Economic forecast is bright, experts say

JANN HENDRY/Acorn Newspapers GOOD NEWS-California Lutheran University Professor of Economics Dr. Jamshid Damooei presents a rosy picture of the local and national economies during his presentation to the Thousand OaksWestlake Village Chamber of Commerce and Rotary Club last week. Fueled by low unemployment rates and high property values, the economic picture for East Ventura County looks robust heading into 2006, according to a panel of local economic and real estate experts.

The reports of a bullish Conejo Valley came during the 14th annual Regional Economic Forecast breakfast hosted by the Thousand Oaks-Westlake Regional Chamber of Commerce at the Westlake Inn last week.

"The Thousand Oaks and Westlake Village communities are reflecting the greatest economic strength in all of Ventura County," Thousand Oaks Mayor Dennis Gillette said.

The neighboring cities outpaced both national and state averages in unemployment, median household income and property value last year.

"2005 by all measures has been a good year," said Jamshid Damooei, an economics professor at Cal Lutheran University and the event's keynote speaker.

Damooei said the United States' economic prosperity was largely based on low unemployment rates, significant growth of real gross domestic product and a "manageable" inflation rate despite rising energy costs.

Ventura County beat the nationwide average and experienced 5 percent growth in real gross county product last year.

Damooei said the national economy remains strong because wages are climbing, even though they are not quite what blue-collar workers were seeing in 2001 before the nationwide recession.

Damooei cited a recent study by the United States Bureau of Economic Analysis that reports a nearly 1 percent rise in personal incomes from November to December of last year. In addition, consumer spending remained strong with 5.4 percent growth this year, following a 5.9 percent rise in 2004.

Low poverty rates, especially in Westlake Village and Thousand Oaks, help paint a healthy economic picture that is furthered brightened by low unemployment rates. The local unemployment rate remains lower than the county average at around 4 percent.

Cars and hotels

Gillette said $2.6 billion in retail sales helped generate over $26 million in sales tax dollars for the Thousand Oaks general fund. The three largest sources of revenue for the city are the Auto Mall, The Oaks mall, the businesses along Thousand Oaks Boulevard and the Janss Marketplace.

"Auto sales in general remain fairly strong, with particular strength in import models," Gillette said. "Such sales bode well for the continued performance of the city's sales tax base."

Gillette said the makeover of The Oaks mall and the arrival of Nordstrom to Thousand Oaks is still on track.

With his optimism, though, Gillette warned that traffic may become an Achille's heel for local business. If commuters cannot get into the city, businesses stand to lose money.

Traffic will be alleviated by the recent Prop. 42 funding to widen the 23 Freeway, but in order to truly address the city's traffic problem, Gillette said additional money is needed to expand the interchange at the 23 and 101 freeways and to widen the 118 Freeway.

Westlake Village Mayor Susan McSweeney also reported a strong economic future for her city.

"This is Westlake Village; there is no bad news," quipped McSweeney. "There's good, better and best."

With reserve funds at about $7 million, the city will get a boost in revenue when it begins collecting bed tax from the Four Seasons Hotel and the Resident Inn by Marriott, which are expected to be completed next year. Combined, the two hotels will account for more than 400 rooms and are expected to generate another $1 million a year in revenue for the city.

The lion's share of Westlake's $2.8 million in annual sales tax revenue comes from Costco and the stores in the Westlake Village Marketplace, city officials said.

McSweeney noted that Westlake's citywide streetscape beautification project is ongoing, and the city continues to work with Triunfo YMCA officials to turn the proposed 35,000-squarefoot sports complex and adjoining eight-acre sports park into a reality.

Commercial real estate up

In the next four to five years, Westlake Village is expected to see about 1 million square feet in new office space, according to city reports.

"This is probably the hottest office market in the last seven years for Southern California," said Rick Principe, president/ CEO of Westcord Commercial Real Estate Services.

Low interest rates, compounded by a scarcity of land, has driven vacant land values up to $45 to $55 per square foot, a trend experts see continuing.

The rising costs of building material will only drive rental rates higher, Principe said.

No bubble here

Damooei said that both Thousand Oaks and Westlake Village far outpaced other cities in CNN's best places to live survey. Most notable were the comparisons of median home prices. The Best Places average was a little more than $315,000, while Thousand Oaks' median home price was more than $560,000 and Westlake Village's median home price was a whopping $785,000.

"If we take a look at last year, we had a housing shortage. We still have a housing shortage, and we'll always have a housing shortage," Principe said. "We just have to realize it. . . . Everybody wants to come here, and we are virtually being built out both in Thousand Oaks and Westlake Village."

Median household incomes seemed to reflect the same trend, with both Thousand Oaks and Westlake Village median household incomes resting about 20 percent higher than the survey average.

But rising housing prices also pose a problem, said Rick Lemmo, vice president with Caruso Affiliated.

"We need to create workforce housing," Lemmo said. "We have people earning $40,000 to $60,000 a year who cannot afford to live in this area. Our service goes down when people have to travel an hour and 40 minutes for a $12-an-hour job.