Accord Reached on Rebuilding Downtown Newhall

Planners for the city of Santa Clarita and Newhall shopkeepers and merchants can breathe a collective sigh of relief. Their dream of rebuilding downtown Newhall, once the social and business core of the community, appears to have been saved.

The City Council voted 4 to 0 with one abstention Tuesday night to ratify an agreement with the Castaic Lake Water Agency over the city’s proposed Newhall redevelopment zone. The water agency, which had sued the city to halt the $1-billion redevelopment plan in 1995, voted unanimously Friday not to object to the new, scaled-back plan.

The agreement between the water agency and the city will open the door for city officials to begin funding improvements to downtown Newhall, the most impoverished area of Santa Clarita, city officials said.

“This is a long time coming,” said city spokeswoman Gail Ortiz. “This will be a first step in returning downtown Newhall to the gateway of the community it once was.”

But the agreement didn’t come easily.

The water agency, a state body that provides water to local utilities, receives revenue from water sales and from local property taxes. The agency’s officials were fearful that establishment of the city’s redevelopment office would reduce the agency’s share of property taxes.

Robert Sagehorn, general manager of the water agency, said that it opposed earlier plans because redevelopment zones drawn by the city included areas that were not blighted and were therefore ineligible for inclusion in such a zone under state law.

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

The water agency appeared to have the decisive hand in the dispute. Two weeks ago at a CLWA board meeting, Santa Clarita City Councilman Carl Boyer said that if the agency sued the city again over redevelopment plans, city officials would be forced to scrap its plans.

But in negotiations last week, city planners reached accord with the agency, agreeing to remove 56.9 acres from the proposed 900-acre redevelopment area and promising agency officials they would receive all the property tax revenue they need.