by Robert McCord, Editor in Chief- VREG
The news reported the closure of Brooks Institute. Everyone lost from this closure. The students hopefully will find other institutions to complete their education and their teachers may find other positions, but the Citizens of Ventura is again holding the proverbial bag.
In February the City announced that Brooks was coming to town. Councilwoman Heitmann led the parade extolling the prospects of increased revenue for the city.
Sites were leased; the largest was the two top floors of a 5 story city office building at 505 Poli, just behind City Hall. Tenants of those two floors were evicted.
City staff rushed to execute leases for the 505 Poli property. Brooks entered into a contract to demolish and build tenant improvements on the two top floors at a contract price of $1.2 million. Permits were fast tracked for demolition and tenant improvements. When hazardous materials were found, Building & Safety again fast tracked the work at an additional cost of $80,000. Demolition was completed and 2/3 of the tenant improvements were built. Then Brooks closed its doors and the project imploded.
Brooks Institute paid no money for rent, no money for a security deposit and no performance bonds or guarantees to the City. Reportedly, $70,000 in back rent is due. Future rents are lost. The tenant improvements have yet to be completed. The Assistant City Manager tells us that it will only cost our City $200,000 to complete those improvements. The facts have proven otherwise.
The contractor filed a lien against the City for $825,000 for the work they and the subcontractors performed on City property. Add lost rents, future rents, rents the evicted tenants would have paid and the cost swells to over $1.2 million. Then there will be the legal costs.
Brooks Institute, owned by a Chinese owned company named Gphomestay, has lawyered up with an LA firm. The citizens of Ventura deserve to know why the taxpayers are again facing a huge loss.
Dreams for healthy economic growth are wonderful, but must be tempered with economic reality and good business sense. When those are ignored the phrase “a fool and his money are soon parted” is apropos.
The City Council has a lot to explain. They were quick to ask the citizens of Ventura for more taxes in Measure O. They spent $140,000 of our tax money to convince 51% of the voters to vote yes on that Measure. Will they be as quick to take responsibility for another $1 million plus dollar loss?
Two candidates on the City Council are seeking reelection in November, Councilwomen Weir and Heitmann. They need to explain why they did not have the common sense to avoid the risk of leasing to a tenant who had demonstrated an inability to not meet their financial obligations. We must have representatives that are experienced and understand business.
We, as a community, cannot afford to hand another $270,000,000 over the next 25 years to an inept City Council. By this recent action, this City Council is not capable of managing our tax money. This was all foreseeable, based upon the financial condition and history of Brooks Institute.
VREG is continuing to investigate this transaction and will report our findings in subsequent issues as new facts are discovered.