.

The agency that oversees incorporations rejected a proposal on Wednesday to create a second city in the Santa Clarita Valley.

The decision by the Local Agency Formation Commission was a political victory for Santa Clarita officials, who had lobbied hard against the proposed city of Sunset Hills, saying they hoped to annex the area to their own city.

Opponents of the drive called it a sham by a development company to keep this area outside jurisdiction of the City Council of Santa Clarita, which must deal with slow-growth homeowners.

Following almost no debate, LAFCO declined to set an incorporation election for Sunset Hills, 27.8 square miles of mostly vacant land west of Santa Clarita and the Golden State Freeway. The plan had been championed by the Dale Poe Development Co., builder of the giant Stevenson Ranch development, which would have formed the nucleus of Sunset Hills.

Dale Poe has built about 500 of 4,400 planned dwelling units in Stevenson Ranch and hopes to build 4,600 more. Sunset Hills would have stretched from the Ventura County line to the Golden State Freeway, bordered by California 126 on the north and the Santa Susana Mountains on the south.

LAFCO Executive Officer Ruth Benell, in a report to the commission released June 7, said Sunset Hills did not have the commercial or industrial tax base to support a city. Sunset Hills has only 1,700 residents, and the area’s commercial district consists of three fast-food restaurants, a coffee shop, a motel and Six Flags Magic Mountain amusement park.

Sunset Hills would incur yearly budget deficits ranging from $275,000 to almost $500,000 during the first four years of cityhood, Benell said.

The leaders of the cityhood drive, Jeff Stevenson and Ernest Dynda, said Sunset Hills was a good candidate for incorporation because residents of the mostly undeveloped area could plan their new city from the ground up. Stevenson is a vice president of Dale Poe and Dynda once served as a consultant to the company.

But a delegation from Santa Clarita, led by Mayor Jo Anne Darcy, said it made little sense to divide the Santa Clarita Valley into two cities. In the past, some critics of Sunset Hills jokingly dubbed it “Poe-dunk” and “Poe-town.”

Chip Meyer, a resident of Sunset Pointe, a housing tract located within the proposed city, charged that Dynda and Stevenson started the cityhood drive only to keep the area out of Santa Clarita. The Santa Clarita City Council has repeatedly said that it hopes to annex up to 160 square miles of the surrounding Santa Clarita Valley, including the Sunset Hills area.

Meyer said 260 members of the Sunset Pointe Homeowners Alliance believe Dynda and Stevenson misled the area’s residents when they collected signatures on petitions supporting cityhood last fall. “We feel the process here has been abused,” Meyer said.

Stevenson denied Meyer’s charges. “This has been criticized by opponents as a sham and a hoax,” he told the commission. “I don’t think anything could be further from the truth.”

The Sunset Hills proposal also was opposed by Newhall Land & Farming Co., which owns about 70% of the land in the proposed city. Magic Mountain vice president David S. Groth said the amusement park does not want to be part of any city because a local government might impose a sales tax on tickets.

“It greatly concerns us that the financial viability of Sunset Hills would lay clearly on our shoulders,” Groth said.