Oxnard, Camarillo Officials Say Mall Finance Report Misleading

A city report that praises the Buenaventura Mall expansion deal by criticizing three other Ventura County cities was characterized Monday as misleading by Oxnard and Camarillo officials.

Prepared by an outside consultant for $14,500, the report concluded that Ventura’s plan to share tax revenue with a developer to pay for the $50-million mall expansion is “low risk” compared to “at-risk” incentives used by Oxnard, Camarillo and Thousand Oaks in building certain retail centers. The report was prepared for the Ventura City Council.

“The way they portrayed the Shopping at the Rose is, in my opinion, extremely misleading,” said Steve Kinney, executive director of the Oxnard Economic Development Corp.

Camarillo City Manager William Little said the way the report described the Camarillo Outlet Mall deal was “absolutely erroneous.”

Ventura’s arrangement calls for the city to use an anticipated jump in sales tax revenue to repay the mall developer for $12.6 million in road and parking improvements. With interest, the rebate will total $32.3 million.

A citizens group funded in part by owners of the rival Esplanade mall in Oxnard has placed an initiative on the March 26 ballot that would forbid such arrangements in the future, and is working to qualify a referendum to overturn the mall deal.

“There is a question in some minds that the city may be giving away [money] it doesn’t have to,” said Thousand Oaks resident Jere Robings, one of the leaders of the Citizens Against the Sales Tax Giveaway.

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But Ventura officials have maintained that the deal was necessary to keep the Buenaventura Mall in town. Other cities are giving away much more to lure retail centers, said Steve Chase, assistant to the Ventura city manager.

“The city of Ventura did not create this game,” Chase said. “If you have to play the game, this is as good a deal as we have seen.”

The consultant’s report pointed out that Oxnard rebated $1 million in sales tax revenue and deferred an additional $1.4 million in fees to woo developers to build the Shopping at the Rose retail center.

What upset Kinney is the report’s claim that Oxnard also waived $2.1 million in building fees.

“We didn’t waive anything,” he said. Instead, Kinney said, the $2.1 million in fees were exchanged for sewer and road improvements made by the developers.

The Ventura deal calls for developers to reap 85% of any sales taxes generated by the mall beyond the $1.1 million that would normally flow into city coffers. The deal concludes once the developer is reimbursed for the $12.6-million investment, plus interest.

Chase said the structure of that deal leaves Ventura with little risk of losing money.

He said other cities have agreed to float bonds to expand city services, such as sewer and water lines, while using their good credit to help developers secure financing to build retail outlets.

If, for whatever reasons, those developments failed, the cities would still have to make the bond payments, and their credit ratings could suffer. Not so in Ventura, Chase said.

“If the development doesn’t perform, then there is no payment,” he said. “There is no risk. There is no pledge.”

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That may be, but officials in Oxnard and Camarillo--Thousand Oaks officials could not be reached for comment--took exception to the study calling their developments risky.

“We don’t have any deal” with the Camarillo Outlet Mall, Camarillo City Manager William Little said. “We don’t share any sales tax or anything else.”

Further, Little said the $14 million in bonds his city took out to expand sewer service in the west side was not done at the behest of the outlet mall. Even if the outlet mall failed, Little said, the sewer expansion had to be done.

“We needed to provide sewers to the west side of the city,” Little said. “It had nothing to do with the outlet mall.”

In fact, Little said, the Camarillo City Council was prepared to offer the outlet developers a sales tax rebate until a lawsuit forced the offer from the table. The developers decided to go ahead with the project anyway, and Camarillo now gets all the sales tax it is due, he said.

“Things worked out for us,” Little said. “But had the thing fallen through, we probably would be moaning about letting one slip away.”

Little said he has not researched the Ventura deal but conceded that today’s economic climate compels cities to deal with developers “on a case-by-case basis.”

Robings dismissed the report as nothing more than a “public relations tool” designed to sell a bad idea to residents.

“I have heard all of those arguments in the past,” he said. “But I’m still concerned that the city has moved ahead with a tax giveaway without voter approval.”