Real Estate Boom Sparks Feelings of Optimism, Apprehension

With rosy visions of bustling stores, ringing cash registers and busloads of tourists, the city threw open its coffers and pumped $15 million into downtown redevelopment.

Then city officials sat tight and hoped it would pay off.

Now, it is starting to--at an almost dizzying pace--as the biggest downtown projects, a 10-screen movie theater and the five-story parking structure, rise out of the earth.

In recent months, private investors have come forward with at least $25 million in proposed projects for the downtown, according to property records and city officials.

And since the beginning of the year, investors from in and out of town have been rushing in to snap up real estate. Property owners are renovating their buildings. And new upscale restaurants--Winchester’s, 71 Palm, and by spring, a Mediterranean style restaurant in the old Pierano grocery--are popping up from one end of downtown to the other.

Pat Richardson, city redevelopment manager, says he receives phone calls daily--usually anonymous--from developers and residents, inquiring about the state of Ventura’s downtown.

“I think the rush is on,” says Tim O’Neil, the president of the Downtown Ventura Assn.

Indeed, the speculation is so rampant, that some downtown merchants complain they are having trouble renegotiating their leases, while others caution that the boom may turn to bust if things keep moving at this pace.

“It’s important to get a strong foothold, and not jump the gun,” said Councilman-elect Sandy Smith, who runs the Rosarito Beach Cafe downtown. “Landowners need to be patient and allow the pedestrian traffic to go up before they raise their rents.”

But city planners remain confident, saying this is only the first phase of investment. Ted Temple, chairman of the Planning Commission, calls the effect synergistic.

“The city made a huge investment,” he said. “This is the first wave of private investment, and it is huge. That effect, in turn, is going to be huge. In the next five years, we are going to see an amazing transformation. It is going to be a mind blower. And things will just keep moving faster and faster.”

For as long as anyone can remember, people have been predicting that Ventura was about to take off.

But in the past three years, the city has invested the capital to see that it really happens. Officials put $4.5 million into the downtown core in an effort to give it a more festive feel--planting queen palms along California and Main streets, laying brick-inlay sidewalks, and putting in diagonal parking.

Last year the city agreed to make an even larger commitment: build a $4-million, five-story parking garage and put $6.5 million toward a 10-screen movie theater and retail complex that a developer is building on Main Street.

To finance the projects, the City Council used redevelopment money, which is expected to be repaid through increased tax revenues in the downtown corridor.

For that to work, though, downtown’s tax base and the investments there have to grow. That, city officials and property owners say, is happening right now.

First it was just a building or project here and there. Then another and another. Now, as momentum picks up, vacant spots downtown are filling in like a jigsaw puzzle falling into place.

With a little imagination, and a map, a picture emerges of a lively downtown filled with residential homes, office space and many more retail stores.

Already there are three residential projects either proposed or underway, scattered from the west end of downtown to a vacant plot across from Cemetery Park.

In some cases, the city cannot work fast enough to put together land for developers eager to build on city-owned property.

Westlake-based Cottage Builders, for instance, is hungrily eyeing property on the west end of town near Patagonia Inc., hoping to build 22 Victorian-style town homes. The developer specializes in urban in-fill housing--homes that squeeze onto smaller plots of downtown land wedged between existing development. The firm has a project going in Colton and a proposal with the redevelopment agency in Riverside.

“We like what is happening in downtown Ventura,” said Rod MacDonald of Cottage Builders. “So we cold called [the city]. We said, ‘You have the land. Let’s do something.’ ”

City officials are holding off on the proposal, saying they want to try to assemble a larger parcel. MacDonald and his partner Robert Goetsch are waiting--impatiently.

Redevelopment manager Richardson added that several big-time developers--from in and out of town--are lining up to make proposals for prime downtown parcels off Santa Clara Street owned by the Ventura Unified School District. What’s more, there are two proposals to build new offices downtown.

Meanwhile, investors are buying up property downtown--some in concert with the city, some independently--to upgrade and renovate existing buildings. But real estate agents say the best way to measure where a market is going is to look at how much real estate is changing hands.

And by that measure, Ventura is hopping, with at least two dozen parcels sold in the past two years, property records show.

“There’s been more private investment in the last three months than in the last three years,” said Downtown Ventura Assn.’s O’Neil. “Part of that has been sparked by the visibility of the redevelopment projects. The word has gotten out to the north and south of us.”

Jeff Becker, a commercial real estate broker in Ventura for the Becker Group, said calls inquiring about downtown used to be a monthly occurrence. Now they are daily.

“No question about it, things are heating up,” Becker said. “It’s been a gradual thing that started 15 years ago. But now you are finally starting to see the physical things. That gets people interested.”

Becker himself has become an active investor in the downtown, along with two partners. Together they have bought the Bard Hospital on Poli and Fir streets, and the leather shop on the corner of Oak and Main. They are looking at other buildings.

Added Robert Noe, who started buying property downtown three years ago: “It’s been a diamond in the rough for a long time. Now people are starting to gobble it up.”

The biggest gobbler of them all appears to be Charles Logue--an investor who works out of Austin, Texas, and Santa Barbara. Logue has invested from Colorado to Texas to California.

He said he was checking out towns along the California coast and stumbled upon Ventura. He has already bought three buildings downtown and is in negotiations on six others.

“The classic way to make money is to buy property in an area on the increase,” Logue said. “The parking structure is a positive. And so is the movie theater. Both will capitalize on the beautiful assets already in place in Ventura--the views, the ocean, the clean air. That is very good.”

City officials, investors and real estate brokers cite a variety of factors for the surge in investment.

Richardson said the city’s multimillion-dollar commitment to revitalizing the downtown tells private investors the city is serious, and encourages them to take chances.

Other officials emphasize the timing could not have been better. Construction began on the two biggest downtown projects just as the national economy got stronger, and the California economy is bouncing back.

“This was really a double whammy,” observed Bill Hatcher, project manager for the theater and parking projects downtown.”The projects started coming on board just as the economy was picking up.”

But the investors--many of them from out of town--see more than that when they look at Ventura.

They see one of Southern California’s last, most picturesque downtowns, within walking distance of the ocean. They see a county with oodles of expendable income, and not enough places to spend it. And they see a lot of property, at prices that are still cheap by Southern California standards.

“It’s the people outside Ventura who have the vision,” said one city official, who asked not to be identified. “This is an old town. People here can be parochial. It’s the people from outside who look at Ventura and say, ‘This is incredible.’ ”

Noe calls himself a “renegade investor” looking for good deals in “emerging markets.” Logue said he is here because Ventura is a city on the upswing.

“We had the view, we could go to some vanilla place, and find some tried and true place to stick our money,” Noe explained. “But the character of this area seemed more unique and desirable . . . there is no real parallel or equal where you can walk to the beach, with such a grand setting. You can’t even really walk to the beach in Santa Barbara.”

In Ventura, Logue noted, one can buy property for substantially less than it would cost to build it. He said he was also drawn to the city by the “Ventura power structure’s desire to see the city reach its potential.”

“What is transpiring will go a long way toward closing the gap between Ventura and Santa Barbara,” he said.

But the flood of new investment has sparked fears among some downtown merchants that the speculation could die out before it really takes off, and they could be the casualties.

Many shop owners say their landlords are reluctant to renegotiate leases, and when they do, they are raising rents three to five times. On top of that, some merchants say, landlords are asking them to assume increased responsibility for their buildings--tacking on additional costs for things such as plumbing, and the outside maintenance of buildings.

One store owner, who asked not to be identified, said her landlord has refused to renew her lease.

Another who is still locked in negotiations with her landlord said she has been struggling to strike a deal with her landlord for the past 19 months.

“Because of the projects in the works, a lot of the landlords are adopting a wait-and-see attitude,” she said.

But she cautioned that Ventura may never draw the crowds landlords are hoping for.

“Landlords are talking figures that are so high--I don’t care if the theater is full every night, they would be rapid turnover even in Santa Barbara,” she said.

She added: “I don’t know if we are going to be able to survive until that happens.”

Merchants point to the fact that Victor K. Georgino has not yet filled all the retail space in the theater complex as evidence that things are not as rosy as they seem.

Georgino says he has tenants for four of the seven stores that will fill the theater-retail complex on the 500 block of Main Street. They are Ben and Jerry’s, Kelley’s Coffee and Fudge, Juice Snack and Leatherbound.

But he rejects the notion that that is a problem.

“As a developer, of course I would like to have everything pre-leased,” he said. “But I’m optimistic that everything will be leased in the next three to four months.”

Georgino added that any time a city undergoes a dramatic transformation, speculation is a concern. But he does not think that will be a problem in Ventura.

“Given the number of people in Ventura, and the number of people in surrounding communities like Ojai that would come to Ventura, I don’t think that is a cause for concern,” he said. “I think this is a planned progression of growth that will take place without any problems.”

Finally, the rush to buy and to develop has sparked fears among some locals that Ventura will become another bland downtown, with rents so high only national chain stores can afford to be there.

But redevelopment manager Richardson doubts that will ever happen.

“Ventura will never become like a Santa Barbara,” he said. “It will always have its Rendezvous Rooms and Star Lounges. It has an edge I don’t think it will lose.”

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Downtown Revitalization

With a movie theater and parking garage already under construction, Ventura’s downtown is starting to lure more investment and building proposals.

1) Southeast corner of Oak and Poli streets. Developers have proposed 30 two-bedroom apartments, 6 penthouse apartments, 12,200 square feet of office space and underground parking for 98 vehicles.

2) 123 Ventura Ave.. The city has approved 14 units of senior housing, to be built by the county’s housing authority.

3) San Buenaventura Mission. The church has begun an expansion of Holy Cross School with an additional 40,000 square feet of educational space and an acoustically designed multipurpose auditorium.

4) Pierano’ Grocery, across from the San Buenaventura Mission on Main Street: A developer has proposed renovating the historic building to become a Mediterranean style restaurant with outdoor seating next to the fountain at Figueroa Plaza.

5) Northwest corner of Figueroa Street and Thompson Blvd. Developers have proposed a 10,000 to 15,000 square foot Victorian style office building. The city is currently in an exclusive negotiating agreement with Ventura-based F & A Realty Advisors Inc. to do the project.

6) Northeast corner of Santa Clara and Chestnut streets. A developer is proposing the renovation of the “Old City Hall” into a 20,000 square foot Mission-style office building with two floors, exposed wooden beams and a Moorish tower.

7) 500-block of Main Street. The city’s redevelopment agency and a developer are building a 10-screen movie theater and retail complex with space for seven stores set to open in June .

8) Northeast corner of Santa Clara and California streets. The city is building a five-story, 500-space parking garage set to open in the spring.

9) The corner of Santa Clara and Olive streets, and Thompson Boulevard and Garden streets. The Westlake-base Cottage Builders are hoping to build 22 Victorian or craftsman style town homes on these plots.

10) 1256 E. Main Street (not shown). Villa du Soleil, a 12-unit apartment complex with a semi-subterranean parking garage is proposed for this lot across from Cemetery Park.