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City buys block in Newhall

Santa Clarita spends $6.2M on deal, hopes to draw investors

Posted: October 28, 2009 10:01 p.m.
Updated: October 29, 2009 4:55 a.m.

The city's redevelopment agency is finalizing the largest purchase of land it has ever made in downtown Newhall, officials said.

Santa Clarita is spending $6.2 million for a single 2-acre block of commercial real estate off of Lyons Avenue between Main Street and Railroad Avenue after two of its three private property owners came close to foreclosure, city officials said.

City officials said they hope the purchase will entice private developers to invest in the valley's bedrock community.

Three businesses are currently leasing space on the block: Insurance Auto Collision, Wanjon Auto and Automotive Technology. The city will honor the leases for at least the first year, and may later buy out the leases if someone offers to redevelop the block, said Paul Brotzman, city director of community development.

For the last several years, the city has been working to transform downtown Newhall into a pedestrian-friendly arts and entertainment district.

The city plans to develop more than a million square feet of commercial space in Newhall, according to the downtown Newhall specific plan approved in late 2005.

The land is about one block from the future site of the new library the city expects to erect by 2012, which will give the city an opportunity to overhaul the north edge of downtown, said city Redevelopment Manager Armine Chaparyan.

The purchase of the property is expected to clear escrow in a couple weeks, she said.

The city has not planned how it will use the land. However, in order to receive a mix of state and federal grants, it will have to develop a mix of residential and commercial property on the block, Brotzman said.

The city wants to find a business interested in developing larger scale projects with Santa Clarita - like a grocery store or theatre - to draw in consumers from outside of Newhall, he said.

Brotzman said when downtown redevelopment began, businesses showed little interest in investing in Newhall, partly because the city did not control any large chunks of land. The recession hasn't helped either, he said.

City officials said they hope purchases like this will attract private businesses to the area.

The two people who are selling the land to the city offered to sell after they had accumulated a total of more than $4 million in debt as their plans to develop property fell through, Brotzman said.

If they had not sold to the city, the sellers would have likely gone into foreclosure, he said.

In order to make the sale more enticing to the city, the sellers worked out a $2 million option to obtain the rest of the block, Brotzman said.

Gary Avery, one of the sellers, said he had no comment about the sale.


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