Santa Clarita OKs Mall Aid Package

The Santa Clarita City Council on Tuesday night approved a city financial aid package to Newhall Land & Farming Co. to help build the long-awaited Valencia Town Center, first major shopping mall in the burgeoning Santa Clarita Valley.

In return, Santa Clarita expects to collect an estimated $137 million in sales taxes from the mall and a nearby commercial property over 30 years.

The council approved the financial agreement with Newhall Land, the mall’s developer, on a 3-1 vote to the cheers and applause of scores of residents at City Hall.

Councilman Howard P. (Buck) McKeon, whose family owns the Howard and Phil’s chain of Western wear stores that often occupy mall space, abstained. McKeon said he wanted to avoid a possible conflict of interest.

Councilwoman Jill Klajic opposed the deal, saying: “I don’t believe Newhall Land needs the subsidy.”

But Councilman Carl Boyer III, echoing the comments of 14 enthusiastic speakers, said the agreement was a lucrative deal for the city. City negotiators, he said, “beat up Newhall Land very badly.”

Under the agreement, Santa Clarita will issue bonds to pay for $9.95 million in road improvements around the 80-acre mall site at McBean Parkway and Valencia Boulevard. The city will pay off the bonds using about $20 million in sales taxes generated by the mall.

The agreement was the product of two months of intense negotiations between the young city and Newhall Land, the most influential and largest builder in the Santa Clarita Valley.

Newhall Land officials originally asked the city to underwrite $15.8 million in bonds, later reducing the request to $12.8 million, saying the $180-million project was not financially feasible without the city’s help.

The company sweetened its request by offering to support the city’s annexation of 150 acres of commercial land into the city. The acreage, near Bouquet Canyon and Newhall Ranch roads, is the future site of a Builders Discount.

The City Council rejected the request for $12.8 million on July 24 and ordered City Manager George Caravalho to negotiate a better deal.

Under the agreement approved Tuesday, Newhall Land will support the annexation of 406 acres of vacant commercial land into Santa Clarita, including the Builders Discount site. Newhall Land also will grant easements allowing the city to construct hiking trails on company property bordering 4.5 miles of the Santa Clara River.

City officials estimated that the mall and Builders Discount will generate about $158 million in sales taxes over 30 years. The $20 million needed to retire the road bonds will leave the city with about $137 million.

The agreement also stipulates that the mall shall be known as the Valencia Town Center. Councilwoman Jan Heidt and some city residents had complained that the mall should be named after Santa Clarita, not just one neighborhood. Newhall Land officials said the name was not negotiable.