Newhall Land Plots Strategy After Turbulent Times

For a business that has been around for more than a century, the past couple of years have been anything but predictable for Newhall Land, master planner and developer of Valencia and the proposed community of Newhall Ranch. LandSource Communities Development LLC, the firm’s former parent company, filed for Chapter 11 in 2008 and emerged last August as Newhall Land Development LLC. And the reorganization led to a lot of uncertainty about future development in the area. But Newhall Land officials said, post Chapter 11, the business is well capitalized and moving forward with plans for Newhall Ranch. It is also moving out of its long-time headquarters on Valencia Blvd. into a new building a mile down the road. “The past couple of years were certainly different than other years,” said Newhall Land spokesperson Marlee Lauffer. “But while there have been changes in the economy and company, one thing never changed: our focus on Valencia and Newhall Ranch The Chapter 11 forced Newhall Land to cut costs, including letting 15-20 employees go, she said. It also impacted the company’s ability to give to local non-profit and charitable organizations. But the company was able to retain most of its executive team throughout the shake up. Securing all of the necessary permits and the like for Newhall Ranch has also continued moving forward. The master planned community will include 20,885 homes, 6,000 acres of dedicated open space, shopping, commercial real estate, and recreational facilities. And developers estimated that Newhall Ranch will double current jobs in the area. Lauffer said the company hopes to break ground on the community in the next two to three years and is finishing-up projects in Valencia. “Newhall Land is a community planner that takes a long-term perspective on completing its master plans,” said Lauffer. “And even through the reorganization we had the financing available to ensure we did not lose momentum.” Newhall Land also recently signed a lease for 27,221 square feet of office space at 25124 Springfield Court, next to the 5 freeway. It is currently moving its headquarters operations to the new location and hopes to be complete by the end of January. Lauffer said the new and modern space will help the company operate more efficiently Jason Crawford, economic development manager for the City of Santa Clarita, said Newhall Land never stopped working during the bankruptcy. Some projects slowed down for a while, but he still worked with the same people from the company as he had in the past. Newhall Land is a pillar in the Santa Clarita Valley, having developed a large chunk of the area’s residential and commercial real estate, he said. Its Valencia Gateway industrial park is considered one of the largest in L.A. and has created tens of thousands of jobs in the area, said Crawford. “We’re excited to see them back in full force, and I think it’s good they’re relocating,” he said, adding “everything we’re working on with them is going very smoothly.” In 2004, homebuilder Lennar and a partner formed LandSource Communities Development LLC and purchased Newhall Land. California Public Employees’ Retirement System (CalPERS) eventually invested more than $900 million in the venture. Following the reorganization, Newhall Land Development LLC has more than $90 million in cash and no debt on its balance sheet. Newhall Land also has stakes in Newhall Orchard, Valencia Water Company and the TPS Valencia Golf Club. It’s backed by a group of investment funds led by Anchorage Advisors LLC, Third Avenue Management LLC, funds affiliated with Och-Ziff Capital Management LLC, funds affiliated with Marathon Asset Management LP and TPG Credit Management, along with Lennar Corp. Newhall Land is managed by Emile Haddad, CEO of Five Point Communities Management, Inc., a newly formed management company jointly owned by Haddad and Lennar. “We are extremely pleased that we were able to complete our reorganization with the full support of our creditors and emerge as a stronger company,” said Haddad, shortly after Newhall’s emergence from Chapter 11. “Newhall now has an unleveraged balance sheet, sufficient cash to fund operations going forward, and is well positioned to navigate this unprecedented market.”