Local economic forecast cautiously optimistic




CRYSTAL BALL-Local real estate expert Rick Principe discusses this year's outlook.

CRYSTAL BALL-Local real estate expert Rick Principe discusses this year’s outlook.


By Sophia Fischer
sfischer@theacorn.com

The economic outlook for the Conejo Valley is strong for the coming year, but it isn’t without problems, according to the panel of political and business leaders at a breakfast forum last week at the Westlake Village Inn.


The meeting, sponsored by the Thousand Oaks-Westlake Village Regional Chamber of Commerce and the Rotary Club of Thousand Oaks, highlighted some of the area’s strengths. These included greater consumer confidence and large companies that offer residents employment and benefits, as well as weaknesses such as skyrocketing housing prices and the erosion of middle-class jobs.

The speakers included Charles Maxey, dean of California Lutheran University School of Business; Westlake Village Mayor Mark Rutherford; Thousand Oaks Mayor Claudia Bill-de la Peña; Rick Principe, president of Westcord Commercial Real Estate Services; Cris Bremner, The Oaks mall senior marketing manager; and Geordie Crossen, president of NBS Financial Services.


"The bottom line is I am optimistic. So are you. But we have huge problems and I hope we have the political will to solve them," said Maxey, the keynote speaker.


Maxey also addressed federal and state economic issues and their effect locally.


National concerns include war, which "destroys assets"; the federal deficit, which is either at $412 billion or $521 billion, "no one knows for sure"; and the weakening dollar. But the 3 percent increase in gross domestic product is a positive sign, and the fact that Federal Reserve Board Chairman Alan Greenspan and the Bush Administration are optimistic is a good thing, too.


"We cannot have economic growth sufficient to buy us out of these problems. How we do it remains to be seen," Maxey said.


The state of California is also struggling with a long list of problems, including the budget deficit, energy, health insurance, high business and housing costs, and workers’ compensation. It looked as if the recall of former Gov. Gray Davis and the subsequent election of Gov. Arnold Schwarzenegger would bring about change, but Maxey said that isn’t happening.


"We seem to be floating back to politics as usual. Somebody needs to break the logjam," Maxey said.


Local economic health is generally sound, added Maxey, but there are some concerns, chief among them housing. Part of the area’s affluence is a result of the large employers located here, said Maxey, but the high cost of housing is affecting the ability of employees to live in the community. The median price of a home in Ventura County in 2004 was $596,517, up 29 percent from 2003, when it was $462,459.


"I get calls from companies saying, ‘Can you help us figure out how to attract people to move here?’" Maxey said. "That’s a sign that this is a very real problem."


Some companies are staying in the area but expanding their businesses in less expensive locales elsewhere, according to Principe. Compounding the problem is that office buildings are being bought up and converted into condominiums, impacting the sales inventory market. On top of that, it is difficult to find land for sale.


"People are willing to pay more for real estate in the Conejo Valley than in other areas of California because of the quality of life," Principe said.


Some cities no longer have room for new housing or are halting growth. The result is that buyers are going to Camarillo, where thousands of new homes are being built.


"They will be driving on our freeways and our streets, creating gridlock, with no benefit to us," Principe said.


One way to relieve congestion is to create mixed-use areas that add a residential component to a commercial or industrial area, added Principe. Residents could live where they work, eliminating commutes. It’s a controversial idea that needs to be studied, said Bill-de la Peña.


"Would you rather have new homes being built in your backyard or along Thousand Oaks Boulevard, where there would be zero land lost?" Principe said.


Both Bill-de la Peña and Rutherford highlighted the good health of their respective cities.


Thousand Oaks has one of the strongest economies in the area, according to Bill-de la Pena, and it managed to avoid the last recession experienced by Ventura County.


The city is home to 4,000 small, medium and large companies that employ 70,000 people, including 7,000 at Amgen alone, she added. There are an additional 4,000 home-based businesses. The Thousand Oaks Auto Mall is one of the most successful in the country, making up about 30 percent of the city’s sales tax revenues.


New construction that will help the city retain its financial health includes the redevelopment of the former Kmart property in conjunction with Home Depot, the Lakes retail center scheduled to open this summer by the Civic Arts Plaza, a Marriott property, and new stores in the Kohl’s shopping center.


"Thousand Oaks will not continue to take in as much money as in the past, but will continue to do well for the next 10 years," Bill-de la Pena said.


The economic status of Westlake Village is equally robust, said Rutherford, with 10,000 jobs in a city of 8,400 residents. Property values have increased to about $1 million an acre and new businesses continue to come into the city. A new hotel and health center will open in 2006, two new restaurants are moving in, and a 200,000-square-foot retail center anchored by a Lowe’s home improvement store behind Costco is being considered. It will be one of the most expensive buildings in the Conejo Valley, according to Rutherford.


"That’s got to tell you something," Rutherford said. "We’re in demand. People want to come here and they want to move their businesses here."


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