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Current pricing of industrial land in Southern California indicates
that the Newhall property could be competitively priced at $3000
to $3500 per acre. (See Section V for discussion of pricing). As-
suming this price to be the current value of the land, the 19 52 per
acre income ($53) rep re sen ts a 1. 77 to 1. 51 percent gross rate of
return. Using 6 percent as a reasonable rate of return, the cost
of using the land for farming as opposed to its use for industrial
sites is $127 to $157 per acre per year.}:_/

5. The attractiveness of the Newhall property to industry is enhanced
by the availability of large sites on the railroad and close to major
highways. Adequate utilities and good weather conditions are also
favorable factors. Approximately 190,000 people live in the San
Fernando Valley, within 20 driving miles of_ the center of the New-
hall property; therefore, a good potential labor supply is located
within a tolerable commuting distance . In addition, the good in-
dustrial sites in the San Fernando Valley are expensive and limited
in number.

6. Residential development on the property at the present time does
not seem to hold good possibilities for s.uccess . Large vacant
plots of ground in the San Fernando Valley are still available for
use as residential areas. It is reported that as much as 35 per-
cent of the working population of the Valley moves out of the Valley
during working hours . While the exact number of people living out-
side the Valley who now work in the Valley is not known, it is be-
lieved that the industry located within the Valley is not sufficient to
support the local population. Therefore, it is doubtful that an ex-
tensive residential development in the Newhall area, on the pe-
riphe:t:y of a valley that probably cannot support its own population,
could be profitably undertaken. Only after a firm industrial base
is established in Newhall can residential and commercial develop-
ment take place on a sound basis.

The towns of Newhall and Saugus are for the most part blighted
areas. Employment opportunities in the immediate area do not
seem adequate to support the local population. Even so, a number
of the employees of the Bermite Powder Company live in San
Fernando Valley. No definite pattern of employment or commuting
habits with respect to the local population was developed, since in
the short run the local population will not have any great impact on
the Newhall subdivision. Because of the substandard character of
Newhall and Saugus, the Company in its master planning may want
to buffer its own development from these towns.

l/ (0. 6 X $3,000) - $53 = $180-$53 :: $127
(0. 6 X $3,500) - $53 = $210-$53 = $157

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