Mark Gates, Developer, Needham Ranch

Interview by Leon Worden
Signal City Editor

Sunday, October 12, 2003
(Television interview conducted Sept. 4, 2003)

Mark Gates

    "Newsmaker of the Week" is presented by the SCV Press Club and Comcast, and hosted by Signal City Editor Leon Worden. The half-hour program premieres every Wednesday at 9:30 p.m. on SCVTV Channel 20, repeating Sundays at 8:30 a.m.
    This week's newsmaker is Mark Gates, developer of the Gate-King Industrial Park at Needham Ranch in Newhall. Questions are paraphrased and some answers are abbreviated for length.
    Today on SCVTV 20 it's back-to-back "Newsmakers" with Mark Gates at 8:30 a.m., followed at 9 a.m. by Gov.-elect Arnold Schwarzenegger's Santa Clarita campaign appearance.

Signal: Give us a thumbnail sketch of the Gate-King Industrial Park.

Gates: (Let me) give you a little historical background. The Needham Ranch was originally owned by Newhall Land and Farming. In 1885 they sold the property to Henry Clay Needham. Henry Clay Needham was an early pioneer in this area, and from 1885 until 1957, (his family) owned the largest portion of the Needham Ranch. At that time, his successors sold the ranch to my father. ... The purchase and sale agreement was written on the back of an envelope that my father happened to have in his pocket, and they just penciled out the purchase price and the sale — a little different from what you'd find today.

Signal: What was the purchase price in 1957?

Gates: The purchase price in 1957 was $1.1 million.

Signal: What's the property worth today?

Gates: Gosh. Well, without entitlements, it's not worth much. It's probably not worth much more than it was purchased for in 1957.

Signal: Where is this property?

Gates: The Needham Ranch is located on Sierra Highway. The easiest way to describe it is, I think most everyone here in the valley has driven down Sierra Highway and seen that rock archway that says "Live Oak Manor" ... out past Eternal Valley. That is probably in the center of the property's frontage on Sierra, and then it extends over the hill to Pine Street to the old Southern Pacific tunnel. (It extends) up toward the ridge that goes into Wildwood (Canyon), ... then comes back and goes down behind Pine Street, all the way to San Fernando Road, with frontage on San Fernando Road.
    So it's approximately 580 acres, including a 30-acre right-of-way for Southern California Edison. The project has actually been approved by the Planning Commission unanimously, and by the City Council unanimously.

Signal: So it's got those entitlements to make it worth something.

Gates: It has the entitlements. But within the 30-day appeal period, SCOPE and the Oaks Conservancy and the Oak Foundation of California filed a lawsuit under CEQA, the California Environmental Quality Act, challenging the environmental impact report. And that filing taints the approval if in fact they are successful. If they are unsuccessful in their lawsuit, then the project can go ahead as approved.

Signal: What is it that you want to build?

Gates: The plan includes a four-lane road between San Fernando Road and Sierra Highway, linking those two streets — if you will, a bypass for those who want to go onto (Interstate) 5 and want to avoid the intersection of San Fernando and Sierra Highway, and for others headed south, they can use that as well. And it also will be very convenient for people in the park.
    The design provides for a 250-acre park, which includes a wildlife corridor. Seventy-five acres of that park we have already deeded to the city, and we're in the process of preparing some additional maps, which will allow us, irrespective of the lawsuit, to go ahead and deed a significant portion of the park as well — which will give the city a park that they can open up in the very near future.

Signal: So about half of the property you're giving to the city for open space?

Gates: Yes. Actually, more of the property will be open space, but almost half the property will be deeded to the city during the course of the development.
    The portion of the property that is the park is what our family feels is the most pristine portion. Henry Clay Needham, during his ownership of the property over 65-75 years, granted a right-of-way to Southern California Edison for 50 feet through the center of the property; he had three gas pipelines; he had four oil pipelines; 20 oil wells with tanks and all their access roads. But fortunately (he took the) areas that are southern exposure that have very few oaks that are really relatively unattractive, and put all of the easements and rights-of-way and everything else on that portion of the property, thereby preserving, in pretty much its natural state, this 250 acres that we're talking about creating the park.
    It's the area that had been criss-crossed by all of these rights-of-way ... that we're developing ... into 68 lots. We also have a helipad and a county fire station site, which are badly needed for this southern part of the city. We have a school site, we have three miles of trails. The trails will run all the way from San Fernando Road up through the industrial development and then into the park. The trail will go right by the Pioneer Oil Refinery, which is the oldest oil refinery in the world, I believe, today; it will go by the Southern Pacific tunnel, the old tunnel that was built about 1875 by Chinese laborers; and then access the park. Senior citizens and people from Hart Park will be able to come down the sidewalk and access those trails.

Signal: You mentioned a school site. How many homes are you building?

Gates: We're building no homes. What we're doing is creating 68 lots, light industrial lots. We believe most of the lots have open space on at least one side, so they'll be rather unique in the sense that they're not just cookie-cutter, one right after another, but have some elevation attached to them and have some open space, and we believe (they) will be very attractive to companies coming out of the San Fernando Valley and wanting to come to Santa Clarita. Our economists who ran the numbers say that we'll probably have 7,000 to 8,000 employees, and it will really, I think, do a great deal to help the housing-jobs imbalance.

Signal: This year we've been dealing with smog. Some people say we shouldn't be building things like the Needham Ranch project because it will worsen air quality. Is it your contention that by providing jobs locally, you're stemming the flow of workers to the valley below, ultimately reducing smog levels?

Gates: I think it will. I think there are also a couple of other things that are important to mention, and that is that the entrance to the industrial park off of San Fernando Road is only six-tenths of a mile from the Jan Heidt (Newhall) Metrolink Station. So for those people who are coming from outside, either in the (San Fernando) Valley or the Antelope Valley, it will be a really viable alternative to take mass transit, which, again, eliminates cars.
    Clearly, if people stay within the community and don't drive outside the community, they'll have less mileage and there will be less pollution. So we think that those two things, plus the fact that Newhall itself is so close, we believe that's where people will gravitate to do their shopping, and it will really jump-start Newhall (revitalization). That to me is critical. That will also mean that people will spend less time in their cars and more time working and ... going shopping at a close-by location.

Signal: What kinds of jobs are these going to be? What kinds of businesses are you looking to attract? Are these going to be high-end jobs?

Gates: I think in the companies we've talked to, I think what we are finding in the companies we've spoken to are companies that want to have their principal office here, which means that their executives will be here. It also means that if they have (a research and development) element to their company, those people will be here. And then there will be light industrial jobs, assembly jobs, and some manufacturing — but it will be of a very passive-type manufacturing level.

Signal: We're not going to see smokestacks?

Gates: No.

Signal: Is there a prohibition on that sort of thing?

Gates: The property is not zoned for heavy industrial. It's zoned for light industrial business. We can put office buildings on the various lots, and we think the quality of the park will mean that the companies that come to the park will bring their chief executives and this will be a principal office for them. And those are the companies that we've spent time talking to.

Signal: How well do you think some of these jobs will fit with the demographics of Newhall, within a 1-mile or 3-mile radius of the project? Who's going to be coming to these jobs?

Gates: I think that light industrial as opposed to, let's say, a law firm or a professional firm ... light industrial, in my experience and the companies we've talked to, have a broad range of jobs, and I think Santa Clarita and Newhall offer an employment base that can fill a variety of roles. And so I think we're not going to be exclusively focused on one part of the community, but I think that the employment opportunities will be broad-based to everyone in the community.

Signal: The court awaits, but you've gone through the planning process with the city — and survived. What was it like to go through that process? How was the city? Did it live up to your expectations? Were there any surprises?

Gates: The first thing I should mention is, I actually had dark hair when I started this process.
    It was interesting because it was the first time I'd ever done anything of this magnitude. I have to tell you that I felt, starting with the staff, whom we worked with on our initial plan and developing what we were trying to do and get their advice and input and so forth, were very helpful. Noncommittal. But very helpful.
    We went to the Planning Commission; we probably had six or seven hearings before the Planning Commission. I found the Planning Commission very helpful. They asked very hard questions, difficult questions, that required a lot of work on our part. (They) were always objective and worked together — I mean I always felt that not everybody was supportive at one time or another, but they were working together to try to make a project that made some sense.
    When you do this (project) planning, at least in this particular situation — you know, we don't have an exclusive on good ideas, and what's the best way, and we don't have necessarily a clear picture of all the various elements that are important to the city. I thought that the Planning Commission did a great job at questioning, making suggestions, changing the project. Because they changed it. They changed it in very meaningful ways. Then we went to the City Council. And the City Council had different questions, different interests.

Signal: Did you get the feeling along the way that city staff was just trying to get more out of you?

Gates: Well, you know. There were times when I just wondered whether we as a family could afford to do a project in Santa Clarita. But that being said, there was a point in the process where I did say we can do no more. And the City Council questioned that. And then they did their own economic study and found that in fact that, even doing their own study, we had reached the limit of what we could do.
    I think, when you're an elected official, you're trying to do the best job you can for your citizens. And the more help that you can get from a developer, the better it is for the citizenry. At the same time, I felt that there was a genuine desire to see this project built, because of what it will bring to the community.

Signal: What will it bring to the community?

Gates: Well first, 6,000 to 7,000 jobs. And I think a jump-start to Newhall.

Signal: You mean redevelopment.

Gates: Yes. We have redevelopment property. When we're built out, we'll contribute $140,000, minimal, annually, to the Redevelopment Agency.
    We (also) agreed to contribute, over the course of the development, $2.4 million, which the City Council can use for the Community Center, for the beautification of San Fernando Road, the Pioneer Oil Refinery, park and ride. Then in addition, we have agreed to do curbs and sidewalks from Pine Street to Sierra Highway, approximately 1.2 miles, and including greenscape on the side — which will really create, we think, a gateway into Newhall and into Santa Clarita.
    So that was one of our really primary goals: Could we bring a quality development to an area near Newhall that would really help that part of the community and bring it back? Because in 1957 when we bought the property, Newhall was the retail center of Santa Clarita. It was the downtown, and very viable and vital and a great place. ...
    We will also bring water and sewer to people who don't currently have it just simply because the lines haven't been built. We're growing, in nurseries on the site, approximately 4,000 California live oak trees, ranging in size from little containers all the way to 54-inch box oaks.

Signal: Now, those are replacement trees...

Gates: Those are replacement trees. We're obligated to plant approximately 1,300 to 1,400. But also, we have indicated that on the graded slopes that are created by the development, we will plant native grasses and, where appropriate, oak trees in the park itself.

Signal: How many of the big heritage oak trees are you taking out?

We are not taking out any heritage oak trees. ... You read in the newspaper and elsewhere that we're removing 1,400 oaks. I think it's very important for the citizens of Santa Clarita to understand — 1,400 seems like a big number (but) that 1,400 includes two different species of oaks — one is a California live oak, the agrifolia; the other is a scrub oak.
    The California live oak, agrifolia, is the one that you see on the city seal. It's the one that people really love, and it's a beautiful tree. The scrub oak is really a bush. I mean, multi-stemmed, and it's not as important, I think, to most people. So of the 1,400, approximately 250 to 300 are scrub oaks.
    Then we need to look at tree condition, because that comes into play. In 1997, we had a big fire out at the Needham Ranch, and following that fire, the city's arborist and our arborist got together to look at a methodology for analyzing these trees that had been severely burned. And they worked out a protocol as to how trees ought to be judged. That protocol had one category of "severely fire damaged," and that's where (the tree's) crown has been substantially destroyed, and dead trees.
    Of the 1,400 oaks, 625 are dead or severely fire damaged. That leaves approximately 385 trees that we would remove, none of them heritage, and ranging in size from 8-10 inches in circumference to 24-36 inches.

Signal: How many oak trees will be left?

Gates: We have 10,680 oak trees on the property. So if you take the total of 1,400 and deduct it, you end up with 9,200-9,300 oaks that will still be on the property. I think what's also very important is that while the number of oak trees taken, even healthy oaks, at 385, is a substantial number of oaks, that is over a project of over 580 acres. We're at (about) 0.6 oaks per acre. So just to throw out a number, I think it has to be considered in relationship to the size of the project. ... and with the nursery oaks — and these are from local stock — we'll be able to replace the 1,400, irrespective of (whether they're) severely fire damaged ... with plantings and then we'll plant the remainder of them on the slopes.
    To my knowledge we're the first group that has ever gone out and really made an effort, (prior to) approval, (to establish) nurseries and so forth. We have also agreed to give the city 100 oak trees a year for planting throughout the city, and we've agreed to transplant one oak tree to the (future) Veterans Memorial (Park).

Signal: The SCOPE-Oaks Conservancy lawsuit alleges that the city violated its own oak tree ordinance and ridgeline protection ordinance when it approved your project. How severely does your project impact the ridgelines?

Gates: We think very little. You will not see a single building from state Route 14 as you come down and look at that ridge. In fact we'll go in and berm the existing water tank and plant landscaping around it, as well as another water tank up in that area.
    In several cases, for one a road going up to a water tank, we have reduced the ridgeline slightly. But it will retain its natural form and there will be no grading on the viewshed at all. It's all on the other side. And so I think we have minimal impact. On the far northerly part of the property next to San Fernando Road there is some grading on the ridgeline as it drops down to San Fernando Road, but that's already been substantially graded previously with some of the other uses.

Signal: What is your breaking point? How long will you submit to being dragged through court?

Gates: At this point, our family is so far into this process that we're going to have to adopt the old bulldog technique, and that is, just continue until we're completed.
    We believe that with the City Council and the Planning Commission and numerous community groups that have supported us, we have created a project together, all of us, that is really a wonderful thing for the city of Santa Clarita, and we're going to see that it's built.

    See this interview in its entirety today at 8:30 a.m. and watch for another "Newsmaker of the Week" on Wednesday at 9:30 p.m. on SCVTV Channel 20, available to Comcast and Time Warner Cable subscribers throughout the Santa Clarita Valley.

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