Applicability of § 854 to the LandSource and Interim Agreements

We will first address the applicability of § 854 to the LandSource and interim agreements. Pursuant to § 854, Commission authorization is required for any entity to "control either directly or indirectly any public utility." As further explained by the applicants, the merger of LandSource into NWHL Investment and subsequent name change did not effect a change of control because NWHL Investments, albeit with a new name, retained its indirect control over Valencia. Similarly, no change of control occurred when the interim agreement

temporarily transferred control of LNR's interest in Valencia to Lennar. In
D.04-01-051, the Commission granted LNR and Lennar such authority, and did not restrict the ownership ratios. Accordingly, Lennar is authorized to control Valencia as required by § 854. We conclude, based on these unique facts, that § 854 did not apply to the interim agreement.