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Aug. 7—For all its many years of planning, project permitting and legal battles, Tejon Ranch Co.'s next big task on the way to developing four separate, master-planned communities has little to do with any of that.
More than anything else, what it needs now is to form a strong relationship with another company. And looking forward, it will probably need several such partners before it can make progress toward its goal of developing 35,000 residential units near Kern's southern border.
The Lebec-based agribusiness and real estate development company has never built an apartment building, let alone 13 of them with a total of 495 rental units, as its plans call for at Outlets at Tejon. The idea is to provide housing for future workers at the area's commercial and industrial projects.
"We don't have the expertise in-house of doing multifamily, and there are a lot of good, solid companies both locally, Southern California, (and) California-based, that have that expertise," said Barry Zoeller, Tejon Ranch's chief spokesman and head of investor relations.
The challenge is one Tejon Ranch will face again and again in the years to come. In some cases, its partners will need construction know-how, such as retail or hotel development. But in other cases, it'll be more about bringing money to the table.
Fortunately, the company does have experience forming joint-venture partnerships. The Tejon Ranch Commerce Center is an example, as is its latest industrial development, a speculative project being built with the help of Southern California development giant Majestic Realty Co.
The search for an experienced apartment developer started in the spring. The focus now is on identifying different companies that appear best suited for producing a quality project, Zoeller said, adding, "Our brand is important."
After that will come a period of sharing information and examining market research. Zoeller said whichever company Tejon agrees to partner with on the apartments will share equally in rental proceeds.
Tejon's ability to find the right partner will make all the difference for the project's long-term success, said Bruce Davis, senior vice president of development at Bolthouse Properties in Bakersfield.
"You want to make sure whatever you do you're getting the right info and making the right decisions," he said.
That said, Davis has no doubt the company is up to the task.
"They are definitely smart enough to figure out the best way to go," he said.
In general, Tejon Ranch's partnerships are structured to be 50-50, with the Lebec company responsible for permitting and providing the real estate. Zoeller said the other company makes contributions equal to the property value.