Vast Implications Hinge on Port District Ruling : Ventura: A federal judge’s decision could open prime public oceanfront property to private development.

Lawyers for Ventura Harbor Village developers said that if a federal judge stands by his comment in court, the ruling could force the Ventura Port District to sell prime oceanfront property to pay off a $23-million debt to the developers.

But port district officials are holding out hope that the judge will change his tune once he puts the ruling in writing later this month.

“The judge has not come out with a final ruling,” said Richard Parsons, district general manager. “What he announced in the courtroom could change a bit.”

U.S. District Judge Harry L. Hupp told attorneys Thursday that he plans to write a precedent-setting ruling on the matter within three weeks.

Such an action could open more than 150 acres of prime, publicly owned property around the harbor to private development, and could jeopardize plans for a $20-million marine educational center.

If Hupp goes ahead with the ruling, it would represent a significant victory for Ventura Group Ventures, a contingent of local shareholders and federal bureaucrats who successfully sued the district for negotiating in bad faith with developers of the Ventura Harbor Village shopping center.

“We would like to get our money and be done with it,” said DeWitt (Red) Blase, the attorney representing the developers. Blase said Friday he expects Hupp’s written ruling to mirror the jurist’s comments in court on Thursday.

“The judge said the district can be compelled to sell real property to settle the judgment,” he said.

Regardless of which side prevails, both agree that an appeal is very likely. Both sides have disagreed with several of Hupp’s earlier rulings, such as Hupp’s ruling despite the objections of developers that the district cannot raise taxes to pay the debt.

Now, the developers want Hupp to open the door to selling some of the district’s land. But district officials argue that they cannot be forced to sell public property.

Both sides agree that such a ruling would set a precedent. “These are issues that have never been addressed,” Parsons said.

The port district was ordered by a Ventura County jury in 1991 to pay $31 million in damages to Ocean Services Corp., now known as Ventura Group Ventures. The amount was later reduced to $15.5 million, but interest has driven the total back up to $23 million.

The district filed for bankruptcy in 1993--the only Ventura County public agency to ever do so--and the case has bounced between bankruptcy proceedings and state and federal courts for several years.

“This has been a most unusual set of proceedings,” Parsons said. While state laws are at issue, a federal judge is hearing the case because one of the plaintiffs is the Federal Deposit Insurance Corp., Parsons said. The FDIC is a player because it took over a bankrupt Kansas bank that originally entered into the lawsuit.

Ventura city officials are watching the case with interest. The port district is its own public entity, but the potential sale of district-owned land could have dramatic impacts on the surrounding community.

“The city is taking a look at the options that are presented by the court’s action and we will be conferring with the port district next week,” said Steve Chase, assistant to the city manager.

Correspondent Paul Elias contributed to this story.