Beauchamp Seeking to Lease Harbor Village Area
Beauchamp Enterprises, named after the Orange County “credit dentist” whose aggressive ads helped pioneer installment-plan dentistry, is negotiating a $6.5-million to $8-million lease to operate most of Ventura Harbor’s beleaguered shopping village, a harbor official said this week.
The Ventura Port District is expected to consider the 50-year lease at its Jan. 18 meeting. Harbor officials predict that the proposal by Beauchamp, which has real estate holdings throughout Southern California, including two marinas at Ventura Harbor, will be greeted warmly because it would bring at least $350,000 in sorely needed wharf improvements.
A signed lease with Beauchamp would also stave off takeover attempts by another firm that has claimed legal title to Harbor Village, the cluster of 100 shops, restaurants and boating-related facilities that comprise the harbor’s tourist core. Harbor Village has been rudderless since its developer and operator, Ocean Services, went bankrupt in 1986, leaving behind $16.3 million in debts and a complicated legal web that has yet to unravel fully.
‘Measure of Relief’
The Beauchamp proposal “gives us some measure of relief,” said Richard Parsons, Ventura Harbor’s general manager. “Given the circumstances, I think it’s a fair deal for both parties.”
Phone calls Tuesday to the company’s offices in Newport Beach went unreturned.
But Parsons said terms tentatively call for Beauchamp to pay off $6.5 million in municipal-type bonds that went into default when Ocean Services declared bankruptcy. That prospect pleases harbor officials because the bonds, which funded construction of Harbor Village, held the port district conditionally liable should Ocean Services default.
Parsons said the deal would also bring long-term stability, planning and growth to Harbor Village. During the Ocean Services regime, many tenants found business less than booming because of too few tourists, spotty advertising and a management style that Parsons said “left a lot to be desired.”
Beauchamp is no stranger to Ventura Harbor. From 1978 to 1982, the firm built two marinas there with 560 slips that are now worth an estimated $15 million, Parsons said.
“We are quite comfortable with them. They have a good track record and have been a responsible operator here in the harbor,” he added.
The firm’s founder and patriarch, 74-year-old Dr. Robert F. Beauchamp, began building an empire in 1939 by aggressively advertising to lower-income and minority communities dental care that could be financed without interest.
He parlayed his early dental earnings into real estate and other investments, and today his closely held empire--run mainly by family members--is said to total $500 million in assets. In addition to dental clinics, his holdings include shopping centers, office buildings, apartment complexes and two other marinas--a 985-slip marina at Dana Point Harbor and a 611-slip marina in San Diego that has two eateries, boating businesses and a clothing shop.
While Ventura Harbor officials stress that they have not hammered out a final lease agreement, they also stress that they welcome Beauchamp.
Their alternative is CIB Development, a Huntington Beach firm that in July bought most of the outstanding harbor bonds and attempted, in a court action in December, to take possession of Harbor Village.
Ventura Superior Court Judge Edwin M. Osborne denied CIB’s request Dec. 15, but the firm is expected to seek further court action. The Beauchamp deal would resolve those takeover attempts by paying CIB the money it is owed on the harbor bonds.
Should CIB gain control of the harbor however, the port district might be forced to turn over all its revenues from leasing Harbor Village--an estimated $325,000 annually--until it pays off the harbor bond debt of $6.5 million, Parsons said.
There are other reasons that the port district has not raced into CIB’s embrace.
CIB’s president, Bobby S. Mehta, formerly headed a subsidiary of American Diversified Savings Bank, a Costa Mesa thrift that went belly-up in one of the biggest thrift failures in history.
American Diversified was seized by federal regulators in 1986 and liquidated in June, 1988, after it was unable to pay off $1.14 billion in deposits. Its founder, Ranbir S. Sahni, has been sued by the Federal Savings and Loan Insurance Corp., the federal agency that insures customer accounts, for alleged racketeering, fraud and mismanagement. Sahni has counter-sued.
In a separate action, the FSLIC has sued Sahni, Mehta and CIB over an allegedly fraudulent transfer of assets from American Diversified to CIB. Mehta could not be reached for comment Tuesday.
Mehta is a longtime aide to Sahni who married Sahni’s sister and was director of American Diversified in 1984, in addition to serving as president of one of its divisions, Sahni said in an interview Tuesday.
Sahni said he never has been involved with CIB except to do “some consulting.” However, federal savings and loan regulators believe that CIB is controlled by Sahni, said Joseph E. Thomas, a Costa Mesa attorney representing the FSLIC in its suit against Sahni, Mehta and CIB.
American Development Corp., another firm started by Sahni, shares a suite of offices with CIB in a Huntington Beach building.
While a CIB takeover would require Ventura Harbor to forgo profits into the next century, the harbor should begin generating profits again in 1990 under the Beauchamp deal, Parsons said.
Ventura Harbor earns some of its $2-million annual budget by leasing out Harbor Village, which it did under the Ocean Services agreement and would like to do with Beauchamp. The operator, in turn, subleases the shops and boat slips, runs the village and turns over to the port district a percentage of gross revenues that range from 1% to 20%, depending on the business.
The Beauchamp deal calls for the harbor to forgo any lease revenues for 1989 and to realize about $100,000 in 1990. That figure will rise each year until it reaches the sum the port district would have received based on its complicated percentage scale.
“I wouldn’t want to characterize the financial arrangement as something we’re thrilled with, but given the circumstances . . . we’re pleased to have the Beauchamps coming in,” Parsons said.