RESIDENTS REQUEST WATER AGENCY OK : THE BASICS OF DOWNTOWN NEWHALL REDEVELOPMENT:.

Byline: Amy Collins Daily News Staff Writer

Residents and community leaders beseeched the directors of the Castaic Lake Water Agency on Wednesday to back a multimillion- dollar, decades-long plan to revitalize downtown Newhall.

``As it is, downtown Newhall is dead. It's not dying, it's dead,'' Newhall Hardware general manager Victor Feany said.

Valerie Thomas, a board member of the Santa Clarita Valley Board of Realtors, said Newhall should be an inviting entrance to the city, not an embarrassment. ``That whole corridor is blighted. We drive through it, but we don't shop there,'' she said.

More than 50 people attended the Wednesday night meeting, and 18 spoke in favor of the city of Santa Clarita's plan to establish a redevelopment district that would seek to end the blight in downtown Newhall by fixing streets, repairing buildings, bringing a theater group downtown and repairing community centers.

City Councilman Carl Boyer said the project area accounts for 34 percent of the crime in the city and rejuvenating the area would increase Santa Clarita's safety record, now ranked No. 4 in the country. ``We would literally be the safest city of more than 100,000 population in the United States,'' Boyer said.

The water agency has been monitoring the city's plans, treating it as potential litigation. If they sue, city officials say they may scrap the whole plan.

The water agency is interested because it stands to lose income to the redevelopment project, money it needs to help pay for $900 million in water projects in the coming years, board President William C. Cooper said.

``We need those revenues to be devoted to buying water and building infrastructure,'' Cooper said.

While the city estimates the agency could lose $19 million in property taxes over 40 years to redevelopment, the agency estimates the figure at $29 million, agency General Manager Robert Sagehorn has said.

But if redevelopment is successful in reviving Newhall, causing property values to rise, the water agency would see $2.3 million more in revenue over 20 years than if Newhall continues along at its current 0.5 percent growth rate, Santa Clarita's Assistant City Manager Ken Pulskamp told the board.

The city originally proposed a $1.1 billion redevelopment district after the Northridge Earthquake, prompting the water agency to sue, claiming the boundaries went far beyond what a redevelopment agency should be. After $1 million in legal expenses and court losses for the city, the plan was withdrawn.

If the city establishes this smaller redevelopment district, it would be funded by the predicted increase in property taxes that would occur as the area recovers. The redevelopment agency would take part of the new taxes and part would go to the water district and 20 other agencies entitled to property taxes, such as schools and Los Angeles County.

Several water directors said the agency has been fighting the project out of principle that no other public agency has taken a hard look at whether the plans comply with state law.

In his presentation, Pulskamp said that of 21 impacted agencies, only the Castaic agency is fighting the proposal. Even Los Angeles County redevelopment officials approved.

The 919-acre redevelopment project seeks to make $228 million worth of improvements during the next 40 years. Pulskamp said he assumes that redevelopment funds will act as seed money. ``Redevelopment is not going to fix everything. It is a tool to help,'' he said.

Today, city and water agency officials are expected to meet to see if a compromise can be reached.

Downtown Newhall:

0.5 percent property value increase annually; Santa Clarita posts 1.5 percent growth.

18 percent decline in retail sales over five years; Santa Clarita shows 25 percent increase overall.

37 percent of households classified as low income.

37 percent of the city's crime happens there.

18 percent of buildings structurally unsafe.

Proposed redevelopment district:

919 acres.

3.4 percent of Santa Clarita's land area.

0.94 percent of Castaic Lake Water Agency's land area.

The city has identified $228 million of work to be done. (In 1996 dollars, it's $79 million of work.)

As property values rise, more property tax would be collected. The new portion over 1997 levels would be split between the redevelopment agency, the water district, schools, and other agencies. The redevelopment agency would use its share to make improvements in the district.

Planned improvements:

Construct a community theater.

Hart High School auditorium renovation.

Building facade improvements.

Street improvements.

Construct a gateway clock tower.

Build a downtown plaza.

Business assistance prorams.

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Box: The basics of downtown Newhall redevelopment (See text)