Storm Warning? : Business Up at Harbor Village but Debt Looms

VENTURA â€”  They come in droves every weekend. Sun seekers in shorts and tennis shoes who poke their heads in quaint shops and drop their money into the hungry cash registers of seaside eateries.

Strolling along the crowded, wood-planked walkways of Ventura Harbor Village, one would never know the troubles the little tourist spot has seen.

Four years ago, the beachside shopping center was mired in lawsuits. Its bankrupt developer sued the Ventura Port District for breach of contract. Angry merchants sued the district and management companies for failing to advertise and build tourist attractions that had been promised by the developer.

The port district later went belly up after losing the first lawsuit, becoming the only public agency in Ventura County history ever to file for bankruptcy. The district is still fighting a 1990 court judgment requiring it to pay $15.6 million to the developers.

Port district officials estimate that with interest, the payment is closer to $20 million--money that officials say they simply do not have.

Through it all, a handful of Ventura Harbor Village merchants held onto their businesses like sailors grasping a mast in a storm. But finally, a profitable calm has emerged.

New businesses have snatched up vacant retail spaces, reducing a 15% vacancy rate two years ago to just 5% today. Longtime mom-and-pop stores, such as the ice cream parlor and the kite shop, now operate next to snazzy new merchants, including a pricey art gallery and a wine tasting room.

Weekend tourists now clog the roughly 50 shops and restaurants that surround the harbor’s 1,800 boat slips, and their money has become as constant as the tides.

“The harbor village is stronger than ever,� said Richard Parsons, general manager of the port district, which is now the center’s landlord. “It’s been a slow process.�

Ventura Bikini Shop manager Laura Faupel said she has noticed the change since she started working there three years ago. “The shops are much more full than they were when I started working here,� she said. “We hardly had to advertise this year.�

Property manager Oscar Pena credits the upturn to an aggressive advertising campaign by the village’s marketing office, and an improved relationship between management and tenants.

“I think part of the problem years ago was the uncertainty of what would happen with the Ventura Harbor Village,� Pena said. But now, he said, “I think there is generally an optimistic outlook.�

It used to be that distant banks owned the village buildings, Pena said. Merchants said the previous owners cared little for the property or its lessees.

“It was like talking to a wall,� said Steve Gates, owner of Spinnaker Seafood Broiler, one of the oldest restaurants in the village, which was built in the 1980s. “It has changed a lot.�

As the new landlord--the port district bought the buildings a few years ago--the district has spruced up the area with new landscaping and signage. In turn, merchants have dolled up the front of their stores with flowered window boxes and umbrella-shaded tables.

The effect is happy locals and tourists who come back week after week.

“I like to come and see the boats, eat over here and hear the music,� said Margarita Renteria of Simi Valley, reclining on a patch of grass with a friend Wednesday afternoon. “We try to come every weekend.�

But the influx of visitors and their money has not begun to make a dent in the massive $9-million debt the port district owes on the village itself.

While retail business climbed during the past three years, the finances of the marina business have deteriorated. The bulk of the district’s $2 million in revenue comes from boat slip rentals, which are about 25% vacant right now, Parsons said.

“The slips are a much bigger money maker,� he said. “We are very pleased to see the success on the retail side, don’t get me wrong. But it is frustrating to see the revenue from the slips falling.�

And then there is the lingering litigation with the developer, the now-defunct Ocean Services Corp. Port district officials filed for bankruptcy in August, 1993, seeking protection from creditors demanding payment of a $15.6-million judgment.

A federal judge ruled earlier this year that the district could be forced to sell some of its 152 acres of land at the harbor to repay the creditor, although Parsons said Wednesday that such a sale is unlikely. A federal judge will hear the case in U.S. District Court in Los Angeles next month.

The Sept. 12 trial date has some restaurant and shop owners on edge. “How are they going to pay for that lawsuit?� Gates asked. “I think that is a big question on everybody’s mind.�

But property manager Pena says the worst is behind the village. He contends that Ventura Harbor Village has entered smooth seas.

“I think everyone has been waiting for the other shoe to drop for a long time ,� he said. “After awhile, you push it aside and move on.�