Stevenson Ranch Developer Settles Suit : Santa Clarita: The company agrees to pay $675,000 to ease traffic problems that the city fears will be created by a 2,555-unit phase.

The developer of the giant Stevenson Ranch will pay Santa Clarita $675,000 for traffic improvements to settle a lawsuit filed by the city, Santa Clarita officials announced Friday.

The money will be used to ease traffic problems that city officials believe will be created by a 2,555-unit phase that the Dale Poe Development Corp. has planned for a parcel of unincorporated land west of the Golden State Freeway and south of Magic Mountain.

The suit, filed against the development firm and the Los Angeles County Board of Supervisors, which approved the project, alleged that the environmental impact report violated state law because it failed to consider the impact of traffic, noise and air pollution on neighboring Santa Clarita.

The city had sought to reduce the number of housing units. But city officials hailed the agreement as a victory, saying they knew that they could not overturn the county’s approval of the development and needed the money for traffic improvements to soften the project’s impact.

“It’s an adequate way of addressing the problems,” Mayor Carl Boyer said.

Councilwoman Jo Ann Darcy said the city will scrutinize further development proposals by Dale Poe, which has received approval from the county for 4,378 housing units at Stevenson Ranch and wants to build another 5,000.

“The biggest gain is the message we send to developers that they have to address problems that affect the city even if the project is outside city limits,” Darcy said.

The city will use the money to widen Lyons Avenue, add left turn lanes at Wiley Canyon Road and Lyons Avenue and for other improvements. A portion will also pay the city’s $50,000 in legal fees.

Jeff Stevenson, a spokesman for Dale Poe, said, “Even if we had won the lawsuit, the city could have appealed, and it could have been tied up in the courts for years.”

Dale Poe’s development agreement with the county requires the firm to pay about $10 million to build freeway interchanges at Lyons Avenue and McBean Parkway. The company will donate 13 acres and $2.4 million for a new school in the fast-growing Newhall School District.