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Districts Like New Math of Newhall Pact : Education: Firm's agreement to finance campuses attached to its developments may change the equation in era of tight budgets.

November 06, 1995|DANICA KIRKA | SPECIAL TO THE TIMES

SANTA CLARITA — The Newhall Land and Farming Co.'s deal with Newhall schools to pay up to $70 million for campus construction has touched off a renewed effort by other school districts in the Santa Clarita Valley to pry more money out of housing developers.

Newhall Land agreed last month to pay for the construction of at least six elementary schools to mitigate the impact of two vast new developments. The deal calls for the developer not only to provide the land--a common action these days--but to pay for the schools that children from the new housing tracts will fill.

In exchange, Newhall Land wins support from the influential school district for its projects and moves toward satisfying a court ruling that in part said the developer had not adequately compensated schools.

The agreement was forged as the company takes to the Los Angeles County Planning Commission its plan to build two communities that would increase the Santa Clarita Valley's population by at least 70,000.

The pact has set a new standard for developers and school districts in the Santa Clarita Valley as they wrestle over who should pay for schools when huge housing tracts are built.

As state funding for new construction has all but dried up and bond measures to finance new schools have been consistently rejected by voters, cash-strapped school officials say the Newhall deal has emboldened them to press developers even harder to ante up more for schools, which are severely crowded.

"You're going to see a change that I predict would have an effect on all districts and all development" in the future, said Robert C. Lee, superintendent of the Hart Union High School District.

In addition, the Newhall deal has begun to unravel a delicate, 3-year-old agreement between developers, Los Angeles County, the city of Santa Clarita and its school districts. The agreement called for builders to pay more than state law requires to compensate school districts for the influx of students, but less than the Newhall deal stipulated.

Now that officials from the area's school districts have seen that fatter purses can be independently negotiated, all say they are reviewing the 1992 agreement. Most say they plan to simply pull out.

The agreement was not legally binding but was forged in an attempt to stop costly and protracted litigation between warring school districts and developers.

As developers seek government approval for their projects, a school district's support, or lack of it, can move or stall a proposal in City Hall or the County Hall of Administration.

In the case of Porta Bella, a nearly 3,000-unit housing project by Marina del Rey-based Northholme Partners, the Santa Clarita City Council has made it clear that unless the school districts are satisfied, the development won't be approved.

The get-tough movement among school districts has frustrated building industry representatives, who say they are being unfairly squeezed to pay for the state's abdication of responsibility to pay their share of public school construction.

"Obviously, the industry doesn't like it. We would be foolish to say that we did," said Cliff Allenby, a senior vice president with the Building Industry Assn. in Sacramento. "But, on the other hand, the way the system is working right now, we're kind of caught in the middle."

Typically, higher costs for developers are passed on to home buyers. Housing in the $150,000 range is particularly affected. Coincidentally, this range is the primary market for young families with children, Allenby said.

"We can't just build houses and walk out the door," Allenby said. "Unfortunately, we're being asked to fund more and more and it is having a detrimental effect on being able to build affordable housing."

Hart officials have already had their first session with Newhall Land representatives, and the high school district's board is expected to discuss the issue at its meeting this week.

Their needs, however, may be tough to meet.

Hart officials estimate that the new developments would bring in enough students to require the construction of two new high schools and two junior high schools, costing $120 million.

"You don't raise it with bake sales, that's for sure," said William Maddigan, director of business and fiscal services for the district. In the aftermath of the Newhall deal, Sam Veltri, manager of the Porta Bella project, anticipates that all the school districts will pull out of the 1992 agreement.

"I don't have a problem negotiating with the school districts," Veltri said. "What I don't like about it is . . . the mid-course change."

Newhall Land spokeswoman Marlee Lauffer said that despite the deal with Newhall schools, the company believes the 1992 agreement can still be viable.

"But there comes a point in time as these fees keep getting added onto a new home or commercial development where it becomes economically unfeasible," she said.

School advocates counter that developers use schools as a drawing point, particularly for lower-end home buyers.

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