Newhall Land and Farming Co., the company that built the planned community of Valencia, may be handed over to Middle East developers.
Reports swirled last week that financially struggling Lennar Corp., the Miami, Fla.-based homebuilder that in 2004 bought Newhall, is being sought by a group of United Arab Emirates investors.
Any takeover was unconfirmed, but the prospect of handing the reins of the company to foreign investors has generated uncertainty in the community at a time when Newhall is readying a massive development adjacent to Valencia.
“A lot of people in the community appreciate the fact that they have been traditionally a local company,” said City Councilman Tim Ben Boydston. “One of the reasons for the success of Newhall Land is the local involvement listening to the citizens who live here. If that sort of cooperation was to stop, they would probably find themselves with a lot more difficulty developing properties.”
Newhall is now working through approvals for a 21,000-home development called Newhall Ranch along the Santa Clara River. It’s the largest planned subdivision in the county outside of Tejon Ranch’s planned Centennial community at the Kern County line.
Boydston said the community was apprehensive enough when Lennar a company based on the other side of the country acquired Newhall. Now there “might be some nervousness and unhappiness” among residents that the latest potential investors are foreign, he said.
Newhall Land was founded in 1883 by the five sons of Henry Mayo Newhall, a prospector who came to California seeking gold. The company had a vast farming and cattle operation of 220 square miles. It began developing the property with the master planned community of Valencia in 1965. Since then, Newhall has built about 20,000 homes there, as well as parks, trails and other community features.
“They’ve done a lot for the community. I think everybody realizes that and appreciates it,” said Jason Crawford, the city’s economic development manager.
After more than 120 years of local control, the company was bought in 2004 for $1 billion by Lennar and its spin-off, LNR Property Corp. in a joint venture. But amid the collapse of the housing market, Lennar has fallen on hard times. Last year it sold a stake in the joint venture that owned Newhall to another housing company, though Lennar remained managing partner.
The company’s 2007 revenue plummeted almost 40 percent to $10 billion, and its stock has fallen 60 percent over the past year. Lennar declined to comment on any potential takeover.
