Pacific Coast Business Times Proudly serving Ventura, Santa Barbara and San Luis Obispo counties 2014-11-26T20:01:02Z WordPress Elijah Brumback <![CDATA[Camarillo industrial buildings sell for $54.5M]]> 2014-11-26T19:56:02Z 2014-11-26T19:44:15Z Mission Oaks Corporate Center

A $54.5 million deal for two industrial buildings in Camarillo is one of the biggest transactions to hit the South Coast real estate market this year.

The Mission Oaks Corporate Center, home to Deckers and Addison Behavioral Resources warehouses, was recently sold by a joint venture between Rexford Industrial and Dune Real Estate Partners to an undisclosed buyer.

“This is one of the largest transactions this market has seen in some time,” CBRE Vice Chairman Darla Longo, said in a statement. “It represented an excellent opportunity to acquire a critical mass of core stabilized product in the desirable Southern California market.”

The more than 730,000-square-foot property is located at 3001 and 3175 E. Mission Oaks Blvd. and sits on 38.9 acres.

3001 E. Mission Oaks Blvd. is a 309,500 square feet industrial warehouse distribution building with features including 28-foot clearance, 25 dock high positions and one ground level door. There is additional land behind the building that can be used for trailer storage, a staging area, additional parking, or building expansion.

3175 E. Mission Oaks Blvd. is a Class A, 423,106-square-foot warehouse building. The features include 30-foot to 35-foot clearance, 30 dock high positions, two ground level doors, and an ESFR fire protection system.

While Ventura, Oxnard, Simi Valley and Thousand Oak, have had more success in the industrial market with lower average vacancy rates over the last several years — between 2 percent and 6 percent — Camarillo has struggled to gain ground with an average vacancy rate of around 8 percent. The city’s vacancy factor has increased 1.1 percent over the last 12 months, though a major factor continues to be the mostly vacant space at the former Technicolor Campus.

CBRE Senior Vice President Paul Farray, First Vice President Doug Shaw and First Vice President Jim Meaney represented both the buyer and seller in the transaction.

Staff Report <![CDATA[Giving back: Montecito Bank & Trust gifts nonprofits $1 million]]> 2014-11-25T15:49:06Z 2014-11-25T01:20:43Z For the 12th consecutive year, Montecito Bank & Trust kicked off Thanksgiving week with $1 million in corporate gifts to regional nonprofits.

Precisely 184 organizations received checks at a Nov. 24 luncheon at the Coral Casino at the Four Seasons Santa Barbara Biltmore under a program that the region’s biggest privately owned bank calls “Community Dividends.”

“Our goal is to give back,” said Chairman Mike Towbes, owner of the $1.2 billion asset bank. “We don’t want to make profits and send them elsewhere.”

He said that part of the motivation for creating the Community Dividends program was to set an example for corporate philanthropy. “We want to encourage others to follow in our footsteps,” said Towbes.

Towbes and his board created the Community Dividends program shortly after Montecito Bank & Trust converted to a Subchapter S ownership structure which allows companies to pass profits along to their owners. By giving a portion of its profits directly to nonprofits, the donations are made in a tax-efficient way.

Montecito Bank & Trust President Janet Garufis said the original design was to present 100 checks for $10,000 at the luncheon whose purpose was not announced to the recipients. “Nobody knew why they were coming,” she recalled.

Over the years, the bank has moved away from the idea of presenting a fixed amount to each recipient and now provides gifts of variable amounts to a larger number of organizations. This year, she said, 341 organizations applied for funding through Community Dividends.

About 300 people attended the luncheon, including Cottage Health System CEO Ron Werft, Sansum Clinic CEO Dr. Kurt Ransohoff, Santa Barbara Foundation President Ron Gallo and Chris Kimball, president of California Lutheran University.

Elijah Brumback <![CDATA[North American Oil warns it could run out of cash]]> 2014-11-21T20:01:44Z 2014-11-21T08:03:37Z Unless North American Oil & Gas Corp. can raise enough capital to cover its operating expenses by Dec. 31, the Ventura company could be forced to close down.

According to filings with the U.S. Securities and Exchange Commission, the company has yet to establish an ongoing source of revenue and has accumulated losses of $2.7 million, along with a working capital deficit of more than $660,000 as of Sept. 30. The filings show the company has survived mainly on borrowings, sales of its common stock and advances from a related party for the last two years.

Additionally, Linda Gassaway, the company’s chief financial officer, submitted her resignation to the Ventura company on Oct. 30, effective immediately.

Following Gassaway’s resignation, the company named Cosimo Damiano as CFO. Damiano is a member of the company’s board and has served as an independent director of the company since November 2012. He also assisted with the merger that formed the company.

While the company has been actively pursuing land leases, it has budgeted to drill only one well by the end of this year, but that project is still contingent on the company’s ability to locate a source of financing. The company has started the permitting process on two other wells.

The company has sufficient funds, due largely to sales of the Company’s common stock for $1 million to continue general and administrative operations through Dec.31, 2014. Capital raising through either investors and farm-out agreements is required to move forward on capital projects, according to company filings.

The company wants to set up two drilling operations, one in the Tejon Ranch main oilfield and another in the Tejon Ranch extension. The estimated cost to do so is about $3.5 million. The Company is looking for outside funding through loans, partner agreements and all other capital sources at their disposal.

While Monterey shale has opened up both a new black gold rush and an environmental debate over unconventional drilling techniques in California, North American President and CEO Bob Rosenthal  previously told the Business Times that there’s still plenty of oil to be found by drilling the old way, but deeper.

North American Oil and Gas Corp. came to life in 2012 after Canadian firm East West Petroleum made a $2.5 million investment in a drilling venture with a privately held firm. The company merged with a publicly listed company on the OTC Bulletin Board to become North American.

The Ventura-based firm has accumulated about 5,000 acres worth of leases that it owns the working interest on, much of it south of Bakersfield, where the San Joaquin basin turns into foothills in the Tejon oilfield. Rosenthal told the Business Times in 2013 that he formed the company because he felt that California was simply under-explored. Many of the major oil companies pulled out two decades ago, but are now reconsidering in the wake of Occidental Petroleum’s discovery of as many as 250 million barrels of oil in the Monterey shale in 2009.

“For a long time, California has been considered kind of played out. All the exciting stuff was happening down in the Gulf of Mexico, and people went international. Then people started to return to the U.S. in these unconventional plays in North Dakota, Central Texas and South Texas,” Rosenthal told the Business Times last year. “Now, California is getting a second look.”

Still, North American, might not be able to continue that second look if it can’t find capital.

As of press time Nov. 19 the company’s stock was up 11.2 percent to $0.02.

Marissa Wenzke <![CDATA[Running on empty: Ventura County puts curbs on water well drilling]]> 2014-11-26T20:01:02Z 2014-11-21T08:02:35Z Jason Haas, general manager of Tablas Creek Vineyard, walks up a hill near Paso Robles. That city was one of the first to have a water moratorium. (Bloomberg News file photo)

Jason Haas, general manager of Tablas Creek Vineyard, walks up a hill near Paso Robles. That city was one of the first to have a water moratorium. (Bloomberg News file photo)


As the Sustainable Groundwater Management Act sits on the table for 2015, some water wells in the Tri-Counties are already facing new limitations after the Ventura County Board of Supervisors issued an emergency well-drilling moratorium on Oct. 28 with a 4-1 vote.

Since then, many agriculture industry experts and farmers have expressed opposition to the ban, claiming it was enacted through a closed process that lacked stakeholder input. The temporary ban will apply to private and agricultural wells in Calleguas Creek and the watersheds of Ventura, Cuyama and Santa Clara. It is expected to expire once local agencies turn in groundwater sustainability plans, which could take up to six to eight years for wells that are determined to be “high” and “medium” priority.

Citing the emergency drought and rainfall conditions that have been dropping in Ventura County for three years, the emergency ordinance states that depleted groundwater levels have proven the need for a halt to well-drilling.

“Water levels decreased in all basins an average of approximately 13 feet,” the ordinance states. “In some groundwater basins, water levels are consistently, and substantially in some places, below sea level.”

But many Ventura County farmers and advocacy groups such as VC-COLAB — the Ventura County Coalition of Labor  Agriculture and Business — say the board failed to reach out to agricultural interests before attempting to issue the ordinance. Meanwhile, some are saying that a number of the flaws in the ban make it impermissible.

“It’s legally suspect and vulnerable to legal challenge,” said Rob Saperstein, a water law attorney with  Brownstein, Hyatt, Farber Schreck, who assisted in representing farming interests opposed to the ban. According to Saperstein, the well drilling moratorium is flawed in three broad categories, particularly its lack of a California Environmental Quality Act analysis.

“The urgency basis is ludicrous; the CQEA analysis is completely absent,” Saperstein told the Business Times. “And the effect of the moratorium has a potential to limit or completely eliminate the ability of some of the farming entities to exercise their water rights…and water rights are a form of property rights.”

The ordinance states it is exempt from the California Environmental Quality Act requirements because “it can be seen with certainty that there is no possibility that it will have a significant effect on the environment as it includes regulations to protect groundwater resources…” and contains restrictions meant to preserve the environment and available resources. It also states that its urgency, which also exempts it from CQEA analysis, lies in preventing the failure and depletion of current and future wells.

However, the ordinance was not reviewed by the Agricultural Advisory Policy Committee, which is tasked with reviewing such policy before it reaches the board.

“It’s specifically there to do exactly what wasn’t happening, which is to discuss the agricultural impact of policymaking,” Tim Cohen, a farmer in Piru, said of the committee.

County Agricultural Commissioner Henry Gonzales said the board did not notify him about the ordinance prior to discussing it, and the only expertise he gave was during public comment at the Oct. 28 meeting.

“My only input was the two minutes I had to put forth the most information I could,” he said. “Hopefully, the county, in future similar endeavors, will consider not only the agricultural industry, but the commission as well…We should be involved at the ground level.”

However, Ventura County Board of Supervisors Chairman Steve Bennett, who pushed forth the ban, said announcing the moratorium to the agriculture community would have caused a flurry of well permit applications being sent in before the ban could go into effect.

“On every issue, I think you’re seeing us bend over backwards to get stakeholder input,” Bennett told the Business Times. “But with this one, the well applications would’ve just rushed in.”

Within 48 hours of the board announcing its plans to discuss a well moratorium, 37 applications were issued for new well permits.

While Bennett said this fact proves his reasoning, Cohen, who owns Rancho Temescal in Piru, said it doesn’t. With the County government debating a well moratorium that’s expected to go into effect almost immediately, Cohen said, it was a natural reaction for farmers to request permits while they still can.

“I may have money in the bank. But if I know it’s not going to be there Tuesday, I’m going to run to the bank,” he said. “But if you believe in government stability, there’s no reason to run to the bank.”

In the case of the Fox Canyon Groundwater Management Agency, its temporary water well moratorium — Emergency Ordinance E — was adopted in April 2014. Since then, GMA officials and farming interests have met together and are expected to reach an agreement by March of next year that will cut well water usage by 20 percent, according to Lynn Jensen, executive director of VC-COLAB. In a statement, Jensen details how Fox Canyon performed a “stakeholder driven process” that “stands in stark contrast” to the process used by the County Board of Supervsors.

But, according to Bennett, the process at Fox Canyon is not comparable because that agency has the ability to issue penalties for problems such as overuse, while the county does not.

In a letter addressed to Supervisor Bennett, Ventura County Farm Bureau CEO John Krist wrote that the ordinance targets the agriculture industry since it cannot be applied to municipal wells, which are state entities and thus not subject to county ordinances.

“Among the stated purposes of the moratorium is to ‘stabilize groundwater extractions’ in the county’s four major watersheds, but this cannot be accomplished by restricting only one of many categories of pumpers in just a subset of these watersheds,” Krist wrote. “It is unfair to impose the entire burden of attempting to accomplish this objective on farmers and ranchers while exempting urban residents from compliance.”

The letter also stated that while some groundwater basins are falling, “it is incorrect to characterize them all as being in a state of critical overdraft that necessitates immediate action under an urgency adoption procedure.”

It stated that evidence supporting the CQEA exemptions are not found in the record, and the new ban will make the Sustainable Groundwater Management Act difficult to implement due to a loss of trust from farmers.

Erika Martin <![CDATA[Edison taps area company to add storage]]> 2014-11-21T19:52:09Z 2014-11-21T08:01:27Z


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Guest commentary <![CDATA[Op/ed: Lessons from Japan’s struggle to recover from a post-bubble bout of deflation]]> 2014-11-21T17:14:57Z 2014-11-21T08:00:54Z By Mohamed El-Erian

Comforted by the notion that “Japan could not happen here,” there was a time when U.S. economists felt confident lecturing the Japanese government on how to pull the country out of its prolonged economic malaise.

However, as I wrote back in 2011, in doing so they severely underappreciated the challenges of post-bubble recoveries. Today they are rightly more timid about criticizing the Japanese, given that the West is still failing to bounce back fully from its own economic lapses, which culminated in the 2008 global financial crisis.

If anything, Japan continues to serve as a teacher for the rest of the world (notwithstanding its unique mix of characteristics, including lousy demographics and limits on labor mobility).

There was another lesson this week when Prime Minister Shinzo Abe decided to postpone a sales-tax increase that, not long ago, was deemed essential for the country’s fiscal sustainability. There is even some talk of cutting corporate taxes next year.

All this follows news of the country’s slip back into recession, which was emphasized by an unexpected contraction of 1.6 percent in the third quarter of the year.

This latest warning siren is particularly relevant for Europe, which inadvertently finds itself heading down the same path as the Japanese as it faces a mix of sluggish growth and a risk of price deflation.

At its core, Abe’s decision to postpone the consumption-tax increase reflects the chaos that prolonged weak economic momentum inflicts on countries wishing to pursue more than one objective — in this case, raising living standards, curtailing the growth in government debt and breaking the private sector’s deflationary mindset.

The move also highlights the difficulty of correcting impediments to growth that have become deeply embedded in the economy.

Remember that early on in his premiership Abe said he would pursue three “arrows” — monetary expansion, fiscal stimulus and structural reforms — to lift Japan out of its two lost decades.

European Central Bank President Mario Draghi has recently advocated similar goals for Europe, stressing the need to move simultaneously on improving both supply and demand measures. With new leadership at the Bank of Japan, Abe has had little difficulty in getting its support of strong stimulus measures.

Yet even with this advantage and with his significant majority in parliament, Abe has struggled in delivering the third arrow — structural reforms.

In calling for an early election in an attempt to extend his term, he is seeking to reassert his political dominance so he can move more forcefully to break down entrenched economic interests.

In the meantime, he is being forced to reconstitute a better mix for his three arrows to ensure that the country’s debt dynamics don’t get out of control.

• Mohamed El-Erian writes for Bloomberg View. Reach him at

Staff Report <![CDATA[Health-care giants tangle over emergency room billing]]> 2014-11-21T19:34:48Z 2014-11-21T08:00:51Z


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