CHRISTOPHER WOODARD Staff Reporter Oxnard may have won the race to attract the region’s first factory outlet shopping center, but neighboring Camarillo has won the war. Prime Retail Inc., co-owner of the Oxnard Factory Outlets, has approached Oxnard city officials with plans to reposition the shopping center as something other than an outlet mall, all but admitting defeat in its battle with the more upscale Camarillo Premium Outlets. “Prime is devoting its attention to finding a new market niche,” said Steve Kinney, president of the Greater Oxnard Economic Development Corp. “We’ve pretty much conceded the factory outlet market to Camarillo.” Far from giving up the factory outlet fight, however, Prime, a publicly traded real estate investment trust, is forging ahead with plans to develop a new 220,000-square-foot factory outlet center right next door to its rival in Camarillo. The project, featuring 10 buildings with stores of between 8,000 and 52,000 square feet, is targeted for a site off the Ventura (101) Freeway at Los Posas Road. It would be connected by a parking lot and pedestrian pathways to an adjacent Edwards Cinemas multiplex, which plans to expand from 12 to 22 screens. Company officials say the area is more than capable of supporting two competing outlet centers, asserting that it would create a “critical mass” of stores that would bring an additional $300,000 to $400,000 in sales tax revenue to the city of Camarillo. “Adding more to the existing base just really strengthens Camarillo, making it an even stronger destination for outlet shopping,” said Brian Lewbart, a spokesman for Prime. But the owner and operator of Camarillo Premium Outlets, Chelsea GCA Realty, Inc., is less than pleased. Officials with the New Jersey-based REIT declined comment on the project, but they appealed the Camarillo Planning Commission’s recent approval of the competing Prime project, saying it would glut the outlet market. However, Chelsea, which owns 115 stores in Camarillo, withdrew its appeal a few hours before the City Council meeting last week, after deciding the protest would have held up the Edwards expansion, which Chelsea believes would draw more shoppers to its mall, said Elizabeth L. Martyn, an attorney representing Chelsea. Still, the city’s approval of the competing project means Chelsea, one of the top three factory outlet REITs in the country, can expect to see Prime, the nation’s largest factory outlet operator, attempt to lure away its tenants and customers, said Linda Humphers, editor of Value Retail News, an industry trade publication. “They have a term for it in the industry: a parasite development,” said Humphers. “Someone comes in and starts feeding off your market.” The factory outlet saga in Ventura County began in the early ’90s when developers came to Oxnard and Camarillo with competing plans to develop factory outlet centers, an enticing prospect for two cities feeling the sting of a prolonged recession and declining property tax revenues because of Proposition 13. In 1994, the project in Camarillo became mired in a legal battle when an Oxnard businessman sued the city, contending environmental studies for the project didn’t adequately address its impacts. Oxnard used the opportunity to push through approval of its 36-store outlet center, with the expectation that the project would eventually double in size and generate $800,000 in annual sales tax revenue. Initially the Oxnard center, which opened on Memorial Day weekend in 1994, got off to a strong start, pumping $271,000 in sales tax revenue into city coffers in its first year. Then the more-upscale Premium outlet center opened in Camarillo. In addition to being several miles closer to San Fernando Valley shoppers, the Camarillo outlet features higher-end stores, such as BCBG, Barney’s New York, Calvin Klein, Charles David and Donna Karan. Oxnard, on the other hand, is populated by retailers like Designer Labels for Less, the Gap and Factory Brand Shoes. While Camarillo’s outlet had a polished Mediterranean look, Oxnard’s center was built with a farm motif, complete with windmills and a water tower, which local wags have described as something out of “Petticoat Junction.” As a result of the greater popularity of the Camarillo center, sales tax revenue to the city of Oxnard from its factory outlet stores declined from $271,000 in fiscal 1994-95 to $239 million in fiscal 1996-97, according to city officials. The Camarillo project, meanwhile, pumped $469,000 into that city’s coffers in 1995-96. The figure jumped to $680,000 in fiscal 1996-97. Figures for the fiscal year ended June 30, 1998 have not yet been released, but Chelsea officials estimate Camarillo will receive more than $1 million in sales tax revenue from the center. Oxnard Mayor Manuel Lopez says, in retrospect, the city made a mistake by not demanding that the original developer deliver a more upscale project, with more nationally known retailers. (That original developer was later bought out by Prime.) The farm theme probably was not a good idea, he conceded. “It was a horse race to see who could build first. We won the battle but lost the war,” he said. Tony Boden, Camarillo’s director of planning and community development, believes the city can support both centers. If Prime follows through on its plans to make its project more lifestyle-oriented with bookstores, coffee shops and a bakery the two projects should complement each other, he said. Chelsea’s Premium Outlet attracts customers from the San Fernando Valley, Malibu and as far away as Pacific Palisades, so it’s not just Camarillo-area residents supporting the center, he said. “It’s not what Camarillo can support. It’s what the region can support,” said Boden. Humphers believes the area could support about 600,000 square feet of factory outlet space, just slightly less than the 630,000 square feet that would exist in Camarillo if Prime moves ahead with its project. “Normally, when we tend to start looking at markets that do very well, you have a critical mass. It tends to be 400,000 to 600,000 square feet,” she said. Martyn said Chelsea while concerned about a possible glut of outlet shopping ultimately decided to let the market take its course. Chelsea officials don’t believe Prime will be successful in luring away their tenants, or finding other outlet stores that want to set up next door, said Martyn. Prime spokesman Lewbart, meanwhile, confirmed the Maryland-based company has approached Oxnard officials about changing its development agreement with the city to permit uses other than factory outlet stores. That doesn’t mean Prime would necessarily scrap the outlet theme altogether, he said. The company is still in the process of studying its options. “We may want to bring in family entertainment or theme restaurants (in conjunction with factory outlet stores),” he said. Oxnard official Kinney said the center might ultimately evolve into a hybrid mall, with factory outlet and other uses mixed together. However, he added, “They know that it would be deadly to remain 100 percent focused on factory outlet tenants.” William Fulton, an urban planner who devoted a chapter in his book “The Reluctant Metropolis” to the factory outlet wars between Camarillo and Oxnard, said it’s ironic that Camarillo ultimately sided with one of the owners of the competing Oxnard project despite concerns from its own outlet operator. “It just shows you there are only alliances of expediency in this war,” he said. Fulton said the mall war between the two cities illustrates a phenomenon seen throughout Southern California, where planning decisions are based on dollars and not what’s necessarily best for the community. “I generally think it’s a very destructive thing,” he said. “What should be just one of many considerations is being made the only consideration.” Before Chelsea withdrew its appeal of the Prime project, Martyn had said Camarillo was making a mistake by tampering with what has blossomed into a revenue-generating machine for the city. Chelsea initially had been told by Camarillo officials that they wanted to see big-box retail developed on the site Prime hopes to occupy a use Chelsea saw as compatible. Chelsea officials said they were surprised when the city agreed to entertain the idea of a competing outlet center. Martyn said if Prime is able to move forward with its project, it wouldn’t kill the proverbial goose that laid the golden egg, but it could “put the goose on a diet.”
