Buenaventura Mall Losing Tenants as Suits Tie Up Expansion Plan

Discouraged by lackluster sales and a flurry of lawsuits that have halted expansion plans, a growing number of businesses are now vacating the aging Buenaventura Mall.

Three stores moved out in April. Two other shops plan to shut down at the end of the month, and business owners say other stores are close to walking away as a result of a bitter sales tax war between Oxnard and Ventura.

“We fought hard for the Buenaventura Mall expansion,” said Mark Ramsey, who plans to relocate his candle shop to east Ventura. “To see it in its decayed state, we just couldn’t stand it.”

In a year when city revenue is dismally flat, the exodus could result in a sharp decline in sales tax dollars--money that helps pay for a wide range of city services.

“We are looking right now very seriously not only at the quarterly sales tax returns but what the impacts could be for the year,” said Steve Chase, an assistant to the city manager who helped negotiate the $50-million mall expansion.

Last year, mall sales generated $911,000 in sales tax revenue, nearly a third of which came from smaller retail stores that are spread out between The Broadway and J.C. Penney, the mall’s two department stores.

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Although the mall typically generates $1.1 million in annual sales tax revenue, competition from retail outlet malls in Oxnard and Camarillo has chipped away at Ventura’s sales base, city officials and store owners said.

In fact, city officials lowered their estimates for future sales tax revenue last month by about $500,000 after seeing flat returns in the second quarter of the current fiscal year.

A regional sales tax analysis showed that Ventura received a mere 1% increase compared to the second quarter of last year, but Camarillo received a 40% increase in sales tax revenue.

And with businesses fleeing one of Ventura’s leading revenue producers, the economic effects for the city could be devastating, officials said.

“When the city’s expenses are going up, and our revenues are flat or going down,” Councilman Jim Friedman said, “that is a recipe for a financial disaster sometime in the future.”

The occupancy rate for non-anchor stores in the Buenaventura Mall has dropped from 84% to 75% in the last five years, mall manager K. Cayse Osterlund said.

By comparison, the occupancy rate at The Esplanade mall in Oxnard has stayed steady at about 83%, officials said.

“We are pretty much even with where we were at this time last year,” mall manager Donna Farrell said.

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Leases for many of the shops in the Buenaventura Mall expired at the end of last year, and new long-term leases are not being offered because of the pending renovation plans, Osterlund said.

Some business owners say they are leary of staying in the mall on month-to-month leases, particularly with the renovation plans on hold.

“It is difficult right now to be doing any long-term deals because of the uncertainty of where we are going and the timing of the renovations,” Osterlund said. “A lot of these people said, ‘We’d be happy to come back once this is all resolved.’ ”

To reinvigorate the Buenaventura Mall, the Ventura City Council approved a $50-million improvement project this year that would add a second level of shops and two new department stores, Sears and Robinsons-May.

The anchor stores have agreed to leave The Esplanade mall in Oxnard for the renovated Ventura mall.

But Oxnard officials say the move would hurt their local economy and create blight around The Esplanade mall.

Oxnard city attorneys have filed two lawsuits challenging the expansion plans. Ventura city attorneys responded with a third. And last month an Esplanade-backed political committee opposed to a financing plan at the heart of the project filed a fourth lawsuit.

A June hearing has been set for the fourth case, but the other three lawsuits have yet to come before a judge because of a continuing dispute between Oxnard and Ventura city attorneys over a juror.

Representatives for the Buenaventura Mall’s Chicago-based owners said they are confident the vacant space will be filled once the lawsuits are resolved and the renovations are underway.

“Once we get through the legal haggling, I think we will see a recommitment,” said David Jones, president of La Salle Partners. “We are confident that this is only temporary.”

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But business owners are less optimistic.

Some say they waited patiently for the long-promised improvements, but given the risks have decided to relocate or shut down entirely.

“We are not big enough,” said Mary Bullis, owner of Small World, a children’s clothing store. “We are a small guy.”

Small World has occupied a corner space in the mall for 13 years. But foot traffic is so low, Bullis said, that she decided to close the doors of her shop once and for all.

A few steps from Small World, Ramsey has owned and operated Gifted Candle for more than a decade. But after his lease expired, he and his wife, Deborah, decided to relocate.

“We decided to brighten our horizons and go to Northbank Plaza off Johnson Drive,” Ramsey said.

City officials see one clear answer to the problem.

They must prevail in the lawsuits with Oxnard, and try to move the cases through the courts as quickly as possible, they said, or risk loosing sales tax revenue.

“This is a very, very serious set of conditions their actions have placed our community in,” Chase said. “We didn’t sue ourselves.”