Super K Developers Urge City to Waive $1.5 Million in Fees : Ventura: Proposal for new Kmart would seek part of the site’s sales-tax revenue as credit toward development charges. Doubts are voiced.

Developers itching to build a super-sized Kmart on Victoria Avenue implored a Ventura City Council committee Wednesday to dismiss $1.5 million in development fees, saying if the city won’t, they might leave town.

Ventura has already seen its rival neighbor Oxnard snare Price Club and lure Wal-Mart to Rose Avenue. Ventura council members acknowledge that they are under pressure to not let another sales-tax cash cow slip away.

“I think the city needs to look at protecting its base and adding to its sales-tax revenue,” said Councilman Gregory L. Carson, who attended the meeting of the economics committee along with Councilman Gary Tuttle.

The two councilmen said they were interested but wary of the proposal. “Apparently, everybody who comes forward with a major development is looking for the city to guarantee their profit,” Tuttle said. “I think that’s a little scary. The government has sort of taken away the risk factor for big business.”

The proposed 220,000-square-foot complex would take up a vacant lot commonly called “the Mound,” across Victoria Avenue from an existing Kmart that employs about 100 people. The new complex would include a 170,000-square-foot Super K store, plus two smaller buildings housing other types of retailers.

The Super K would employ 800 full- and part-time employees. It would stay open 24 hours a day, seven days a week, selling discount groceries as well as marked-down general merchandise.

Under the city’s fee guidelines, the site’s developers would pay $1.5 million for traffic and air quality mitigation, and other charges levied as conditions of construction. The fees are particularly high on the property because they would help pay to revamp the congested Victoria Avenue-Ventura Freeway interchange.

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California’s cities, their coffers decimated by state budget cuts and the property-tax-slashing Proposition 13, are increasingly desperate for new sources of sales-tax revenue. Retail giants like Kmart have found that the promise of their presence is often enough to spur eager city officials to sign away considerable sums of fees.

Oxnard, for example, agreed to similar deals in recent years to attract Wal-Mart and the county’s first retail outlet center.

The consulting company that helped structure Oxnard’s deals came to the Ventura council’s economics committee Tuesday with a new, complicated plan for the “Super K” store development.

Instead of Lundin Development paying the fees up front, the company would issue the city a promissory note, at 7% annual interest, due and payable within 25 years, consultant Allan Kotin said.

Quite possibly, however, the developer would never directly pay a cent of that debt. Instead, a percentage of the sales-tax revenue generated by the new shopping center--money the city would receive anyway--would be applied as credit toward the note.

“Wait a minute,” Carson said at the meeting, shaking his head, as Kotin explained all this. “We’re paying interest on our own money?”

To which Kotin responded, “But for this (expanded) Kmart, this is money you would not have.”

Tuttle warned Kotin that he, for one, would oppose such a plan.

“The good news for you guys is I don’t represent the majority of the council, so you may not have to listen to all I say,” he said. “But I am going to play devil’s advocate on this the whole way.”

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Indeed, Carson, Mayor Tom Buford and Councilman Jim Monahan said later in the day that they would be open to forging some kind of compromise.

“This is what most cities are doing and this is what we’ve never done before,” Monahan said. “We’ve had this nose-in-the-air attitude, and that’s why (retailers) are going to Oxnard.”