Mall Merchants Sue Over Rent Increases

The suit, filed in Ventura County Superior Court, alleges the owners engaged in a "corrupt scheme" to require merchants to cover much of the $80 million in bond repayments authorized by the city to build the mall's new parking deck.

The Ventura County Grand Jury reported in June that the bonds were probably issued illegally in 1995 because the special low-interest, tax-exempt notes, known as "Mello-Roos" bonds, are generally reserved only for "public benefit" construction projects such as schools, roads, libraries and parks.

Also, the lawsuit stated, the bond wording itself states the bond costs should not be passed on to the mall's merchants, who allege the mall owners never told them about the expenses when the leases were signed.

"The tenants did not have fair notice," said Westlake attorney David Merrihugh, who represents the merchants. "These people did not have the opportunity to make an informed decision."

Mall representatives were unavailable for comment Monday and did not return phone calls about the suit.

Although the original bonds were for $30 million, which covered construction, the 25-year payment schedule will put the final repayment cost at more than $80 million, according to bond documents.

Mall merchants said higher expenses have already driven many of them out of business during what is typically the lucrative holiday season.

"They've got us up against the wall already," said Jack Kadoch, who runs the Crafters Guild store with his wife, Mary. "We haven't had a permanent tenant move in here in more than two years."