Ventura Downtown Real Estate Booming

With rosy visions of bustling stores, ringing cash registers and busloads of tourists tumbling off tour buses, the city threw open its coffers two years ago and pumped $15 million into downtown redevelopment.

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

Now the payoff has arrived, as the biggest downtown projects--a 10-screen movie theater and a five-story parking structure--are rising 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 are rushing in and snapping up real estate. Property owners are renovating existing buildings. And new upscale restaurants are popping up on street corners from one end of downtown to the other.

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

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

“Landowners need to be patient and allow the pedestrian traffic to go up before they raise their rents,” said Councilman-elect Sandy Smith, who runs the Rosarito Beach Cafe downtown.

But city planners remain confident. They say this is only the first phase of investment. Ted Temple, the chairman of the planning commission, calls the effect synergistic.

“This is the first wave of private investment, and it is huge,” he said. “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.”

The promise of Ventura has been a long time coming. But in the last three years, the city has invested the capital to see that it 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 places.

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

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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 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, an interesting picture emerges--of a lively downtown filled with private homes, office space and many more retail stores.

There are three residential projects 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.

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

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.

“There’s been more private investment in the last three months than in the last three years,” said O’Neil. “Part of that has been sparked by the visibility of the redevelopment projects. The word’s 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 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 some other buildings.

The biggest gobbler of them all is Charles Logue--an investor who works out of Austin, Texas, and Santa Barbara. Logue has invested all over the country--Colorado to Texas to California.

Logue said he was checking out different towns along the California coast and he stumbled upon Ventura. He has 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.”

“This was really a double whammy,” said 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 see more than that when they look at Ventura.

They see one of Southern California’s last picturesque downtowns, located 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.’ ”

One thing that is incredible to outsiders is that rents and land prices in Ventura are still--relatively speaking--so cheap. That makes it a risk--but also a potential winner. As such it has attracted people willing to take a chance.

In Ventura, Logue noted, a person 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.”

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

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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 maintenance for plumbing and the outside of buildings.

One store owner, who asked not to be identified, has been locked in negotiations with her landlord for 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 that landlords are hoping for.

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

Georgino says he has filled four of the seven stores in the theater retail complex on the 500 block of Main Street.

But he rebuts the notion that it 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.”

Still, the rush to buy, to develop and to build 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 Pat Richardson, city redevelopment manager, doubts that will happen.

“Ventura will never become like a Santa Barbara,” he said. “It has an edge I don’t think it will lose.”