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City Council to Consider Downtown Theater Deal

Redevelopment: A contract with the developer would be the first step to build the Ventura entertainment complex. Officials hope to recoup the costs through higher property tax assessments.

July 29, 1996|TRACY WILSON | TIMES STAFF WRITER

VENTURA — It is the project that could change the face of downtown Ventura: a massive 10-screen movie theater and retail complex carved out of nearly an entire city block.

Tonight, the City Council is expected to take the first critical step in making it a reality.

City leaders and merchants in the historic downtown business district say construction of the theater and a companion 500-car parking garage will be the catalyst to their redevelopment efforts.

The city has already pumped more than $4.5 million into the downtown area in hopes of invigorating tourism and attracting more upscale restaurants and shops.

Now comes the reality check.

Building a movie theater and parking structure will cost the city an estimated $7.8 million, significantly more than what the council invested in widening downtown sidewalks and planting palm trees.

Located at Main and Chestnut streets, the theater would cost the city about $5 million and the parking structure an additional $2.8 million.

The city has money set aside for the parking structure, which would be built on a city-owned lot off Santa Clara Street. No money, however, has been earmarked for construction of the theater.

Although the city will help build the theater, it will not share in its profits. Instead, it expects to recoup its investment through enhanced tax values of downtown properties.

City staff members have recommended shifting dollars budgeted for other downtown projects into an account for the movie theater. But it could take decades for the city to see a return on its investment.

Nevertheless, council members say the theater project is Ventura's best bet for transforming the downtown corridor into a premier tourist destination, and they plan to move forward with the deal.

"I have been in favor of it all along, and I haven't heard anything to change my mind," Councilman Jim Monahan said. "It would be good for downtown. It would be good for Ventura."

The council tonight is set to consider a contract with Burbank developer Victor K. Georgino. The contract would allow him to sign an agreement with Century Theatres to operate the 10-screen cinema.

The contract would also allow the city to begin acquisition of properties and relocation of businesses in the 500 block of Main Street.

"This lays out the deal points and the parameters and tells staff to continue negotiations," said Councilman Gary Tuttle, chairman of the city's Redevelopment Agency. "If we don't take this step, there will be no second step."

If the council approves the agreement, the developer would still need to obtain permits and take the project through an environmental review process. But the agreement is the critical first step.

"It is not a final approval," Community Services Director Everett Millais said. "It is an initial go, and it is significant. If there is hesitancy at all, this is the place to say 'No.' "

Council members said they have no qualms about the agreement, but how the city will finance its share of the project remains a question.

"It is a question of making the financial package work," Councilman Steve Bennett said.

Under the proposal, the city would extend its line of credit to the Redevelopment Agency to acquire and clear four properties on Main Street. It is the most expensive part of the deal, estimated to cost about $3.2 million, including the relocation of a few businesses.

The city would then have to test the soil for toxic materials and archeological artifacts before giving the land to the developer. This is expected to cost about $100,000, although the amount could increase, depending on what officials find.

The contract calls for the city to spend an additional $1.7 million toward the theater construction, estimated at $5.4 million. The developer is expected to pay the rest, $3.7 million, and build the theater and parking garage.

Financing for the parking structure is separate from the movie theater deal because the city has already budgeted $2.8 million for the project.

The city's share of the theater proposal is so large because the city must buy and tear down the existing buildings on the 1.6-acre site, officials said. The city could take the properties through eminent domain, but officials are reluctant to take such an unpopular step.

In the end, a 10-screen movie theater is expected to cost far more than what the city expects to make from its operation. City officials say it would take 30 years for the project to pay for itself.

"Clearly, the amount of tax increment directly from the project will not equal the amount of investment that the agency is being asked to provide," Millais wrote in a report released Friday.

"However, these estimates do not take into consideration the impact on the property values of surrounding properties if the project were constructed," he continued.

A movie theater would encourage upscale businesses to move to downtown Ventura, driving up property values and therefore property tax revenue, he said.

The same theory holds true for sales tax revenue. Downtown businesses now account for 3.7% of the city's total sales tax revenue, or about $500,000. The spinoff benefits from the project are expected to boost that to 5%, or an increase of about $200,000.

Despite the 30-year payout, council members say the project is sure to spark business investments in the downtown corridor and other benefits that are difficult to calculate. And they are willing to make the investment.

"The city will either break even or see a slight profit," Councilman Jim Friedman said. "But I think you have to look beyond that. It is part of the whole redevelopment plan, and I think you have to move forward."

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