Prime Valencia Real Estate, $2 an Acre
By Leon Worden
Wednesday, June 7, 1995
Part 1 of 2.
If $2 per acre sounds like a steal, consider that some pioneer oilmen had paid Don Antonio del Valle's descendants $1.11 an acre for it, ten years earlier. The drought of 1863-1864 had devastated the Del Valle cattle ranch, and the hunt for black gold was on.
Henry Newhall purchased the Rancho after various speculators defaulted on loans. Between 1871 and 1875, Newhall acquired a total of 143,000 acres throughout Alta California that had fallen, or would soon fall, into receivership.
Newhall had made a fortune in railroads and knew the Iron Horse could bring people, commerce and prosperity to his new holdings.
For one dollar, the clever businessman deeded a right of way at the eastern extremity of his local Rancho to Southern Pacific's Charles Crocker (of banking fame) and Leland Stanford (co-founder of the California Republican Party).
For another dollar, Newhall sold them a plot of land for a whistle stop near present-day Railroad Avenue. Southern Pacific started designing a new town around it later that year and dubbed it "Newhall."
Following Henry Newhall's untimely death in 1882, his widow and five sons sought to avoid the family imbroglios that invariably seem to accompany the division of an estate. Rather than split their California Ranchos among themselves, family members joined forces and created what they called The Newhall Land and Farming Company to manage their agricultural and ranching concerns.
On December 23, 1936 sixty years after Alex Mentry started pumping high-grade crude out of Pico Canyon, a mile south of Newhall property Henry Newhall's grandson-in-law Atholl McBean finally struck oil on the Rancho San Francisco. McBean changed the old land grant's name to "Newhall Ranch."
Tracts of affordable housing started cropping up all over the Southland after World War II. Locally, William Bonnelli, then-owner of what is now the Saugus Speedway, built the first such tract up Seco Canyon.
Atholl McBean quickly saw the potential for ventures more lucrative than cattle ranching, onion farming and even oil drilling as did the County of Los Angeles. L.A. County supervisors, unlike their counterparts in Ventura, decided to tax land at its highest possible value. Property tax rates were now based on housing and commercial potential, whether or not homes actually dotted the landscape.
The Newhall Land and Farming Company spent the 1950s and early '60s readying itself for a change in direction. If it must pay taxes for housing, it may as well build.
Family members had strong feelings for the land and were loath to sell off portions piecemeal. Instead, they hired cutting-edge urban planners to design a complete, self-contained town with an appropriate blend of homes, schools, parks, shopping centers and other necessities.
As Henry Newhall had done 90 years earlier, in 1965 an aging Atholl McBean was ready to sell a right of way for the purpose of building a town. By now the automobile had replaced the locomotive as the primary purveyor of people; McBean sold the right of way not to Southern Pacific, but to the State of California for the construction of Interstate 5.
Again a new town would spring up along a major transportation corridor. On the advice of Henry Newhall's great-grandson and former Signal editor Scott Newhall, the town was called "Valencia."
Over the past three decades, Valencia has grown to be worth somewhat more than two bucks an acre, and The Newhall Land and Farming Company has parlayed itself into a publicly-owned limited partnership that trades on the New York Stock Exchange. Today, the company is master-planning new frontiers in Arizona.
Top company brass have always been people who, like Henry Newhall, could foresee new markets and blaze new trails. Company philosophy has consistently stemmed straight from where else? Leland Stanford's University. Almost all post-war executives, from James Finch and Jim Dickason to current execs Tom Lee and Gary Cusumano, were products of the Stanford business school that Atholl McBean helped found.
Much as its farming and ranching concerns keep giving way to construction, so will The Newhall Land and Farming Company chase new horizons when there are no more nails to drive or boards to hammer on the vast Rancho San Francisco.
In 20 years, who knows? Maybe The Newhall Land and Farming Company will become the dominant telecommunications powerhouse of the Pacific Rim. After all, ages ago, Henry Newhall ran a successful Pacific Rim import-export business out of San Francisco.
For now, however, housing remains the company's most visible industry. One hundred twenty years after a particular fortune seeker from Saugus, Massachusetts laid claim to the western Santa Clarita Valley, Newhall Ranch is back in the news.
TO BE CONTINUED....
Go to Part 2
©1995 LEON WORDEN ALL RIGHTS RESERVED
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