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Oxnard, Ca - Drought vs New Real Estate Development

Written by Posted On Wednesday, 09 December 2015 14:10
Oxnard Harbor Oxnard Harbor

 

 

 

 

Mark’s Ventura County Market Analysis

 

2nd & 3rd Quarter 2015 - (April - September)

 

Special Oxnard Drought vs New Home Development Issue

 

 

 

Housing sales, new home development, and water use have become interlocking issues in Ventura County. There is a housing shortage in Ventura County which has become more pronounced in the last 3 years. The demand for new homes has become so great that developers are once again free to build whatever city planning commissions will allow, knowing that any home they build will sell.

 

The severity and length of California’s drought have prompted the State to take the extraordinary action of mandating reductions in each city’s water useage, with very real consequences possible for those cities ( like Moorpark ) which fail to meet the state targets.  Each town in Ventura County has responded in a different manner to these requirements and a very few have finally begun the process of addressing water issues as they apply to new home construction.

 

To be fair, some towns have been working for years to improve their water resource infrastructure and availability. Oxnard, Camarillo and Ventura have all developed water treatment/pumping facilities to meet new demand in the last few years. Yet not all towns have a formalized linkage between water resources and new home development. More water is being pumped or purchased from other water agencies and then immediately apportioned to new home developments. It’s like maxing out a credit card and then asking to raise your minimum balance instead of paying it off.

 

Regardless of how each town manages its water supply, the net result has been to make water use more restricted, regulated and expensive for the average citizen and home owner. City governments have, with rare exception, passed these costs on to their constituents without any form of public review or voting process.

 

“In April, a state appeals court ruled that a tiered water rate used by the City of San Juan Capistrano to encourage conservation – similar to the plan adapted by Ventura – was unconstitutional. The 4th District Court of Appeal struck down Capistrano’s fee plan, saying it violated Proposition 218, which prohibits government agencies from charging more for a service than it costs to provide it.” Since the State Water Resources Control Board is enforcing the Governors’ water reduction mandate with each city in California, perhaps they should also check that city compliance is being done in a strictly legal manner.

 

   

 

I have arranged the material for this report in a roughly chronological format beginning the 2nd quarter of this year and progressing to early October. Issues are dynamic and have continued to change and evolve during this time so I have tried to capture a bit of this process.  There is no way to include everything which has happened since the governors drought reduction mandate this last Spring but I have tried to include enough details to lend a bit of insight and flavor to this extraordinary time in our Ventura County history.

 

 

 

Oxnard Development Vs the Drought

 

The Ventura County Star announced on Friday April 3rd that a brand new home community will soon be constructed at the previously named North Shore at Mandalay Bay. This development was a casualty of the recession but is now being resurrected by Irvine-based developer SunCal. This new 292 unit project will be called Beach-Walk on the Mandalay Coast.

 

Oxnard Art Lofts at 2201 Stratham Blvd in the Sunkist Circle off S Oxnard Blvd has begun leasing 18 units in what used to be a 1960s’ industrial building. In a June 16 issue of the Ventura County Star is was reported that the property was purchased for 2.95 million, this short sale represents a more than $6 million dollar loss to the former creditors with the new owners offering a unique opportunity to new tenants. Each unit has a new washer and dryer, refrigerator and stove. These are 2 story units with walled off upstairs living quarters capped at 319 sq ft and a downstairs studio area ranging in size from just less than 1000 sq ft to as large as 1600 sq ft. Those leasing these units must have a business license and as “efficency dwellings”, a maximum of only 2 people may live in each unit. These restrictions mandated by the Oxnard City Council also include the requirement that from 7:00am until 7:00pm Monday through Saturday, residential uses are subordinate to business uses.  

 

In a July 3 article in the Ventura County Star about rescuing feral cats from the demolished Wagon Wheel Mobile Home Park, it was mentioned that construction continues on a $450 million residential/office/park developmentat the former Wagon Wheel Restaurant and Motel site. The new 63 acre development will be called the Wagon Wheel Village at Oxnard. Corona based Lucas Oil Products, Inc. is financing the project which will include 1,500 housing units, 50,000 sq ft of commercial space and 7 acres of parks and open space.

 

 

 

Oxnard continues to have ups and downs in its’ attempts to provide more water to local farmers. A May 3rd edition of the “Star” reported that “Oxnard has water but no immediate way to get it to farmers. The city’s Advanced Water Purification Facility, which was switched on April 16, cleans treated sewage water to levels more pure than domestic tap water. State rules do not allow it to be used directly in the drinking water supply, but it can irrigate crops.”

 

 

 

“The city plans to build a new pipeline to serve growers east of town, but that system won’t be complete until at least 2016.” A pipeline system is already in the ground that could quickly link the farmers to Oxnard’s supply – temporarily – until the City’s permanent system is installed.”

 

 

 

“The problem? The existing pipeline was built to carry briny discharge the opposite way , from inland facilities out to the ocean. At stake is about 2,500 acre-feet a year of the recycled supply Oxnard meant for the growers. An acre-foot is about 326,000 gallons. The Pleasant Valley County Water District, the entity that wants Oxnard’s water, hired a consultant… who determined the mix of Oxnard’s ultra-pure water with briny discharge would still result in irrigation water much less salty than what farmers would otherwise pump from the ground. This according to Susan Mulligan, general manager of the Calleguas Municipal Water District which owns the briny discharge pipeline.”

 

 

 

At the end of April, Assemblywoman Jacqui Irwin, D-Thousand Oaks convened a meeting in Los Angeles with all the interested state and local regulators to explain the need for the temporary use of the “wrong way pipeline” and to streamline the permitting process, until such time as the new pipeline is finished. The connection was to be made in July with farmers receiving water as early as August.

 

 

 

In the meantime, in an article which appeared in the August 7 Ventura County Star, it was noted that the new recycled water pipeline construction project has been served a lawsuit by it’s own contractor – Mladen Buntich Construction Co., Inc. based in Upland, Ca.

 

 

 

“Work started in 2012 and was supposed to be finished in 6 months, but a slew of problems dogged the effort.”

 

The suit alleges: “Plans and specifications provided by the city had faulty information about the location of underground utilities, a Navy sewer main, a gas line, electrical conduits and a leaky drain not shown in plans, that flooded the contractor’s trench…also, workers found buried concrete slabs not shown in city documents. Initial pipe delivery by the city was late, and not all required permits and easements had been secured by the city.”  This required a redesign of the pipe line.

 

 

 

Bottom line: Oxnard has already spent $5.7 million on the original contract and an additional $815,952 in change orders. The contractor is seeking an additional $5,273,748 in expenses, though the lawsuit itself does not list a specific amount. In order to deal with these added expenses  “The City Council on July 28 approved up to $500,000 to hire Pasadena law firm Hunt Ortmann, which specializes in construction litigation.” So we have roughly $12.5 million in expenses for a two mile length of new pipe along Hueneme Road, for a per foot total cost of slightly less than $1200/ft.

 

 

 

( In the 16 August Ventura County Star an article entitled “Pipe Plans Facing Hurdle”  revealed that the Oxnard recycled water for the farmers must be stored in 2 reservoirs in Camarillo which are not approved for storage of recycled water. The United Water Conservation District owns the reservoirs and will not accept liability for the storage of recycled water unless the State Water Board approves it, that decision Timothy Moran of the State Water Board says will take 60 days. Oxnard was hoping to have that water to farmers by October, so by my calculations this will delay the water delivery by at least another month. )

 

 

 

The same article also revealed that an organization named the “Wishtoyo Foundation” has petitioned the State Water Resources Control Board to use the recycled water not to augment the farmers water supply but to offset the Santa Clara River water diverted for city use by the United Water Conservation District. In other words, they want do decrease the amount of water pumped by the city’s other resources, by the amount of new recycled water produced.   

 

“When new water is brought into a water scarce region,” said Wishtoyo’s general counsel, Jason Weiner, in a statement, ‘it should not be utilized to perpetuate decades of unsustainable, unreasonable and wasteful water practices that have led to the mining of Ventura County’s groundwater aquifers and the draining of the public’s streams.”

 

 

 

Ventura County Star October 10

 

“A judge has denied a water district’s request for a temporary restraining order to keep Oxnard’s recycled water out of a pair of agricultural reservoirs in Camarillo.

 

The unusual scenario stems from concerns of the reservoirs’ owner, the United Water Conservation District, over liabilities involved with the recycled supply, which is subject to stricter regulatory burdens. United says it first wants a clear-cut agreement spelling out its obligations. As property owner, the district worries about liabilities in case of a spill, for example.

 

Ventura County Superior Court Judge Rebecca Riley ruled against United on Monday, saying the district hadn’t shown it would suffer irreparable harm if the preliminary injunction weren’t granted.

 

United has the ability to do what it was asking of the court, she indicated.

 

“It owns and controls the reservoir and admitted in court that it has the power to cut off access,” Riley wrote.

 

In addition, any potential harm could be addressed by damage payments, the order says.

 

“This is balanced against almost certain harm to the public through the loss of millions of gallons of water, which could be used at this time of prolonged drought to irrigate crops in a county where the economy relies heavily on agriculture,” the ruling says.

 

United owns the reservoirs, but the Pleasant Valley County Water District has historically managed them. Pleasant Valley farmers hope to get access to Oxnard’s newly available recycled water supply as soon as a connection is set up. Another agency’s pipeline will serve as the temporary conduit until Oxnard builds a permanent system to supply Pleasant Valley. John Mathews, general counsel for Pleasant Valley, said the ruling was the “ first step” because the underlying lawsuit remains.

 

Mathews also said the district offered United an indemnity agreement that was rejected.

 

“We were hoping that would help to move things along, but they chose not to accept,” he said.

 

Pleasant Valley hopes recycled water deliveries will start by the end of the month.

 

Anthony Trembley, United’s attorney, said the district respectfully disagrees with the ruling and is evaluating options.

 

The indemnity agreement was rejected because it was inadequate, he said.

 

In addition to the lawsuit, United has filed a petition on the matter with the State Water Resources Control Board. That petition is still pending, Trembley said.”

 

 

 

So the Judge has tried to allow the process of storing water temporarily in 2 Camarillo reservoirs to move forward. The United Water Conservation District even offered an indemnity clause by the Pleasant Valley County Water District which manages the reservoirs, but United refused it citing the indemnity clause was “inadequate”. So United’s concern over recycled water liabilities has effectively blocked the supply of millions of gallons of water to irrigate local cropland.

 

 

 

 

 

The September 11 Star reports:A deal is in the works to build an extended stay Hyatt hotel to replace the shuttered Casa Sirena Hotel at Channel Islands Harbor, officials said Thursday.

 

In a presentation at an Oxnard Chamber of Commerce breakfast, developer David Dreher shared plans for the four-story Hyatt House hotel to be built on the water’s edge at the end of Peninsula Road.

 

“We’ve been meeting with Hyatt for over a year,” Dreher told the group of about 80 dignitaries and business officials at the Tower Club in Oxnard. “We’re very, very excited about a partnership with Hyatt.”

 

Harbor Director Lyn Krieger said the hotel could open in 2018 if an agreement can be reached and the project passes an array of government reviews. 

 

Dreher works for Irvine-based Brighton Management, which operates 40 hotels in California and seven in Ventura County, including Marriott and Four Points by Sheraton hotels.

 

The hotel likely would be a three-star facility versus a luxury four- or five-star hotel, a rating that requires valet parking and 24-hour room service, he said.

 

In an interview after the gathering, Dreher said he hoped a deal with Hyatt would be reached by early next year.

 

Casa Sirena, a signature project of legendary Oxnard developer Martin V. “Bud” Smith, once served as a popular magnet for visitors. But it has been closed for about five years and lies empty and deteriorating on a premier site at the marina. Officials say it is beyond repair and needs to be demolished.

 

The new hotel would offer 205 suites for stays of perhaps five or more days, as well as meeting space that could accommodate 200. Brighton also plans to demolish the closed Lobster Trap restaurant and replace it with a new eating spot.

 

A promenade would be built and an outdoor area would accommodate weddings and other social events.

 

Krieger said about a dozen public agencies must approve the hotel that would rise to 54 feet, about 11 feet higher than the old three-story hotel. Brighton has not run into opposition while sharing the plans with various community groups. The approvals should be expedited because the project involves replacing an existing hotel and not building a new one on bare land, Krieger said.

 

Nancy Lindholm, president and CEO of the Oxnard Chamber of Commerce, hopes the project will bring back some of the vitality she remembers from the 1980s when Casa Sirena was a fun place to be.

 

“It was a real gathering place for a lot of people in the county,” she said. “The Casa Sirena was always where you wanted out-of town guests to stay. They could stay in the pristine harbor and watch the boats go by. We’d like to see that comeback again.”

 

The hotel would be the second Hyatt in Ventura County. The Hyatt Westlake Plaza is a luxury hotel in Thousand Oaks.”

 

 

 

 

 

The Sept 3 issue of the “Star” reports: A proposed condominium complex on Vineyard Avenue just outside the Oxnard city limits got a less-than enthusiastic response from the City Council.

 

Developer Aldersgate Investment LLC wants to build 228 units on a 9.9acre site that belongs to the Rio School District and houses a former elementary school. The district declared the property surplus in 2013 and hopes proceeds from the sale will help it build a new campus in Oxnard’s River Park development. The project site at 2714 E. Vineyard Ave. is in county jurisdiction now but would be annexed into the city.

 

The council made no decisions at its meeting Tuesday but was shown plans as part of a pre-application review to get initial feedback. That feedback showed the panel has deep concerns over parking and safety posed by a dense project on the busy street.

 

“I’m nervous about parking,” said Councilman Bryan MacDonald, especially because “density bonuses” mandated by inclusion of affordable units would reduce parkingspace requirements.

 

“I’m not convinced this has to be in the city,” he added, when the county has affordable housing inventory requirements to fulfill.

 

Other council members also wondered whether the project needed to be annexed into the city and noted heavy traffic on Vineyard would be dangerous for residents.

 

The Rio Urbana project would consist of 12 buildings with 19 condos each. The complex, with twoand three-bedroom units, would be marketed to families of four, architect Jeff Zook said. All of the units would be for sale.

 

The complex would be modeled closely after the developer’s existing Vista Urbana project in RiverPark. Those 156 units, all affordable, were sold out halfway through construction, Zook said. The ratio of affordable units in the new project will be at least 20 percent and up to 100 percent, plans show.

 

Council members said the Vista Urbana project turned out well but the new complex, on a site with different challenges, calls for a new approach.

 

“Right now, this is honestly not very appealing to me,” council member Carmen Ramirez said.

 

Mayor Tim Flynn wondered about cumulative effects of increased traffic and parking shortages as dense projects continue to spring up. RiverPark is not fully built out, he said, and the new Wagon Wheel project across Highway 101 is just getting started.

 

 

 

The October 8 “Star” reported:  A corner of south Oxnard where mobile home parks cluster along Pleasant Valley Road will be getting a taller addition: a three-story, 101-unit apartment complex. The project, approved 4-1 by the City Council on Tuesday night, was both lauded and criticized by two dozen or so speakers who packed chambers during the lengthy session. The council also approved an adjacent 70-unit senior residential facility from the same developer, Vince Daly.

 

It was the apartment complex, however, that drew a crowd of impassioned neighbors, who voiced concerns about traffic, parking, noise and compatibility. The roughly 7-acre site, near Etting Road and next to a Masonic cemetery, is surrounded by mobile homes, single-family homes and two schools.

 

What’s more, another 42-unit affordable apartment complex is planned just west on 2 acres sandwiched by the Masonic cemetery and a historic Japanese cemetery. That proposal is being developed by the Cabrillo Economic Development Corp.

 

Traffic is already a nightmare during commutes, residents told the council.

 

“It changes the whole character of our community,” Robert Rexford said. “We believe this project is too big and not suited for our neighborhood.”

 

Many who spoke against the development said they had lived in their homes for 40 years or more.

 

But Frank Naumann, who’d spent most of his 71 years in the area, had a different take. Naumann, from a longtime local farming family that had sold the land to Daly, told the council he remembered when the area was all orchards and lima beans. It wasn’t in city limits then. His family watched as housing cropped up in the 1960s.

 

“Orchards and bean fields changed to residential and school use,” Naumann said. Now, there’s not room to farm, he said, and the remaining parcels are exactly what was intended to be developed as infill under local landuse restrictions known as SOAR.

 

Others also spoke in support, saying south Oxnard in particular needs more housing.

 

Council members saw both pros and cons but were told by legal staff they had little choice but to approve the project.

 

That’s because the apartment complex will include 12 units for very low- income residents. State laws that incentivize development of affordable housing mean the project qualifies for so-called “density bonuses.” Those rules not only allow concessions for parking requirements, for example, but also would make it extremely difficult to deny the project, the council was told.

 

Mayor Tim Flynn cast the no vote, saying he wanted infill closer to the city’s core.

 

Councilman Bryan MacDonald, who has served on regional panels that deal with state affordable housing requirements, said Oxnard has a “huge need for rental properties.”

 

The city has a lot of people but not a lot of housing stock, MacDonald said, creating a problem Oxnard needs to address.

 

“I’m kind of at a loss as to where else we’d put it,” he said.

 

 

 

 

 

Summary

 

 

 

Kudos to Oxnard for developing the Advanced Water Purification Facility and for the very ingenious proposed use of the “wrong way” pipeline to get that water to our local cropland.  It’s a shame that the original new pipeline project has gotten so expensive and litigious. It’s also a shame that the United Water Conservation District has chosen to block the use of this water by our local farmers until their own liability concerns are addressed in court.

 

 

 

I’m also curious about where the water will come from for the 1500 homes at the Wagon Wheel Village at Oxnard, the 292 unit Beach Walk at Mandalay Bay, the 228 unit Rio Urbana Project and the 205 Suite - Hyatt at the old Casa Sirena Hotel site and continued building at RiverPark. Nor should be forget the badly needed South Oxnard 42 unit apartment housing for migrant farmworkers, 70 unit two story senior living care center and 101 unit mixed-income apartment building.

 

 

 

Oxnard already has serious financial woes (“To balance the current year’s $115.2 million general fund, the City Council in June cut $12.8 million in spending and borrowed $16 million from Measure O, the half cent sales tax, to maintain solvency” -  17 Sept “Star”)  If I was a tax paying citizen of Oxnard, I think I would be very concerned about the continued City Council approval of new home developments and the increased demand on drinkable water resources. I do not predict an easy future for this city’s taxpayers.

 

Just the way I see it.

 

Mark Thorngren  -  Movewest Realty, Inc.

 

(805) 443-3366        This email address is being protected from spambots. You need JavaScript enabled to view it.          http://realtytimes.com/REUv/markthorngren 

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Additional drought and water use websites can be found at:    www.cityofcamarillo.org/savewater     www.bewaterwise.com        www.camarillogardening.com   www.saveourh2o.org  .

 

Most of the data used for this report is taken from the Ventura County Star and our local Ventura County Multiple Listing Service unless otherwise noted. This report is far from comprehensive and many important issues have been trimmed in the interest of brevity. All opinions are those of the author alone and do not necessarily reflect the viewpoint of Movewest Realty, Inc., the VCCAR or the Ventura County Star.

 

 

 

 

   

 

 

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