VENTURA : Harbor District Budget Approved
Faced with unresolved litigation that could cost more than $7 million, the Ventura Port District has approved a preliminary budget that maintains current harbor operations but adds no new improvements.
Port District General Manager Richard Parsons said the preliminary $2.7-million budget approved Wednesday represents a “relatively stable financial foundation.” Parsons, however, said the future is clouded by multimillion-dollar litigation involving a long-standing dispute with the Bank of America over Ventura Harbor Village.
The district expects that settling the lawsuit will restrict its spending, Parsons said.
“It’s a very trying condition to deal with, but we’re trying to make the best of it,” Parsons said. “We’re going to continue to provide the services to the public that are expected, but there’s probably going to be some tight years in the future.”
The complex legal tangle stems from the 1987 bankruptcy of Ocean Services Properties, the company that built the Ventura Harbor Village in 1981-1983. Ocean Services financed the construction through certificates of participation sold in the Port District’s name.
The certificates were originally purchased by individuals, pension funds, mutual funds and investment groups. When Ocean Services went bankrupt, investors filed claims against the property. Bank of America is serving as trustee for many of the investors.
At issue is how much those investors are owed. When the certificates went into default in 1987, $6.5 million was outstanding. Bank of America contends that subsequent interest accrued, entitling investors to substantially more.
Bank of America initially demanded $12 million, with the Port District offering $7 million. Ventura Superior Court has encouraged both sides to work toward a $9.2-million compromise.
The litigation involves about two-thirds of Ventura Harbor Village, including an ice plant, boatyards, a fish-receiving facility and half of the 100,000-square-foot retail village of shops and restaurants. About 200 boat slips--most of the harbor’s commercial slips--are also involved.
The district, which owns the land around the harbor, is acting as both landlord and lessee of the property.
District commissioners discussed the litigation involving Bank of America at a closed session Wednesday night. They refused, however, to say whether the two groups were any closer to a resolution.
The case is scheduled to be heard in Ventura County Superior Court on May 29.
The final budget will be presented to commissioners for approval on June 20.