Port District Unveils Its Financial Recovery Plan

Pushed to act by a fast-approaching U.S. Bankruptcy Court deadline, city and port officials Wednesday night debated a business plan to get the ailing Ventura Port District back on its feet financially.

The meeting, the first joint session in years, comes less than a week before the district is required to file a debt adjustment plan with the court Tuesday.

Ed Wohlenburg, district general manager, explained a 57-page business plan proposed by consultants, which forms the basis of the debt adjustment plan.

The business plan concludes that the district should not sell its 170 acres above water nor its 117 acres underwater, because then it could never pay off its nearly $22 million in overdue loans and debts.

Instead, the report by Williams-Kuebelbeck & Associates Inc. in Sacramento recommends the port district undertake several projects to generate additional revenue. These include restructuring a loan guaranteed by the Federal Deposit Insurance Corp., increasing rents at Harbor Village and developing two vacant parcels to provide additional lease income.

Potentially more controversial is a recommendation that the district use $2 million from a $3-million dredging maintenance relief fund to provide the up-front cash necessary to make an initial payment to its main creditor. The money would be repaid to the dredging fund within 10 years.

Council members, city staff and residents quizzed the port commissioners and the consultant on various aspects of the plan. The port district is an independent agency that operates Ventura Harbor, but its five commissioners are appointed by the city.

Many residents from the Ventura Keys neighborhood resisted the idea of raiding the $3-million dredging fund, calling it irresponsible and possibly illegal.

Irving Sulemeyer, the port district’s attorney, conceded that touching the dredging fund could take court approval.

Other residents criticized the report’s suggestion that the city build 300 condominiums on one of the harbor’s vacant parcels.

Such a plan would need approval by the California Coastal Commission and would require hard-to-get housing allocations. Also, deed restrictions on the property would keep the district from developing the land until 1999.

Wohlenburg said during his presentation that the challenges are formidable--and that every proposal hinges on other agencies’ approval.

“The magnitude of the fiscal challenges makes this difficult,” he said. “Everything requires action, approval and consent of other agencies. The district does not hold its future in its own hands.”

The district filed for Chapter 9 bankruptcy Aug. 20, 1993. The district owes $4 million to the California Department of Boating and Waterways and $18 million to other creditors. Its single largest creditor, Ventura Group Venture Inc., won a $15.7-million court judgment against the district in 1991 for a breach-of-contract case it won because the district pulled out of a development project.

Dozens of concerned residents showed up at the Harbortown Hotel for Wednesday’s meeting, which was packed with city staff and lawyers.

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Some citizens said they were upset about the last-minute nature of the meeting. They questioned why it was held less than a week before the debt adjustment plan must be submitted to the court.

“They tried to keep it very quiet,” said Rita Marsh, a member of the Harbortown Homeowners Assn.

Port Commissioner Gary Jacobs said that while the plan is not perfect, there are few alternatives. From his perspective, keeping the harbor open is the top priority.

“The most important thing is maintaining the harbor entrance,” Jacobs said. “If we don’t it will fill in and become a lake, then a swamp.”