Beauchamp Balks at $10-Million Price, Halts Plans to Lease Ventura Harbor Complex

Orange County “credit dentist” Dr. Robert F. Beauchamp has halted plans to lease most of Ventura Harbor’s financially troubled retail area, saying the price is too high.

Bank of America, the village’s largest creditor, said the 100-business Ventura Harbor Village owes $10 million, which must be paid before another operator can take over. Beauchamp Enterprises and the Ventura Port District have estimated the village’s debt at $6.5 million to $8 million.

“It’s very discouraging and disappointing,” Ventura Harbor Manager Richard Parsons said. “While we are getting calls from other interested parties, no one wants to pay $10 million.”

Beauchamp Enterprises, a real estate investment firm founded by Beauchamp, said in a letter sent last week to the port district that it would reconsider if Bank of America lowered its demands. Beauchamp Enterprises already operates two commercial marinas with 560 slips at Ventura Harbor.

Westrec, a subsidiary of Public Storage Inc. in Glendale, has also expressed interest in operating Harbor Village. A spokesman said that although $10 million is too much, the firm is studying how much it could afford. Public Storage has assets of $3 billion and owns 19 marinas in the United States, including facilities in Sacramento and Georgia.

For now, Ventura Harbor remains mired in a complex legal quagmire that must be unraveled to the satisfaction of almost a dozen parties before a new operator can take over.

Meanwhile, Bank of America has sued the port district in Ventura Superior Court for breach of contract. It has also started foreclosure proceedings to take over Ventura Harbor Village, a cluster of shops, restaurants and boating-related facilities that make up the tourist core of Ventura Harbor.

Bank of America is the trustee for about $5.5 million in outstanding municipal-type bonds that were issued by Ventura Harbor on behalf of Ocean Services Inc. to finance construction of the village.

The bonds held the port district conditionally liable should Ocean Services default. Because Ocean Services did just that by filing for bankruptcy in 1987, the bank claims in its lawsuit that it gained legal right to take possession of the property.

The suit claims that uncollected lease payments, plus interest, have raised the debt to $10 million.

Port officials plan to challenge those figures in court, Parsons said.

In addition, the port district would prefer to turn over operations of the harbor to Beauchamp Enterprises or Westrec to keep harbor businesses beyond the grasp of CIB Development, another Orange County firm that has laid claim to the property.

After Ocean Services filed for bankruptcy, Huntington Beach-based CIB bought most of the outstanding bonds and has several times attempted to claim legal title to Ventura Harbor Village.

So far, harbor officials have thwarted the move in court.

CIB has links to former savings and loan executive Ranbir S. Sahni, who operated American Diversified Savings Bank, a Costa Mesa thrift that was seized and liquidated by regulators in 1988. That move resulted in a $1.1-billion refund to depositors--the largest payout ever by the Federal Savings and Loan Insurance Corp.

Bobby S. Mehta, CIB’s president, is Sahni’s brother-in-law and a longtime Sahni aide who once headed a division of American Diversified and served as one of its directors.

Federal savings and loan regulators think that CIB is controlled by Sahni, according to Joseph E. Thomas, a Costa Mesa attorney representing the FSLIC in a lawsuit against Sahni and CIB.

Sahni and Mehta have both denied this.

In a brief interview, Mehta said the ownership of CIB was irrelevant. “CIB was an innocent victim who bought the bonds in efforts to get a good return on their money and is trying to recover its investment and a reasonable rate of interest,” he said.

Despite the legal and financial mess, CIB, Beauchamp, Westrec and a number of other firms see Ventura Harbor as a potential cash cow once its debt is resolved.

“Marinas are a unique investment opportunity in that it’s difficult to make any more of them, and boat sales and boating activity are growing at a rate . . . that’s difficult to keep up with,” said Wayne Hughes Jr., a vice president of site acquisitions for Public Storage.

Ventura Harbor earns some of its $2-million annual budget by leasing Harbor Village. The operator, in turn, subleases the shops and boat slips, runs the village and turns over to the port district a percentage of gross revenue that ranges from 1% to 20%, depending on the business.

Should CIB gain control of the harbor, the port district might be forced to turn over all its revenue from leasing Harbor Village--an estimated $325,000 annually--until it pays off the harbor bond debt, Parsons said. Another operator would have to agree to pay off that debt to obtain a lease.

The Orange County dentist who founded Beauchamp Enterprises is known for aggressively advertising credit-financed dental care targeted at lower-income and minority communities.

Beauchamp parlayed his early dental earnings into real estate and other investments. Today, his closely held empire is said to total $500 million in assets. Besides dental clinics, his holdings include shopping centers, office buildings, apartment complexes and four marinas--the two at Ventura Harbor, one at Dana Point Harbor and one in San Diego.