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Theater owners in Oxnard seek $8 million from developer

It is difficult to overstress the importance of contracts in business matters. Sometimes, in the absence of a contract, businesses are forced to engage in costly litigation that could have been avoided if a solid contract were in place.

This scenario is unfolding in Ventura County, where a dispute has resulted in part from California's recent dissolution of redevelopment agencies. Five years ago, a movie theater developer, Shea Properties, reached an agreement with city officials in Oxnard. At the time, a city ordinance was in place that said the operation of movie theaters was only permitted in the downtown area, and Shea wanted that ordinance changed.

To achieve that end, Shea agreed to pay the city $9 million for what was called a "Downtown Assistance Program." The purpose of the program was to lessen the effect of Shea's theater project, RiverPark, on the downtown theaters in Oxnard.

In exchange for the $9 million, Oxnard's Community Development Commission agreed to put up $12 million for a parking facility at the new development.

For its part, Shea has already paid $1 million to the assistance program. But after the state's redevelopment agencies were dissolved, the developer is unsure of where the remaining $8 million should go. The theater owners in downtown Oxnard say the money should go directly to them, but Shea has asked that the theater owners take their claims to court.

The developer's plan for distributing the payment is to put the money in a single account that the court can oversee. In the meantime, says Shea, the parties can work out an agreement or let a judge decide.

The negotiations between Oxnard's Community Development Commission and Shea had been underway for years, but no contract was ever created. Now the theater owners and the developer may have a contentious time in court.

Source: Pacific Coast Business Times, "RiverPark theaters spark $8M dispute," Dec. 3, 2012

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