Jittery Council Stalls Plans for Development : Palmdale: Annexation of Ritter Ranch is delayed amid fears that state budget problems will cut city’s revenue.

The Palmdale City Council has stalled the 7,200-unit Ritter Ranch project, one of Southern California’s largest planned developments, by delaying its annexation to the city.

Council members decided on the delay because they fear that the state’s budget problems could cut several million dollars from city revenues, which would make it difficult to provide police protection and other municipal services to a vast new area such as the 10,625-acre project. They are also concerned about a lingering dispute with the county over how tax revenue from the project would be shared.

“The bottom line is we need to have a more secure position before we proceed,” Councilwoman Teri Jones said. Although several council members said the delay likely will be temporary, they also agreed not to reconsider the issue until after the state adopts a new budget.

A representative of developer Ritter Park Associates, the partnership headed by La Costa resort builders Merv Adelson and Irwin Molasky, pleaded with council members to allow the project to proceed, saying each day of delay would cost $25,000.

But council members said at a meeting Thursday that they felt too uncertain about the city’s financial outlook to move forward with the project or 10 other proposed annexations that also were put on hold by the council.

By tabling a series of property tax sharing agreements with the county for the projects, the council kept all of them from proceeding to the Local Agency Formation Commission, which rules on annexations. That step would be one of the final major hurdles for Ritter Ranch.

The project also faces three legal challenges filed by local residents.

Meanwhile, Santa Clarita, concerned that it could be inundated by traffic from a developed Ritter Ranch, last month petitioned to join one of those lawsuits--a suit the Leona Valley Town Council filed in April against Palmdale.

Leona Valley is a tiny rural community west of Palmdale and near Ritter Ranch. The proposed project would be built over 20 years into a planned community of 20,000 residents and would transform a scenic area between 35th Street West and Bouquet Canyon Road along Elizabeth Lake Road.

The suit challenges Palmdale’s environmental review of the project. Santa Clarita officials said they want Palmdale to conduct more studies on the effect the Ritter Ranch project would have on traffic. An Oct. 9 court hearing has been set on Santa Clarita’s bid to join the lawsuit.

Although he is worried about the delay, Peter Wenner, Ritter Ranch project manager, said he saw nothing in the council’s debate that indicated a lack of support for the project.

In May, the council voted 4 to 1 to approve a development agreement between the city and Ritter Ranch locking in the project’s development rights for 20 to 25 years, assuming its terrain is annexed into Palmdale. The city also promised to help the developer get the land annexed.

However, Palmdale Mayor Jim Ledford said he could not rule out the possibility of the city backing away from the annexation if the state budget deals a severe blow to the city’s finances.

“If you lose a factor in an equation, you’ve got to recalculate,” Ledford said.

In its dispute with the county, the city has been demanding a 15% share, but the county has only offered the city 5%, increasing to 7% over several years.