A long-planned resort community in the Lebec area took a significant step forward with an announcement Monday that the board of directors of developer Tejon Ranch Co. has approved a detailed plan for developing and marketing 3,450-home Tejon Mountain Village.
The company said it will now begin what it expects will be a two-year process of preparing tentative tract maps for review by the Kern County Planning Commission. If approved, the maps will allow the company to move forward with phased construction of the project.
Much work remains to be done, and the board’s green light does not necessarily indicate building will begin in the near term. But the company’s announcement does suggest it is making progress on one of its signature projects at a time when its farming and oil revenues are down.
“We believe starting the tentative tract map process sends a positive signal to the marketplace as a whole that we are ready, willing and able to bring this project to market with a clear path to execution,” Gregory S. Bielli, president and CEO of the Lebec-based agribusiness and real estate development company, said in a news release.
Located 40 miles south of Bakersfield, the residential project involves resort-style condominiums and custom, multi-acre lots expected to serve as second homes for upscale buyers. Plans call for up to 750 hotel rooms, spa and dining amenities, a 160,000-square-foot Farm Village accessible by the public and open space accounting for 80 percent of the total project.
Tejon Ranch spokesman Barry Zoeller said the timing of the business plan’s adoption, after years of relative silence on the project’s progress, reflects the lengthy process of conducting market and consumer research that was part of proving Tejon Mountain Village’s feasibility.
He noted it was only last year that the company bought out the interest of its former partner, DMV TMV LLC, in the project for $70 million in cash, giving Tejon Ranch sole ownership.
The company declined to provide a copy of the approved business plan, and said the project is not at a point where details like products and pricing can be disclosed.
Before the tract maps can be sent to the Planning Commission for review, Tejon Ranch will need to complete a drainage and water quality report, engineering and systems design, a geotechnical report and real estate title work.
Once the commission signs off, leaving the project fully entitled, Zoeller said by email, the company will analyze market conditions and forecasts “to then determine the optimum time to begin physical development.”
There will be flexibility on the timing of construction even after initial building has begun, he added. The project will have various phases that can start at different times, providing “flexibility to adapt to changing market conditions,” Zoeller wrote.
Bielli said, in a written statement forwarded by Zoeller, that investors have not grown impatient.
“Our shareholders understand that Tejon Ranch Co. is a long-term investment and that real estate development in California is a lengthy and often difficult process,” he said.
Announcement of the business plan’s approval came the same day Tejon Ranch posted a net loss of $788,000 for the three months that ended Sept. 30, as compared with net income of $1.75 million during the same period a year earlier.
The company’s earnings report said revenue in the third quarter came to $11.9 million, a 14 percent drop from a year before.
Tejon Ranch attributed the declines to lower farming and mineral resource sales. It said they were partially offset by improved earnings from joint ventures.
“Like many other companies that operate businesses linked to commodities, 2015 has presented a series of challenges,” President and CEO Gregory S. Bielli said in a news release.
“In addition to the mild winter, which caused a historic decline in pistachio production throughout the region and impacted our farming revenues, a more than 50 percent decline in oil prices negatively impacted our mineral resources business unit.”
Tejon Ranch is working on two large residential developments in addition to Tejon Mountain Village.
One of these, Centennial, is a master-planned community proposed to be built north and east of Highway 138 and Interstate 5. It was part of an area-wide plan adopted by the Los Angeles County Board of Supervisors in June.
The other project, another master-planned community known Grapevine, is undergoing an extensive environmental review required by Kern County. It is proposed to be built near the foot of the Grapevine.