ANTAGONISM REVIVED OVER NEWHALL PLAN : REDEVELOPMENT LEGALITY AT ISSUE.

Byline: Amy Collins Daily News Staff Writer

Detente has ended between the city and the Castaic Lake Water Agency over the Newhall redevelopment proposal.

The consultant hired by the water agency told the board Thursday night that the city's $12 million proposal for a scaled-down redevelopment district would not be legal because only 10 percent of the area would qualify as blighted.

``There are other options for financing this project,'' said Robert Sagehorn, the general manager of the Castaic Lake Water Agency.

The agency previously sued over a redevelopment proposal its officials considered too big, forcing the city to scrub a $1.1 billion plan.

The new presentation was not well received by Santa Clarita city officials seated in the audience Thursday. City Councilman Carl Boyer, who said he was speaking personally and not as a council member, told the water board he was ``frankly somewhat disgusted'' by its consultant's findings.

Assistant City Manager Ken Pulskamp said the presentation ``seemed to defy common sense.'' He called it obvious that the city-proposed redevelopment area - roughly along San Fernando Road, from Magic Mountain Parkway to the Antelope Valley Freeway, and along Lyons Avenue - is in need of repairs.

``I see empty businesses. I see dilapidated houses. I see a lot of people who look very poor to me,'' Pulskamp said. ``This area has been blighted and dilapidated for decades.''

The water agency's consultant, Calvin E. Hollis of Keyser Marston Associates Inc., said three conditions must be met before a city can form a redevelopment district: the area must be characterized by blight, it must be a serious burden on the community, and there must be no other funding solution.

Blight, he said, is characterized by stagnant or declining property values, high vacancies, lack of services, low lease rates, high crime and unsafe buildings.

The water agency will hold its regular board meeting Wednesday, where it could choose to take a stance on the city's Downtown Newhall Improvement Program.

The water agency sued in 1994 after it determined it stood to lose as much as $100 million over the 30-year life of the proposed redevelopment project. The public water agency gets part of its revenues from property taxes, which is also one of the funding sources for a redevelopment agency.

The agency said the city had defined too broad an area for redevelopment, which would have allowed it a wider property tax base. One year ago, the city settled with the agency and agreed to reduce the project. That round cost the city $300,000 in legal fees and cost the water agency $1 million.

Hollis said the city's smaller redevelopment district is still too big. The redevelopment project may legally include properties that are not blighted, but the area as a whole must be blighted, he said. He said the only area that would likely qualify under state law is a portion of downtown Newhall.

Hollis suggested the city fund the project through other means.

``This is not a city in terrible financial situation. It's a question of priorities. It comes down to real priorities,'' Hollis said at a media briefing before the board meeting. ``They've got to reach in their other pocket of funds and solve the problem.''

Public comment was sought at the conclusion of Hollis' presentation to the board, which included extensive photographs of the area and information packets for the 35 people in the audience.

Ken Brown, an attorney for the city, urged the water board to delay taking action on the presentation and wait for the city to complete its own evaluation of the proposed redevelopment area. He said that report is expected in April.

Pulskamp called for better cooperation between the city and the agency. ``We don't want to go through the same agonizing process we did before, tearing up the community,'' he said.

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Photo

Photo: Area residents walk past cracked buildings along San Fernando Road in Newhall, where city redevelopment is proposed.

Shaun Dyer/Special to the Daily News