The Santa Clarita City Council will consider buying 114 acres of the proposed Lyons Canyon Ranch housing development property – which won’t be built – for preservation as permanent open space.

Lyons Canyon Ranch was planned as a 186-home development (96 detached homes, 90 condos) on 235 acres of land in Lyon Canyon, west of Interstate 5 between Calgrove and Lyons. After negotiating down from $3.5 million in 2009, the city has an opportunity to purchase the prime freeway frontage for a cool $1.76 million, according to city documents.

As open space parkland, the Lyons Canyon property would tie into the city’s neighboring Rivendale Ranch, where the city owns 60 acres of open space, and it would provide trail connections into Towsley Canyon.

The council will also consider a more expensive purchase of 6.53 acres in Canyon Country near Soledad and Sierra Highway for a permanent Canyon Country Community Center.

Negotiations began in May with the Kim family, which owns the currently undeveloped Canyon Country lot.

City Council’s approval would “secure a site suitable for future construction of the Canyon Country Community Center,” according to the City Council agenda.

“The site is centrally located to a significant amount of residential housing in Canyon Country, according to the agenda.

There’s the Jo Anne Darcy Canyon Country Library nearby, as well as senior housing, apartment complexes, mobile home parks and commercial shopping centers.

The current community center for Canyon Country, on Flying Tiger Drive and Sierra Highway, was established as a temporary site.

STAFF REPORT

RECOMMENDED ACTION

1. City Council approve the purchase of 114.21 +/- acres of real property in the Newhall Pass area for open space preservation, located adjacent to the City’s Rivendale Ranch property, portions of Assessor’s Parcel Numbers 2826-023-010, 013, and 031, at a total cost of $1,798,531, which includes escrow, title, appraisal fees, and due diligence costs.

2. Appropriate $1,798,531 from the Open Space Preservation District Fund Balance (Fund 358) to Open Space Preservation District Expenditure Account 12592-5201.004.

3. Appropriate $50,000 from Open Space Preservation District Fund Balance (Fund 358) to Open Space Preservation District Expenditure Account 12592-5201.008 for the purpose of property improvements, including signage, gates, and construction of a trailhead.

4. Appropriate $3,500 as an on-going annual expenditure from Open Space Preservation District Fund Balance (Fund 358) to Open Space Preservation District Expenditure Account 12592-5185.003 for the payment of annual property taxes.

5. Authorize the City Manager, or designee, to execute all documents, subject to City Attorney approval.

BACKGROUND

Lyons Canyon Ranch tentative tract map | Click to enlarge  (courtesy of Stan Walker)

In March 2009, City staff approached the owners of the vacant property located north of the City’s Rivendale Ranch open space at Towsley Canyon, west of the Old Road, to determine if the property could be purchased for open space preservation. The owners had listed the approximately 118 acre property for sale in 2008 for $4,600,000, and an earlier offer by a third party failed to result in a completed sale. At the time, the owners told staff that there was interest in selling their property at or near a price of $3,500,000. The City had the property appraised in September of 2009 for $2,275,000. A decline in property values was a factor in the negotiations, and negotiations stalled as the potential purchase price was unable the to meet the owners’ expectations. This property was once included in a housing development effort, which was known as Lyons Canyon Ranch.

When the real estate market showed potential signs of stabilization, the owners had the property appraised. In November 2012, the property was valued at $2,400,000. Staff reviewed the appraisal and concluded that the asking price, in excess of $20,300 per acre, was not comparable to the market value of similar properties. Negotiations began again, and due to the previous decline in values, staff had the property re-appraised in August 2013. That appraisal reported a value of $1,090,000. The differences in the appraised values reflected the wide range of comparable sales and was considered indicative of the on-going volatility of the real estate market.

In July 2014, staff continued conversations with the owner to purchase approximately 114.21 acres of this 118 acre property for open space preservation. If purchased, this property would increase trail access in Rivendale Ranch, where the City currently owns 60 acres of open space, and it would provide trail connections into Towsley Canyon.

The Trust for Public Land has been working on other land acquisitions in the Newhall Pass. The 302 +/- acre Gateway Ranch/Las Lomas property is currently in escrow for $15,397 per acre. The pending sale for the Gateway Ranch property is a current comparable and very similar to the subject property.

Recently, the owners of the subject property have revised their offer to sell to the City. They have indicated that they would sell all of their property west of the Old Road, totaling approximately 114.21 acres, to the City for open space purposes, using the same value as the pending Gateway Ranch sale of $15,397 per acre. The approximately four acres of their property adjacent to the Golden State Freeway, east of the Old Road would be retained and are not a part of this offer.

The purchase price of the property is $1,758,531. Closing costs, which include escrow, title, appraisal fees, and due diligence costs are estimated at $40,000, for a total cost and appropriation of $1,798,531. An additional $50,000 is needed for the necessary property improvements, including signage, gates, and the construction of a trailhead. An ongoing appropriation of $3,500 annually is necessary for payment of property taxes since the property is outside of the City.

This acquisition is in compliance with the mission of the Open Space Preservation District. It has been reviewed pursuant to the California Environmental Quality Act (CEQA) and is exempt under CEQA guidelines Section 15313, Class 13, as an acquisition for conservation purposes, and Section 15325, Class 25, as a transfer of an ownership interest in land to preserve open space and existing natural conditions. Any subsequent or proposed changes in the use or condition of the property will be subject to CEQA guidelines.

ALTERNATIVE ACTIONS

1. Direct staff to cease purchase of the property.

2. Other action as determined by the City Council.

FISCAL IMPACT

The total costs associated with the property acquisition are estimated at $1,852,031. Upon City Council approval of the Recommended Action, funds will be available in Expenditure Accounts 12592-5201.008, 12592-5201.004, and 12592-5185.003 to complete the transaction, provide for the necessary property improvements, and pay for property taxes on an annual basis.