City Council to Study Waiving $1.5 Million in K mart Fees : Business: Under the plan, Ventura would forgive the up-front charges in order to lure the super store and millions in sales tax revenue to the area. Mayor is not sold on idea.

Hoping to lure a Super K mart and millions in sales tax revenue, the Ventura City Council on Monday agreed to hire a consultant to study the impact of waiving $1.5 million in building fees.

Lundin Development of Huntington Beach, which is planning the new store on Victoria Avenue, requested that the city forgive the up-front fees typically levied against builders to cover the cost of increased traffic, air pollution and other expenses generated by a project.

Company officials agreed to pay for the analysis, which will take several weeks to complete and cost as much as $25,000. Without the fee waiver, the developer said, the project would be financially unworkable because of the high cost of purchasing the land.

Lundin and K mart executives last month asked the city’s economic opportunity and revitalization committee to consider waiving the fee. The panel of three council members forwarded the request to the City Council.

Mayor Tom Buford said he supports bringing in a financial specialist to review the K mart proposal. But he is not sold on the idea of waiving $1.5 million in fees.

“I’m not sure about fee waivers or fee reductions, but I don’t think there’s a philosophical objection to it,” Buford said before Monday’s meeting. “It’s more a matter of how this is put forward, what are the costs and what are the benefits.”

The new store would be built across the street from the existing K mart on 21 acres along Victoria Avenue. The project also would include several smaller shops and total more than 220,000 square feet of retail space.

In addition to typical department store merchandise, Super K marts also sell groceries and hard-line products such as refrigerators, washers and dryers, Ventura store assistant manager Roger Martinez said.

They are open 24 hours a day and are usually twice the size of a regular-sized store, Martinez said. “It’s a big operation.”

The existing K mart, which opened in the early 1970s, employs about 100 workers, Martinez said. The new store would employ 500 to 800 people, a K mart consultant told the council Monday night. The company hopes to open the new store within 18 months.

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The K mart development fee waiver would be the first in Ventura, although the city is now negotiating with owners of the Buenaventura Mall for a similar deal, city planner Ann Grant-McLaughlin said.

“It’s something that cities are having to look at because of the competitive market,” she said.

The financial consultant, who was not named but would be selected by City Manager Donna Landeros, will be asked to analyze ways the fees could be recovered from additional sales tax revenue.

Preliminary analyses project that the Super K mart would generate between $2 million and $2.8 million more in sales and in property taxes for the city over the first 10 years, K mart consultants said.

Without the development, the existing store would generate about $1.3 million in taxes over the same time period, K mart analysts said.

For the past two years, sales tax revenue in Ventura has remained steady at about $12.7 million annually, while its nearest competitor--Oxnard--has inched closer and closer.

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In 1990, Ventura earned more than $14.3 million in sales tax revenue.

One Thousand Oaks resident who closely follows county development issues complained that the fee waiver would end up costing taxpayers.

“If the city of Ventura allows itself to become a bank for the K mart corporation, the citizens of Ventura County are going to end up paying for it,” Marilyn Jansen said.

Councilman Gary Tuttle said it is ironic that local governments are being asked to waive the very fees intended to pay the city costs associated with major developments.

“We’ve taken the risk out of doing business,” Tuttle said. “Because they come in and say they won’t do it unless we protect their bottom line.”

Tuttle also said he is concerned about the design of the building, which Lundin has proposed at the east end of the parcel with parking out front.

“I would expect to see at least some elevation heights that keep the crest of the hill showing . . . so we have something other than parking between Victoria and K mart,” he said.

“For a million and a half in fee waivers, they should be very creative in looking at the project.”