County in Push to Bring New Business to Region : Growth: Leaders find they are up against formidable obstacles: deep troubles in the local economy and tough pollution control rules.

When Ventura County Supervisor John K. Flynn announced a new jobs initiative last week, he stressed the seriousness of the local economic situation by flashing a Depression-era magazine.

Featured in the July, 1933, California Journal of Development were articles on the importance of government and business cooperation in times of crisis.

“There is a growing partnership and marriage between business leaders and government leaders,” Flynn said. “They’re working together like they’ve never worked together before.”

Richard Spencer, an executive for the county’s largest developer, Martin V. Smith and Associates, added: “This has been a call to arms for groups that heretofore haven’t given each other the time of day.”

Flynn and Spencer say they can sell Ventura County for its virtues--its beaches and mountains, its low crime and educated workers. And they say they will lure firms here with promises to walk them through bureaucratic tangles.

But the new coalition of forces uniting to push for more jobs and a better business climate in the county is up against two formidable obstacles:

Key economic indicators show the local economy is in deeper trouble than any quick fix is likely to cure, and the county’s tough pollution control rules work against it when it comes to luring the new companies that could lead an economic upturn.

As Ventura County’s population increased 3 1/2 times over the last three decades, local government’s most important task was to control explosive growth. Strict policies prohibiting hopscotch development were enacted, and nearly every local jurisdiction placed annual limits on construction.

But as the current recession has persisted in California, Ventura County has suffered like never before.

County residents lost 5,100 jobs in 1992, after averaging job increases of 10,600 a year for nearly two decades. And the number of jobs by companies within the county dropped 9,600, or 3.9%, over the last two years.

The county’s unemployment rate was 8.7% in December, the highest year-end rate since the recession of 1983.

The average sales price of a single-family home fell to about $228,254 during the first quarter of this year, continuing a three-year decline. The average value of a house in 1990 was $275,010, according to the U.S. census.

The county’s industrial buildings are being leased for rates last seen in the mid-1980s and sold for less than their construction costs. One-quarter of all office space is empty. Almost no industrial or office construction is taking place.

Prime farmland, bought by speculators for as much as $200,000 an acre in the late 1980s, can now be sold for only its value as farm property, between $5,000 and $20,000 an acre depending on type of crop, developers say.

As a result of this downturn, property and sales taxes are dropping and local governments are hustling to recoup those losses by making it easier for companies to build and do business here.

In fact, Flynn’s new private-public plan to recruit high-tech companies at an international computer conference next month is only the most recent effort to make businesses feel at home in Ventura County--a jurisdiction known in Southern California for its slow-growth policies.

Ten days ago, a second “strike force” of architects, developers, utility executives and government officials declared that their Red Team had been formed to lure firms to this county--and that their first target is a new manufacturing plant Mercedes-Benz plans to build in the United States.

“It’s time Ventura County begins to roll out the red carpet and tear up the red tape,” said Assemblyman Nao Takasugi (R-Oxnard), a spokesman for the group.

Last year, a countywide economic vitality conference brought together local leaders to plan ways to make life easier for businesses and keep them from following their neighbors to low-tax, pro-business climates such as Reno, Phoenix, Salt Lake City, Denver and Austin, Tex.

As a result, all 10 local cities and the county government now have pro-business trouble-shooters who help cut bureaucratic red tape and move projects along, said Ruth Schepler, business ombudsman for the county.

“We’re all in it together,” Schepler said. “The county survives when business survives. When businesses move away, they’re not paying taxes and government founders.”

In addition to hiring Schepler, county officials have begun to accommodate business by combining some fire, environmental and weights-and-measures inspections into a single visit, and charging a single lower fee.

And, responding to a key developer complaint, county air quality officials have turned a friendlier face to business: Officials now meet immediately with prospective builders to personally explain the agency’s complicated paperwork and put applicants in touch with engineers, Schepler said.

County supervisors are also looking into ways to exempt smaller businesses from costly car-pooling requirements now imposed on any company with more than 50 employees. Companies with fewer than 100 employees may be exempted from the plan, or the anti-smog rule may be rewritten altogether, officials said.

Just three years ago, Ventura County’s environmental movement seemed at its political zenith after stunning victories in Ventura city and county elections.

But Supervisor Maria VanderKolk, whose upset victory was based partly on her pledge to preserve open space, now says that the hardest thing bad times have forced her to learn is to strike a balance between environmental health and economic necessity.

“You can love the environment and the green hills as much as you want, but if people don’t have jobs you have a major problem,” she said.

Marshall MacKinen, administrator of county airports, said that in the two years he’s been in Ventura County many officials have begun to reconsider their long-held positions on business and growth.

“We’re saying, ‘How can we stop this exodus?’ ” MacKinen said. “I’ve watched a tremendous reversal in thinking. The response used to be, ‘Hey, that’s not county policy, you can’t do that.’ Now it’s, ‘Hey, let’s think about it.’ If you hear a crashing sound, that will be the old policies falling everywhere.”

Some local cities recently have bent so far to lure new job-rich businesses that they have been accused of giving away too much.

Oxnard and Simi Valley--long considered the most friendly local cities to business--also have been aggressive recruiters of out-of-county firms.

For example, Oxnard recently agreed to waive $2 million in fees to encourage a Los Angeles developer to break ground on a factory outlet mall ahead of a competing Camarillo project. Camarillo, in turn, agreed to return up to $500,000 a year for 20 years to its mall developer. Even with such incentives, neither project has broken ground.

Also within the last year, Simi Valley has lured a 400-employee medical manufacturer to town by offering to give back half the property tax the company will pay to the city’s redevelopment agency--a benefit worth $400,000 over 10 years.

Simi Valley also promised Countrywide Funding Corp., the nation’s largest independent mortgage firm, that the city would return an even greater share of property taxes if the company will promptly expand its current 500-employee Simi Valley operation, Mayor Greg Stratton said. The benefit could reach $1 million over 10 years, he said.

“We’re not giving away the store,” Stratton said. “If they don’t build their building, they don’t pay any taxes on it.”

Local businesses have welcomed Ventura County’s new-found, broad-based embrace of the business community--but with a cocked eyebrow.

“There are some things going on, but we’ve got a lot of work to do,” said Robert Goetsch, an Oxnard developer who heads the local chapter of the National Assn. of Industrial and Office Parks.

“What has got to be put on the table for the public is that sometimes there’s a trade-off between jobs and the various levels of air quality,” Goetsch added. “This is similar to what is going on up north with loggers and environmentalists, and sometimes you have to make some tough decisions.”

Particularly troublesome to firms that consider moving to Ventura County are local developer fees that brokers say are generally high and air-quality rules that businesses insist are unnecessarily stringent and inflexible.

“We’ve lost deals in the past and we’ll lose them in the future because of these air-control regulations,” said Lester Jacobson, a commercial real estate broker who works with Oxnard Plain farmers. “I’ve had companies tell me, ‘We’ll go some place where they want us. Let Ventura County have their clean air.’ We need more help from the powers that be on this.”

Goetsch, who has been working with the Anheuser-Busch Co. to find a site for a plant to make beer cans, said the giant company has probably eliminated Ventura County from consideration.

“The perception is that because of stringent air-quality controls it is very difficult for manufacturing companies to move into Ventura County,” he said.

County air-pollution officials say their rules are strict, even more so in some cases than those in the Los Angeles Basin. But they say that is out of necessity.

Because Ventura County is the nation’s 13th-worst violator of federal ozone emission standards, it must continue to reduce pollutants for years to come or risk loss of control to federal regulators, said Richard H. Baldwin, manager of the Air Pollution Control District.

But Baldwin insisted that his agency acts as a friend of business, not its enemy.

“While the rules are difficult, when a business is trying to get a permit we’re trying to help them,” he said. “It’s just that when you have a severe air-pollution problem, it’s difficult to get a permit.”

In preparation for an expected meeting with Anheuser-Busch representatives, Baldwin said he has tried to find ways the company can acquire pollution credits from firms that have cut their emissions. Without such credits, which are in short supply, the brewing company cannot build here.

In good times, county officials relied on luring non-polluting research and development firms from the expensive and congested Los Angeles Basin. But with the recession, lease rates were cut sharply in the San Fernando Valley and the northward migration has slowed to a crawl.

“There are very few people expanding or relocating,” said Russ Goodman, regional president for the Sares/Regis Group, which owns the two Sammis business parks in Oxnard. “We were doing 40 acres of industrial transactions a year, but we haven’t done an industrial (sale) in two years.

“We have great confidence in the growth of Ventura County in the long run,” Goodman said. But a rebound may still be two or three years away, he said.

Goetsch said sagging land values now allow builders to sell an acre of finished industrial space for $80,000--compared to up to $300,000 in 1988-89. And that lower price is comparable to those in cities such as Salt Lake City and Phoenix.

But local developer fees imposed by cities, school districts, park agencies and water companies are so high that they often cost the builder as much as the land itself, he said.

For example, Oxnard’s fees for each new house are now more than $20,000, compared to a nationwide average of $9,425, according to a recent study of 206 communities across the country, Goetsch said. Local fees on business construction are also above the norm, he said.

Fred Ferro, a vice president at the Grubb & Ellis Co. brokerage in Oxnard, said fees are not only high, but local governments’ listings of them are often incomplete or figured in different ways, so comparisons are a problem.

“It’s very difficult to get the complete fees,” he said. “Each division is a little fiefdom, and they create these fees in isolation, and they don’t care what the other department is charging. You go to the schools and write a check, you go to public works and write a check.”

So before Flynn’s Blue Team and Takasugi’s Red Team take to the road in search of new companies, they ought to figure out how to offer something much more than promises to streamline the permit process, Ferro said.

“They’re going to have to offer a reduction of some of these fees,” he said, “and they’re going to have to offer more flexibility in air-pollution control rules.”

Officials such as Flynn say they are going to sell Ventura County’s quality of life--its rural beauty, good schools and safe communities, the very benefits that have pulled immigrants from Los Angeles Basin for decades.

There are also indications that a local recovery may have already begun.

The vacancy rate of Ventura County’s industrial buildings has fallen from 16.9% to 12.5% over the last year thanks to three large new leases and six small building sales in the east county.

The office vacancy rate also has declined from a peak of 29% in 1991 to 24.2% today.

And a TRW survey found that Ventura was the only county in Southern California to register an increase in home sales for the first quarter of this year.

Indeed, there are those who argue that Ventura County is poised for strong growth over the next few years because of increased traffic at the expanding Port of Hueneme, the possible development of an airport for commercial jets at the Point Mugu Naval Air Station and the proposed construction of a state university near Camarillo.

Neil A. Moyer, president of the Environmental Coalition of Ventura County, sees things a bit differently.

He sees no boom, partly because of the high cost of land locally, but rather a prolonged struggle to preserve the open space and rural qualities that make Ventura County so attractive.

“There’s going to be a nibbling away at the edges of the ag lands and open space,” he said. “We’re going to see a gradual deterioration. And if we want to, we can become the Orange County of the next century.”

Ventura County’s Economic Ills Jobs: Total jobs are down 9,600 over the last two years. Unemployment: The 8.7% rate in December was the highest year-end rate since 1983. Property value: This year’s 2.5% projected increase compares with an average gain of 12.2% in the 1980s. Sales tax: Taxable sales dropped 4.4% in 1991, compared with average gains of 9.5% in the 1980s. Lease rates: Since 1989, rates are off 20% to 35% for industrial buildings, 20% to 25% for offices and 10% to 15% for retail space. Sources: State Board of Equalization, state Economic Development Department, Grubb & Ellis Co.