Residents, City Officials Urge Scaled-Back Redevelopment Plans

Directors of a state water agency, which blocked plans to redevelop the Newhall business district two years ago, listened Wednesday night to pleas from residents and Santa Clarita city officials to support a pared-down alternative.

If the Castaic Lake Water Agency continues to oppose the plan, city officials said, they will discontinue their efforts to revive what was once the commercial heart of the Santa Clarita Valley.

“If they oppose and file suit, that will just about kill the project,” City Manager George Caravalho has said. “We’re not going to spend any more of the public’s money on legal fees.”

The water agency contends that it is acting as a watchdog to prevent money from being wasted on a district in an area that is not really in need of revitalization, driving up the water bills its customers must pay. Critics contend that the agency is just guarding its budget, which would shrink if the district is put into place.

The CLWA, which would have to turn over a percentage of the money it receives from local property taxes to a Newhall redevelopment agency, successfully sued the city in 1995, claiming that much of the city’s redevelopment zone did not qualify for funding.

State law mandates that for an area to be eligible for redevelopment money, it must be “blighted.”

CLWA General Manager Robert Sagehorn said in an interview Thursday that even though the city has cut its plan down from 1,400 acres originally to 919, there is still more fat in the proposal. He indicated that unless the city makes still more trims, the agency’s 11-member board will probably oppose it.

“The agency supports the revitalization of the core area of downtown Newhall,” Sagehorn said. “We just don’t agree that all the area they’ve designated is blighted.”

The CLWA, a water wholesaler that delivers State Water Project water to four local utilities, stands to lose $29 million over 45 years under the city’s current plan, Sagehorn said.

City and CLWA officials are scheduled to discuss a compromise later this month.

“I’m confident we can find middle ground,” said water agency President William C. Cooper. “What [the community] has to understand is we have to look out for the interests of consumers in the community. We have to make sure that the finances of CLWA are sound so the cost of water is not outrageous.”

What city officials hope to save is a central part of Santa Clarita’s history. Downtown Newhall was once the hub of the business community in the Santa Clarita Valley, but in recent years the area has been hurt by more modern shopping areas elsewhere in the city.

“I’ve lived in Newhall 65 years,” said Tom Frew, one of the residents who addressed the water agency’s board of directors Wednesday. “This area is in decline and I urge you to support this development.”

During the city’s presentation Wednesday, Assistant City Manager Ken Pulskamp said he was “holding out an olive branch” to the CLWA and that the city hoped for better relations with the agency.

But Pulskamp also defended the city’s plans, handing out photos of abandoned buildings, shabby homes and curbless streets and quoting figures illustrating the area’s steady decline.

While retail sales for the rest of the city have increased almost 25%, Newhall experienced an 18% decline. The proposed Newhall redevelopment area contains only 4% of Santa Clarita’s population, but accounts for 37% of the city’s low-income housing and 36% of all its crime, officials say.

“We know this is not going to be the answer by itself,” Pulskamp said. “This investment we hope will motivate investment from the private sector. . . . We know this is not going to be an easy process.”

Pulskamp pointed to the benefits that the water agency would gain from the project as soon as the improvements--paid for by redevelopment money--started to spur increases in property values. A portion of the increased property tax would end up in the CLWA’s coffers, Pulskamp said.

But Sagehorn said that the windfall the city claims would come from its redevelopment efforts was far from a sure thing. He said any investment poses a risk the water agency may not be willing to take.