Oxnard May Give Mall a Tax Break

The city plans to give The Esplanade mall a $3.7-million tax break in exchange for a more upscale facility, a deal that is drawing criticism from some residents and city officials.

“I have some reservations about subsidies to developers,” Councilman Dean Maulhardt said. “I’m still looking at it, but I’m very cautious. They’ve got to sell me that this is a good idea.”

The City Council decided Tuesday to postpone a vote on the agreement until details could be completed. The plan would rebate developer M & H Realty Partners’ property tax payments and pay for other assessments over 20 years.

In return for the breaks, Oxnard residents would benefit by being able to shop at an upscale mall that includes such stores as Nordstrom Rack, Borders Books & Music, Old Navy, and Bed Bath & Beyond. M & H will make renovations to improve traffic flow, landscaping and the overall appearance look of The Esplanade, said Curtis Cannon, the city’s community development and special projects director.

“We have an upscale, first-class center,” Cannon said. “Everything was an upgrade from what was required.”

M & H asked for the tax breaks last year, before the company had finished purchasing the properties, Cannon said. The city agreed to draft a proposal helping the company if the stores lured to the center met certain criteria, he said.

“It’s a great location, but it was not a great center when they bought it,” Cannon said. “This has been in negotiations since November.”

The city required the three parcels that made up the old Esplanade mall to be developed together, he said, and include a common parking lot and entrances. Also, M & H agreed not to seek secondhand-merchandise stores or stores that sell items with an average price of less than $5, Cannon said.

But Maulhardt said tax breaks should not be used as an incentive to build a decent facility.

“I would hope that they would make one of the nicest places regardless of any subsidy,” he said.

Other cities offer tax breaks to developers to lure shopping centers that will return millions of dollars in sales taxes to city treasuries. Oxnard must do the same to stay competitive, Mayor Manuel Lopez said.

Oxnard estimates that The Esplanade will bring the city $42 million in sales taxes during the next 20 years, Cannon said.

The breaks being considered by Oxnard are modest compared with other recent tax deals.

Ventura is paying the Pacific View Mall an estimated $32.3 million over 20 years in exchange for $12.6 million in road improvements and construction.

Oxnard previously rebated $1 million in sales tax revenue and deferred $1.4 million in fees as an incentive for developers to build the Shopping at the Rose center.

On that project, the city also exchanged $2.1 million in building fees for road and sewer improvements. Camarillo had planned to offer its successful outlet mall a sales tax rebate, but a lawsuit killed the plan.

And in 1995 Moorpark offered Special Devices Inc. $3 million in tax breaks and other incentives as well as sponsorship of a $10-million bond to relocate the company from Newhall.

Cannon believes the city’s offer of tax breaks helped make The Esplanade classier.

“This project has evolved because of our participation,” he said.

The center will be about 500,000 square feet and is scheduled to open next year.

The $3.7-million tax break includes an estimated $1.15 million that M & H otherwise would have had to pay toward improvements of the Ventura Freeway/Oxnard Boulevard interchange project, Cannon said.

Big developers do not need assistance from taxpayers, said Gilbert Beezley, a real estate broker who has been involved in local development issues for decades.

“The business community should try to finance themselves,” Beezley said. “Corporate America just wants to be subsidized by the federal, state and local governments.”