Businesses in Ventura Are Moving to Oxnard : Economy: Millions of tax dollars might be at stake as the larger but poorer city capitalizes on its neighbor’s slow-growth policies and water shortage.

The city of Oxnard is grabbing business from Ventura, its smaller but richer neighbor.

Call it friendly rivalry or bitter competition for tax money, Oxnard appears to have the economic momentum, many observers say.

They attribute this to Oxnard’s aggressive recruiting of business and Ventura’s slow-growth philosophy and water shortage.

Oxnard officials predict years of growth in business tax revenues. Ventura’s predictions sound far less optimistic.

In Oxnard, sales tax revenues went up by about $1.4 million in the fiscal year that ended in June.

“The fruits of long-term management are beginning to show now,” Mayor Nao Takasugi said.

Ventura City Manager John Baker, on the other hand, predicts in his budget proposal for 1990-1992 that revenue will “remain fairly stable.” He expresses “concern . . . for a slowing in business growth to be reflected in sales, utility and business taxes.”

The budget forecast a decline of $200,000 in sales taxes for the year that ended June 30.

The city actually had a $300,000 increase, but that was still less than one-fourth of Oxnard’s growth.

The picture isn’t completely one-sided. Ventura officials say sales taxes will rise next year. “We have several projects in the pipeline, so we don’t expect the economy to slow down yet,” Finance Director Terry Adelman said.

For years, Ventura has been considered the prime destination for businesses seeking a foothold in the Oxnard Plains. Sales tax figures for the past several years suggest it isn’t in danger of losing its place any time soon.

It collects nearly $3 million more than Oxnard, which is bigger, more ethnically diverse and less affluent. Ventura generated $14.3 million in sales taxes last year; Oxnard, $11.5 million.

But the picture could be changing. Oxnard’s spurt in tax revenue cut the gap from $3.8 million to $2.7 million. In the past six months, at least three big businesses have transferred all or part of their operations from Ventura to Oxnard. Another plans to do so in the next two weeks, and several are considering it.

A survey released last week by the Greater Ventura Chamber of Commerce found that at least 31 Ventura businesses--more than one out of 10 respondents--are either “seriously considering” or have knowledge of businesses that are seriously considering leaving the city because of the water shortage.

“If there’s a war going on between the two cities, we’ve lost it without firing a single shot,” said Jim Barroca, the chamber’s executive vice president.

Sue Chadwick, who chairs Oxnard’s Economic Development Advisory Commission, said the current political atmosphere and water shortage in Ventura provide Oxnard with a “window of opportunity” to lure businesses.

And Oxnard seems to be seizing the opportunity, although its officials claim not to be targeting Ventura. “Key accomplishments during the past year include the attraction of two auto dealers from the city of Ventura to the Oxnard Auto Center. . . ,” Chadwick wrote in the commission’s annual report.

“They have certainly approached our car dealers,” said Everett Millais, Ventura community development director. Car sales, he noted, are the biggest source of most cities’ sales tax revenues.

Competition among cities for sales tax money is fierce, Millais said.

Because Oxnard has had financial problems in recent years, “attracting businesses has become a survival game for them,” he said.

Ventura Mayor Richard Francis pointed out that Oxnard had to make cuts in several city departments to balance its budget this year.

“The public image of Oxnard and Ventura reflect their differences in style,” he said. “It’s my understanding that Oxnard has used tax money to attract businesses through incentives, and that’s why they’re broke.

“Ventura is more conservative. We’re not willing to gamble on our long-term future.”

In November, Ventura elected a slow-growth City Council that immediately sought to curb commercial and industrial development while raising the standards of what could be built.

In March, facing the worst water shortage in its history, it enacted a moratorium on water hookups for new businesses and residences.

That shut the door on practically any business looking to move to Ventura. It also made it all but impossible for established businesses to expand to different locations in the city.

“The council should be making decisions for the good of the city instead of burying its head in the sand,” said Bob Gregorchuck, president of Ventura’s Chamber of Commerce.

He said the moratorium was premature and a ploy by the council to control growth--a widely shared sentiment in Ventura’s business community.

Oxnard, which has plenty of water because it is part of the State Water Project, has positioned itself to make the most of its neighbor’s troubles.

Oxnard for years was considered a poor stepchild of Ventura, Oxnard Chamber of Commerce President George Lauterbach said.

Thanks to its recent efforts at “front-end promotion,” Lauterbach said, it is changing its unsophisticated image.

Oxnard’s mayor and city manager go out of their way to welcome new businesses, he said. “In Ventura, you get the cold shoulder.”

Dan Vreeland, who moved his Cadillac dealership to Oxnard from Ventura this year, said Ventura officials were polite and helpful when made aware of his expansion plans but were no match for Oxnard’s.

“No question about it, Oxnard is out to get businesses,” he said. “It pursues them and has land available. Ventura seems more interested in preserving its greenbelt, and that’s the city’s prerogative.”

Vreeland celebrated his Oxnard opening with a cocktail party May 31 featuring champagne, caviar and hula dancers. Everyone seemed to have a good time, but some of the 100 guests were from Ventura and were less than thrilled about the move.

“It’s a little awkward for us to be here,” Gregorchuck said, noting that the dealership represented $200,000 a year in sales tax money.

Vreeland said he decided to move because he needed to expand and in Ventura there was “limited space, the access was a little difficult, and the retail center here in Oxnard was a big enticement.”

When Oxnard’s city manager approached him with an offer to relocate, he said, he was ready.

Linda Gillis, Oxnard’s economic development officer, said that although it has lured some businesses away from the neighbors across the Santa Clara River, “we don’t make a concerted effort to steal from Ventura.”

Instead, she said, Oxnard has focused on creating the right business climate for out-of-town firms to move in.

Before 1987, the city gave financial incentives to incoming companies. Some businesses are still reaping the benefits. The most common enticement was a low-interest loan to buy property, through the development of a tax assessment district, Gillis said.

The city used such a technique in 1985 to develop the Oxnard Auto Mall, Gillis said. Auto dealers pay assessments for adjoining streets and sewers but are reimbursed by having sales taxes given back to them.

Such an incentive proved irresistible for Vreeland and Jack Weber, who in January moved his Weber Lincoln Mercury dealership, and $150,000 a year in sales taxes, from Ventura to Oxnard.

Weber said Ventura’s political climate provided a strong incentive to move. “It appears that Ventura has taken a turn for the worse because of the slow-growth mentality that prevails in the City Council,” he said.

By year’s end, Weber added, he will have moved his Jaguar dealership to Thousand Oaks, leaving only his Mazda dealership in Ventura. “This city was once the commercial center of the county,” he said of Ventura. “But it is becoming a bedroom community.”

Jim Schielke, general manager of Case Power & Equipment, moved his heavy equipment factory and its $50,000 annual sales tax share to Oxnard in January. Schielke said he wanted to stop leasing and buy property but what Ventura had to offer “didn’t interest me at all.”

Oxnard had “the ideal place,” Schielke said, referring to Case’s present location at Latigo and Rice avenues.

As for Ventura, Schielke said, “with their no-growth attitude, maybe they decided they don’t need heavy industries. Maybe all they want is high-tech or insurance-types. You know, clean-industry types.”

Hank Urbach, vice president of marketing for the TOLD Corp. in Oxnard, said its real estate branch plans to move from Ventura to Oxnard this month.

He said the office of about 15 full-time employees needed to expand and decided to move from its Telephone Road location to the Northcoast Executive Center in the 4.4-million-square-foot Oxnard Town Center--the largest commercial development in the county.

TOLD moved to Northcoast because it is destined to become “the most prestigious building in the county,” Urbach said.

Ventura has just begun trying to attract a signature office building. On Aug. 1, it tentatively approved a three-story, 85,864-square-foot office complex for the southeast corner of Johnson Drive and Capri Street. The council directed the city staff to impose certain conditions before a final vote.

SALES TAX REVENUES For the cities of Oxnard and Ventura.

OXNARD VENTURA 1985-86 $8,181,206 $10,551,674 1986-87 9,246,157 11,371,252 1987-88 9,482,909 12,464,718 1988-89 10,103,580 13.952,464 1989-90 11,500,000* 14,279,920 1990-91 12,250,000** 15,750,000**

* Estimate. ** projected. Sources: Cities of Oxnard and Ventura