CITY STUDY SEES LOSS IN PROJECT.

Byline: Teresa Jimenez Daily News Staff Writer

The massive Newhall Ranch residential and commercial development would cause the city to lose up to $530,000 annually, according to a new City Council-commissioned study.

The report sharply contradicts a similar evaluation conducted on behalf of The Newhall Land and Farming Company, which proposes building 24,000 homes near the Los Angeles-Ventura county line.

It also bolsters the city's position against the project, which is scheduled to go before the Los Angeles County Board of Supervisors on July 28. Officials have anticipated that a smaller version of the development will eventually be approved.

Santa Clarita and Ventura County officials filed an appeal against the project after the Los Angeles County Regional Planning Commission recommended its approval to the board.

``We shared our conclusions with Newhall Land and Farming,'' said Steve Stark, director of administrative services for the city. ``It's just different assumptions based on the same numbers. We wanted to look at the level of services the city provides and the impact from the county.''

Newhall Land's Levander Report concluded that the city would receive $1.8 million in revenue from the Newhall Ranch development after costs for road maintenance are subtracted.

The city's report, however, conducted by Ultra-Research, found that the Levander Report did not look at the effects on Santa Clarita's parks and recreation services or realistically look at potential sales tax revenue.

``It looks like the city's analysis has what we would consider flaws,'' said Marlee Lauffer, a spokeswoman for Newhall Land. ``They took an ultraconservative position on sales tax revenue. The auto mall and the (Valencia Town Center) mall are not duplicated anywhere in Newhall Ranch. Residents would use those services.''

Newhall Land's study estimated that the city would receive $35.1 million in sales tax money over the course of the 25-year construction and $2.4 million each year after completion of the project.

The estimate was based on the assumption that Newhall Ranch residents would make 35 percent of their taxable purchases in Santa Clarita. It also assumed that residents would spend 35 percent of their household incomes on retail goods.

The city's report, however, said Santa Clarita has lost about 2 percent in sales-tax revenue to the new Valencia Marketplace, along the Golden State Freeway in Los Angeles County jurisdiction.

In addition, the report said that Newhall Land's evaluation did not take into account family size compared with family income.

And larger-income households at some point do not continue to spend 35 percent of their income on retail goods, according to the report. ``At some point, your spending on consumer goods will taper off,'' Stark said. ``The assumption is that at a certain point the more you make doesn't mean the more you spend.''

The city's report estimated sales tax revenue using IRS tables to come up with the $16.9 million figure over the 25-year construction and $1.1 million annually after all the project's units are sold.

The report acknowledged that the revenue estimate is conservative, and is about 53 percent less than the Levander Report.

As for costs, the city looked at effects on services such as parks and recreation that the Levander Report did not.

For example, the city estimated that about 15 percent of the people who currently sign up for city recreation programs are not Santa Clarita residents. Based on that information, the report concluded that those noncity residents frequent city parks for the programs.

The city estimated that the cost per person to maintain the parks is $15.11. The report concluded that if the trend continues and 15 percent of Newhall Ranch residents use city programs, the cost to the city would be $156,000 per year for maintenance.

Using the same approach to estimate costs to recreational programs, the city estimated the per-person cost at $10.30. The city does not restrict registration to city residents and has a first-come, first-served sign-up policy.

The report concluded that if 15 percent of Newhall Ranch residents use city programs, the cost would be $106,000 per year.

Lauffer refuted the report's estimates, however.

``The report shows that Newhall Ranch (residents) will go to the city and utilize city parks,'' Lauffer said. ``It didn't take into account that they'll use Newhall Ranch parks, that city people will be using Newhall Ranch parks. We expect that they will be used by people throughout the region.''

But Stark said the city report did not tally costs of county residents visiting city parks or using city trails. Instead, it evaluated costs based strictly on recreational programs, he said.

It also factored in that the city spends $10.30 per person on recreational programs, compared with the county's $6 per person.

``What we did in our report was try to separate park usage from recreational activities. We concluded that with maintenance of parks and trails, for example, there was no impact,'' Stark said.