The Other, Bigger Housing Project: Tejon Ranch

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Newhall Ranch isn’t the only massive residential development planned in Los Angeles County. Another one is up the Golden State (5) Freeway near the Grapevine.

Tejon Ranch Co. wants to plunk down a midsize city of 23,000 homes, and 14 million square feet of commercial and retail space in the county’s northwest corner.

But after a much touted agreement between Tejon Ranch and environmental groups four years ago that appeared to clear the way for the 11,000-acre Centennial project, very little visible progress has been made. The environmental impact report process has dragged out longer than expected with no release date in sight.

Instead, Tejon Ranch – the state’s largest remaining private owner of contiguous land – has focused on fast-tracking another somewhat smaller project, Tejon Mountain Village, just over the border in Kern County, which approved it last year.

Meanwhile, since the 2008 agreement, the housing market has gone through an epic bust, leaving open the question of whether there’s still sufficient demand for a project like Centennial, some 60 miles from downtown Los Angeles.

“It’s hard to see a project like this happening right now,” said Chris Redfearn, associate professor with the USC Price School of Public Policy. “But Tejon Ranch has a very long time horizon. So the key for them will be to bring this project forward at a time when the cycle turns once again and the demand will be there.”

Tejon Ranch officials said that environmental review and planning work is going on behind the scenes and that the project remains on track, though they won’t give a groundbreaking date.

“We have been working closely with the Los Angeles County planning office and the surrounding communities to ensure that our project correctly addresses all the issues associated with a master-planned community of this quality and scale,” said Greg Medeiros, vice president of community development with Centennial Founders LLC, the arm of Tejon Ranch carrying out the project.

Walkable villages

As currently envisioned, Centennial would be a self-contained community situated in a high-desert valley about seven miles east of Gorman that’s now mostly grazed grassland. At full build-out in 20 years, plans call for nearly 13,000 single-family homes, 6,000 condominiums and townhomes, and 4,000 apartments. Centennial is also seeking approvals for 12 million square feet of business and office space, and an additional 2 million square feet of retail space. There would be eight elementary schools, two high schools, four fire stations, 21 parks, two transit centers and 155 miles of internal roadways.

The entire community would be structured around seven walkable villages that would be phased in one at a time. Plans call for the first village to be on the eastern portion of the site, next to the California Aqueduct. It would comprise 5,800 homes, and 225,000 square feet of retail and commercial space.

As has been the case with other major landowners such as Newhall Land Development LLC and the Irvine Co. in Orange County, once Tejon Ranch gets all the necessary government approvals, it plans to sell the home sites to homebuilders, including Pardee Homes and Lewis Homes of California, both of Los Angeles.

Local real estate experts said that in the long run, there will likely be some demand for homes in Centennial. They noted that a long-term housing shortage persists throughout much of California, though it has been masked in recent years by the housing bust. The tricky part for Tejon Ranch and the builders will be timing and navigating the balance between housing and business.

“If they rush this and don’t get enough buyers for the first phase or have to slash prices, then it risks souring the rest of the project,” Redfearn said. “On the other hand, if they move too slowly and don’t have enough business services and supporting infrastructure ready to go when the demand returns, then people won’t move there because it’s too remote.”

Tejon Ranch first announced plans for Centennial 10 years ago. From the start, environmental groups expressed concerns about the size of the project, saying it would diminish one of the largest areas of open space left in Southern California.

But in 2008, Tejon Ranch reached an agreement with a coalition of environmental groups – including the Sierra Club and the Natural Resources Defense Council – to set aside 240,000 acres of its vast holdings as permanent open space, mostly on four ridges on the ranch’s mountain ranges. In exchange, the coalition agreed to allow the Centennial and Tejon Mountain Village developments to go forward.

But not all environmental groups signed on to the agreement. The most prominent holdout has been the Center for Biological Diversity, which might sue to block the development once the environmental impact report is released. The group already is suing over the Tejon Mountain Village project, a resortlike development consisting of 3,500 homes, two golf courses and two hotels. The environmental group and other plaintiffs say it would harm habitat for the California condor.

Meanwhile, the Centennial project won’t have its first hearing until months after the environmental impact report is released, which is expected soon. Centennial spokeswoman Barbara Casey said planning has taken longer than anticipated. In recent years, new state laws require all major developments to come up with detailed plans for water supplies and reducing greenhouse gases, complicating the environmental review process.

Centennial and Tejon Ranch planners have also spent time working with the California Department of Transportation to push through major improvements to the 5 freeway, including adding an extra lane and building truck lanes.

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Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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