Sweating Out Change : Ojai: Plans to transform the Wheeler Hot Springs spa complex into a destination resort hinge on a stock offering and zoning approvals.

Wheeler Hot Springs, a historic spa and restaurant complex that has drawn generations of visitors to the hills north of Ojai for more than a century, may undergo a physical as well as financial transformation.

If all goes as planned, a group buying the Ventura County landmark will raise $3.3 million from a stock offering to the public, then create a destination resort with 72 new guest units, expanded hot-tub facilities, tennis courts and new banquet and meeting rooms. The idea is to attract corporate and academic groups as well as health-conscious vacationers, said Thomas L. Marshall, president of Wheeler Springs Resorts Inc., the pending owner.

Marshall’s plans include bottling and marketing the sparkling mineral water that comes out of the natural springs beneath the property located in an unincorporated area six miles outside Ojai on Maricopa Highway.

It’s a rustic, restful place, with a restaurant that by some accounts has been there since the spa opened in 1891. Even now, with only the restaurant and daytime spa in operation, the business is profitable, Marshall said, and he expects profits and revenues to rise appreciably if his plans go through.

However, two obstacles could thwart Marshall’s plans. There is no guarantee that he will raise the money he needs from a Wheeler stock sale, and there is no certainty that he will get the zoning approval he needs to expand the spa into a destination resort.

Indeed, scores of initial public stock offerings have failed to go through this year, including one for Packard Bell Electronics in Chatsworth, one of the nation’s largest personal computer makers.

Marshall says he has other sources of financing available to complete the purchase should the public offering fail.

If the stock deal goes ahead, the resort’s present owner, Evelyn Landucci, will end up with $1.5 million in cash, a trust deed for $1.5 million and 14% of the new company’s stock with a paper value of $1.8 million.

Marshall hopes to welcome his first overnight guests by early 1993--but he concedes that his plans could be held up by county planning officials and Ojai Valley’s ever-watchful environmentalists. “We’re hoping for the best, but we’re prepared for the worst,” he said. In the expanded Wheeler’s first year of operation, he predicted, the payroll will grow to 160 workers from the current 60.

Marshall, 58, expects to deliver a bundle of impact reports on traffic, drainage and water quality conditions to county planners within the next two weeks. He said the studies will show that the Wheeler project will be friendly to the environment.

But Pat Baggerly, a director of the countywide Environmental Coalition, scoffed at this. “I can’t believe all those people are going to stay cooped up in the resort on Friday night instead of wanting to drive into Ojai,” she said. Other environmentalists in the area said they have heard too little to comment on Marshall’s overall plans at this time.

To preserve the beauty of the 59-acre, wooded setting, Marshall said, the new guest units will be built in low-rise clusters and spread out so as not to disturb the area’s aesthetics.

Karl Pope, managing partner of the Ojai Valley Racquet Club, a 700-member tennis club, believes the market for an expanded Wheeler resort would be “terrific,” but adds that he has strong doubts that Marshall can get official approval for the project. “The county won’t let you create one more car trip through the main road into that area. I ought to know. I wanted to build some resort-type units on our club grounds, and I was turned down flat.”

Kelly Scoles, the project planner handling the Wheeler proposal for the Ventura County Planning Department, is skeptical that Marshall will receive a conditional use permit soon. “I wouldn’t be surprised if the process took a year,” Scoles said. She noted that a creek and wetlands run through the property, and that Marshall may be required to submit an environmental impact report. “The public will definitely have a chance to be heard before a permit is granted,” Scoles said.

As an indication of environmentalists’ clout in the area, a Japanese developer’s plans to build a golf course east of Ojai have been held up by their complaints about the project’s potential impact on the water supply, wildlife, vegetation and traffic.

As for the Wheeler stock sale, officials at Network 1 Financial Securities, a Red Bank, N.J., firm that is underwriting the offering, say the issue may reach the market in two months. Current plans call for the public to be offered 500,000 units at $8 each, with each unit to include two common shares and two warrants entitling the holder to acquire additional shares.

Marshall, who would own 30% of the company’s stock after the sale, said he worked in Wall Street as an investment banker and merger specialist in his youth. Later, he was a consultant to troubled hotels and says he was one of the first Americans to produce a film in Eastern Europe after the easing of relations between the West and the then-Soviet Union.

In the late 1960s, he was president of a fast-food restaurant chain, Broadway Joe’s, whose chairman was then-New York Jet quarterback Joe Namath. Marshall said he quit the company because he disagreed with the direction it was taking. The chain later folded.

Marshall said he became interested in buying Wheeler Hot Springs after first visiting the spa in 1988. “I fell in love with the place, and with the Ojai Valley in general. Every time I arrive here, I feel as if I’ve freed myself from the cares of the world.”

The spa’s owners, Evelyn and Frank Landucci, weren’t particularly interested in selling, and it took four years of negotiating before a deal was made. The sale is scheduled to close when the stock goes public. “Frank and I have a high regard for Tom and his plans,” Evelyn Landucci said. Her son, Lanning Kaufer, will remain as Wheeler’s general manager.

Ojai, a city of 7,400, is known as a home to old money, some well-to-do refugees from Hollywood and a group of expensive private schools. The city also boasts the Ojai Valley Inn & Country Club, where a golfing weekend for two can cost more than $700.

John A. V. Sharp, executive vice president and general manager of the inn, said there’s room for another destination resort in the area eventually, “but the recession has made it difficult for the hotel and resort business throughout the country. Things are fairly saturated everywhere.”

David M. Brudney, a resort industry consultant who has studied Ventura County extensively for leisure-industry clients, questioned whether the market exists for an overnight spa resort. “The great spas of the past were successful with older people, but that generation has pretty much died out,” he said. “Spas were never a young person’s market.”

But Robert Mescal, a new-issues analyst at the Institute for Econometric Research in Ft. Lauderdale, Fla., said he wouldn’t be surprised to see both the Wheeler stock underwriting and the resort’s expansion succeed--if Marshall can get zoning approval for his plans.