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 proposed 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.
The June median home price in Oxnard was $456,500 up
from $440,000 in May up 6.7% from a year ago.
Port
Hueneme had a median sale price for June of $391,000 with a
12.2% price increase from a year ago.
Port Hueneme has the lowest
median home sale price in Ventura County and the only one less than $400,000.
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 development at 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 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. 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.
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 mark@movewest.com http://realtytimes.com/REUv/markthorngren
BRE Lic. #01413932
Mark's Blogs:
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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