The city of Santa Clarita is looking to support a much-ballyhooed but struggling development on the east side of town with a $1.1 million loan to complete the design of a bridge to improve Vista Canyon’s connectivity.
In the agenda item, city officials stated their help is needed to ensure the timely completion of the bridge for the transit-friendly project that has yet to meet the demand initially anticipated.
The recommendation calls for the city to loan itself the money from its general fund to finish paying for the design, which is 90% complete, according to the city’s agenda, because the developer “is unable to pay for recent elements of the bridge design nor the completion of the design without significant delays to the project.”
The bridge and associated road improvements will provide a connection from the intersection of Soledad and Lost canyon roads to the Vista Canyon development, including the recently completed Vista Canyon Multi-Modal Transit Center, according to the city.
It’s also noted in the project’s approval as required for emergency access, and there’s a timeliness to the recommendation.
“On Oct. 25, 2018, the city of Santa Clarita (City) was allocated $20 million in Los Angeles County Metropolitan Transportation Authority Measure R funds for construction of the Vista Canyon Road Bridge,” according to the agenda. “The allocation requires construction funds be spent by June 30, 2026, and the Vista Canyon Road Bridge to be constructed by the city.”
The city cited “significant financial difficulties” for the project’s developer, JSB Development, in their reasoning for the support. In August, records obtained by The Signal reported the default of a $24.2 million loan for the property.
The 185-acre, mixed-use project near Highway 14 and the Via Princessa off-ramp approved in 2011 called for 1,100 residential units, 950,000 square feet of commercial space, the Vista Canyon Multi-Modal Transit Center and a water reclamation plant.
However, since the start of the design phase for the project in 2006, the project’s obstacles have included a pair of recessions and an unprecedented global pandemic, JSB President Jim Backer said, and the latter has “upended” the marketplace.
“In the office market and retail market right now, even the things that everyone thinks we should be doing are having a tough time in the financial world because of the higher rates and the inflation,” Backer said, referring to the challenges.
Occupancy figures were not immediately available. However, Backer said Monday that 725 of 1,100 units have been built and so has 60,000 of the 950,000 square feet of commercial square footage, as well as the water-recycling plant, Vista Canyon Park and the Mitchell River House.
In addition to being planned as a balanced, mixed-use community, Vista Canyon is part of a public transit center and has a net-zero water footprint because of the water-recycling factory, Backer said, a combination that makes the project state of the art.
He said the city has been tremendous in its support for Vista Canyon, but getting support from financiers has been tough.
“It has not been an easy time to get the support and move forward,” he said.
In one recent example of how the flux has impacted the real estate market, Princess Cruises, which moved its corporate headquarters to Santa Clarita more than 20 years ago, recently announced it was looking to sublet about 300,000 square feet of office space that the company occupied.
Princess issued a statement saying it plans to keep its headquarters local, but the move creates vacancies in about 10% of the SCV’s total supply of office square footage.
City officials stated Friday the agenda item is “specific to assuming the completion of the design from the developer,” according to an email from City Engineer Damon Letz.
The money from bridge and thoroughfare fees the developer pays to achieve buildout are expected to make the city whole on the loan the city is making from its own general fund.
“Completion of the plans will lead to the (City) Council considering, at a different meeting, building the bridge,” he wrote. “The construction will be funded by the county funds and additional bridge and thoroughfare fees paid by the developer.”
Santa Clarita Mayor Cameron Smyth called the project “a key part for the east side of our community,” mentioning the city’s interest in the project’s success.
“We want to make sure that all the infrastructure is complete and that the residents, as well as the city, see the value on the return,” he said, adding the terms likely would be part of the discussion Tuesday.
City officials also expressed optimism that residential construction would continue to pick up this year during a budget meeting last week.
The Signal reported in January the city is taking ownership of the project’s water-reclamation plant, which can produce up to 371,000 gallons of recycled water per day, or more than 415 acre-feet per year, according to a release.
The bridge improvements also include a two-lane bridge with an emergency lane and shared-use sidewalk. The road improvements include a new traffic signal at Soledad and Lost canyon roads, and modifications to the roundabout south of the bridge to provide access to the Vista Canyon Multi-Modal Transit Center.