Thursday, February 14, 2008

The Best Lot(s) in Los Angeles?

WHAT: 138 acres of Hollywood Hilltop
HOW MUCH: $22,000,000

YOUR MAMAS NOTES: People all across Los Angeles are betwixt, bewildered and all atwitter over the uncertain future of the somewhat mysterious and undeveloped 138 acres of ridge line property just to the west of the Hollywood sign that has recently hit the market with a $22,000,000 asking price. According to listing information, the five parcel property includes Cahuenga Peak, which at 1,821 feet is the highest elevation in the region, and serves as a visual back drop for the iconic, beloved and world famous Hollywood sign. The peak and ridge line, a strong visual guide and landmark, can be seen from nearly everywhere in Los Angeles and the San Fernando Valley Area.

Many in Los Angeles, including usually well informed real estate agents up and down Sunset Boulevard, can be forgiven for thinking the undeveloped land was in some way protected, public lands, or part of the neighboring 4,107 acre Griffith Park. But oh how näive we are. Until 2002 the property had been owned by Howard Hughes' trust ever since the reclusive and often bizarre billionaire purchased the sky high parcels in the early 1940s.

The story goes that the kooky tycoon planned to build a secluded aerie on the property for his then lover Ginger Rogers. She, perhaps wisely, balked at the notion of being so alone and so far removed from the earthly delights of Hollywood below. The relationship soon went splitsville and the land remained undeveloped and a largely forgotten part of Howard Hughes' trust for more than 60 years.

In 2002 Fox River Financial Resources, reportedly a group of investors from Chicago, acquired the property for just $1,675,000, which quite frankly seems like a paltry and even shameful amount of money for the Howard Hughes Trust to accept for the gigantic property.

Ever since, Angelenos in the know and city officials have worried themselves sick and bitten their nails to the nubbins with anxiety about what sort of development plans Fox River might have for the property. The LA Times reported that city officials were given the opportunity to purchase the residentially zoned land but, shockingly, were unable to come up with the funds. Some reports indicate the land was (recently) appraised at $6,000,000, and the much higher price being sought by Fox River is surprising. It also might be unrealistic at best and greedy at worst since they know they have the city, who does not want the land developed, bent over a barrel.

Listing information for the property indicates that the land can be developed into one massive estate with 360 degree views that stretch to the Pacific Ocean and over the San Fernando Valley, or that five large estates can be constructed, each offering jetliner and near total privacy. The home sites would be undeniably spectacular. At this point, it is unclear to Your Mama whether any permits or permissions have been sought or granted to pull up water lines, drag in power cables and etc.

Clearly there would be only a few that would benefit from the development of this land: Fox River, the builder/developer, a few real estate agents and whatever stupendously rich and trophy property seeking people purchase the hilltop estates. Everyone else loses one of the only large and untouched pieces of undeveloped land in West Los Angeles.

Here's the thing...the owner of this land, or any land for that matter, is free to develop it as he or she sees fit as long as it fits in the parameters, zoning restrictions and guidelines that are set up but the locality. However, Your Mama asks...Does this mean that every good piece of land should be developed? At a blistering profit? We are of the opinion that the answer is no. Call us a pinko communist or whatever other silly thing you want, but having been raised in a part of Coastal California well known for its natural beauty, we are sensitive to the notion that healthy chunks of "nature" in its most untouched form are something to be maintained and preserved.

We can only hope that this 138 acres of rugged gorgeousness, which is arguably a part of every Angeleno's psyche, can and will be bought by some ridiculously rich Angeleno who will happily, gladly and generously offer to donate it to Griffith Park. Mister Broad? Mister Geffen? Where are you and your billionaire brothers and sisters on this one?

Homes Could Rise on Ridge... (Los Angeles Times)
Land Next To The Hollywood Sign For Sale (AOL)
Listing information (Teles Properties)

39 comments:

lil' gay boy said...

Number One: exercise the right of eminent domain to protect the parcel.

Number Two: investigate the Hughes Foundation sale; something stinks there.

Number Three: all us chilruns start digging deep in our pockets and pool our money together to buy it; we'll turn it into Mama's private aerie, with a small, inconspicuous, but tasteful cottage and leave the rest of the land open for us chilruns to run around on, with maybe a tiny guest house or two should Mama feel generous enough to invite us to stay.

Seriously, folks, this is the backdrop to one of the greatest cities in the world, equivalent to the NYC skyline; to develop it would be like selling the air rights over the Empire State Building to put up the largest pair of McDonald's arches on the planet.

There's plenty about this parcel that has been undeveloped for over 60 years coming on the market now that just plainly STINKS.

Alessandra said...

While I normally say that land should be used how an owner wishes, as long as those wishes fall within zoning ordinances, I strongly agree that this parcel should not be developed.

I say we lay a curse upon it so that any who try to so much as lay one cubic foot of foundation are struck down in fear and rendered silly.

Anonymous said...

There are conservation groups who purchase huge swaths of land just to protect them..... hopefully they see this parcel and can come up with the funds. Spread the word folks, this isn't just LA, this is an important piece of America....

Anonymous said...

keep it undeveloped I say.

On another note, it looks like Latrell Sprewell (The NBA player who choked his coach) is losing his house in foreclosure.

http://sports.espn.go.com/nba/news/story?id=3241444

now *that's* some sports reading even Mama would approve of!

john said...

There should be a protest about this proposed development. We should not let this out of state company do this to us.

Anonymous said...

There is a "Santa Monica Mountains Conservancy" that buys open land with the intent of keeping it undeveloped. There are always stories of the SMMC being corrupt, and only "saving" open land that happens to be next to expensive homes, etc. And there are stories of people getting insider information about land the SMMC is interested in, buying it first, then jacking up the price to sell to SMMC. I think the 22m price falls in that category.

Would eminent domain work? Sounds like something that would land the city/state/SMMC in years of litigation, all at taxpayer's expense.

Anonymous said...

I will bet 10 bucks that some out of state developer buys the land and hires some "high-end" architect like Richard (Dick) Landry to design 5 "gorgeous" Tuscan Villas and sells them off for 20-30million each. Very Sad if it happens...

lil' gay boy said...

Even if eminent domain did cost the taxpayers money, if it tied it up in years of litigation, that would certainly buy some time to come up with a more palatable proposal.

I think the money would be worth it, even if I'm not a California citizen and it wouldn't hit my pocket personally.

This is an iconic skyline and belongs to all Americans, not just Los Angelenos; remember how people felt about the NYC skyline after the towers fell?

sunny in sj said...

I don't think for one minute that the City of Los Angeles or a land conservancy couldn't have come up with the money to buy this. Someone got into a pissing match over this land or this whole deal is fishy. The City I think, can claim eminent domain and they can only pay what it is appraised at by an average of 3 appraisals. No one is going to be stupid enough to pay 3 times the appraisal, so don't look for that anytime soon. If in fact, the city could have had this for 1.7 mil then whomever runs their re-development agency, parks, or economic development departments should have their head examined. They better do something about this now, before a serious investor comes up w/7-10 mil and develops it.

luke220 said...

Wow- what a great spot for a Church of Scientology retreat.

lil' gay boy said...

Luke,

Please don't give "Crazy Cruise" any ideas; he has the funds to make it happen . . .

;-)

Anonymous said...

You would have to be a multi billionaire to buy this land and make it work for
estate development, first off it would cost over 200MM just to pay off the city officials, activists, and others to go away quietly, you would have to build an access roads to get crews, trucks up there to build these estates or a massive estate, not to mention you have to find a way to get enough electrical power up there to power up a few city blocks, solar power will not do that and you cannot put a solar farm up there you would also need plumbing, that will be a logistical nightmare in itself, with that said whomever buys it will be buying it for fame and recognition to save the land, not to make a profit, and I am sure they will build a small modern home that you could buid in a day, like this one, http://farm2.static.flickr.com
/1193/537120635_aa8d0b87f5.jpg the only in or out would be by helicopter, or a small access road that could be built in a week, there are to many politics involved in this one to make it work, I have friends who own acres and acres of land in malibu moutains and they are still underdeveloped because of these problems..... and they bought the lands over 20 years ago.

I am sure it will be bought and underdeveloped for another 20 years, that is until the technology catches up where you can build an estate in the sky without the trucks, crews, noise, roads built in a few days, just like on the computer simulation on their website, the construction alone will cause the neighbors in hollywood hills below most of whom come from old money, who all have deep pockets to stage massive protests for years, come to think of it they should not advertise it that you can build a massive estate or estates up there, because when you add up all of the negative factors and logistical nightmares ? YOU CAN'T.

and for the churches ? to build a retreat up there ? no shot.........

lil' gay boy said...

Anon 10:19,

Makes sense; God I hope you're right!

Anonymous said...

This isn't new news to Angelinos, the press may be making it sound like the city "just" found out the land was privately owned but there has been discussion about houses being built there for the past few years. The difference is the Fox River people putting the land on the market instead of developing it. There is water and power to Mount Lee, and there are access roads to the land so it isn't as big a challenge to develop the land as one might think. There is no bribing of city officials needed unless one wanted exceptions to the building code, like build 20 houses instead of 5.

I truly believe this is about leveraging the SMMC to cough up more money for the land than they have been willing (or able) to come up with. I'm torn on that as a homeowner in the hills because we (and not the whole city or country) are assessed taxes to put money in the SMMC coffers. I don't mind paying, I just think everyone in Los Angeles should have to pay, not just the people in the hills.

Anonymous said...

anon 5:34am

if it is such a good deal then why are they selling it at a very low price ?

the better question is why have they not been able to develop estates up there for the last 20 years? or quietly sell the land to someone else ? why do they have to post this on the mls ?

Hmmmmm said...

Anon,

I don't think 22 mill is that cheap. I agree that this is most likely a negotiating ploy to get more funds from the city for purchase. Eminent Domain is not likely a viable option here as the landowner still has the right to be compensated at a fair market value for the land. Listing the land publicly establishes a price that the City will have to work with.

I also agree that developing this will cost a fortune.

This happened about 20 years ago in VA at the Manassas Battlefields Sites. A developer bought a 200 acre site the National Park Service had been negotiating to buy as it is directly opposite the Manassas Battlefield Park. The developer then raced to put in sewer and water lines to get the development going. A few months later the NPS ponied up $40 mill for the site. Nice return on the investment huh. Sounds like a similar strategy here.

sunny in sj said...

The price listed does not establish what the city has to pay. They get 3 (or more) certified appraisals and average them to see what the land is worth, it doesn't have anything to do with what someone lists it for. Now if it were to sell for 22 mil and then the city tried to buy it, the appraiser would have to look at that, but appraisers could still appraise for less.BTW, No one will be able to get a loan for over what it appraises for either so they would have to pay cash. Banks and other lenders only loan money on what a property appraises for. Also, cities are usually leagally bound not to pay any higher or not very much higher than an appraised value.

Anonymous said...

appraisers are full of it, the land is worth 2MM tops, they lied throughout the real estate boom and now they are getting sued along with the lenders for their lies, there are real lawsuits already in motions against thousands of appraisers, lenders, brokers, loan officers, real estate agents on fraud...

my conclusion ?

the land was bought for a little under 2MM in 2002 with the normal appreciation of real estate in LA without the hype it is worth 2MM in 2008, 6 years later.

If they want to sell it for 20MM they need to get 5 estates built halfway and then advertise it.

right now it is land that should be untouched and whoever buys it may find themselves in a spider web of deceit and lies , that is unless they are another puppet master in the real estate game, but then again I do not think there are any left with money to spend.

Barren Karen said...

Something is not right here.

Even though a single, well located lot in LA can and still do sell for $5-15M, follow the fishy money trail on this one.

Anon 7:21...I know you're bitter and all...and that's cool. You have a right to your feelings about the state of real estate.

But let's not throw the baby out with the bathwater, okay? Not every appraiser, real estate agent, lender etc. is crooked liars and they're not ALL being investigated.

I do not think it would be difficult to find three honest and upstanding appraisers in all of West LA who could make a legitimate valuation of this property.

Anonymous said...

Anon 5:47,

I never said it was a "good deal".

The current owners have not owned it for 20 years, they have owned it for 5-6 years. As for why not even in the 5-6 years, they did go to the city and got approval (because the city couldn't come up with a legitimate reason why not) for 5 homes to be built. That was widely reported in the LA media a couple of years ago.

As I speculated and others have agreed, the public listing is very likey posturing to get the SMMC to pony up more cash than the SMMC thinks they can afford.

It is a hot potato in the sense that whomever develops it is going to be hated in Los Angeles (and from the sounds of the people here, all over the US). Ever heard the phrase "You'll never work in this town again"?

Anonymous said...

Anon 7:21,

15k an acre for land in Los Angeles? Not even close. The Fox River group did not pay market rate for the 138 acres in 2002.

If you recall Mama's post about 311 Mapleton (the house Ben & Jen looked at), check the listings for the property next door at 271. It is a 1b/1b teardown on a little less than an acre. Asking price? 15 MILLION.

Anonymous said...

Here's a comparison for Anon 7:21. The former Mark Hughes/Merv Griffin 158 acres reportedly sold for around 20 million in 2003. That is about 125k per acre.

Without getting into the arguement that in fact prices have NOT dropped to 2002/2003 values, and that this land has better views, 138 acres x 125k would be just over 17 million.

Anonymous said...

Having grown up in OC and seen first hand the beautiful open land turned into a cement city. I can only hope and pray that whoever aquires this property is generous enough to leave it "AS IS"
Sandlewood...

The Hollywood Mayor said...

No question the people that bought it several years ago are just greedy people (or smart businessman if you will) who want to make everyone worried enough to cough up a ridiculous amount of money. To a developer the land might be worth $5-10M but to the city the land is PRICELESS...

It will be tough to get utilities to the land, but not anywhere near impossible.

Nonetheless, you have to be a pretty uncaring and insensitive human being to build homes up there.

Anonymous said...

remember this real estate game is all smoke and mirrors, the truth will come out this year and there will be a panic of epidemic proportions.....
this one company is already selling brand new homes for a 50% discount in the outskirts of LA........

Anonymous said...

anon 12:55, go back to your "bubble bursting" blog.

This post isn't even about a house, just land. And has NOTHING to do with any decline in the market.

PS. Riverside County is not the "outskirts" of LA.

Linda Hoof said...

anon 12.55 have a drink and calm down we are not talking about Cleveland here.Stay on point CELEBRITY real estate you jerk!

sunny in sj said...

Kids, single lots or small acreage always, always sell for much more than per acre than large lots of land. So you can't compare a house lot with large acreage. It's apples and oranges.

Anonymous said...

linda hoof here is the link:

http://www.prnewswire.com/
cgi-bin/stories.pl?ACCT=
104&STORY=/www/story/
02-08-2008/0004752623&EDATE

this is brand new houses in CA
not cleveland.

idiot !!!!!!!!

Anonymous said...

Linda Hoof....

xuse me........

these are the houses 50% off, brand new in CA

to much to drink today.

jerkoff !!!!!!

Anonymous said...

anon 5:51, those may be in California but they aren't Los Angeles adjacent. And they are shite houses to start with. That is why the developer can't give them away.

you still haven't explained what the h*ll this has to do with land for sale.

so you are the "jerkoff" and "idiot".

Polly said...

Claws out,drinks on the bar!

Anonymous said...

what region of the hills is this land at?

Anonymous said...

anon .......

shite ? are you even in the US ????

Anyway my point is that some of those houses that are up for sale at a 50 percent discount are in the Los Angeles county line and this year or next year that land will be worth 2MM not 20MM it may even be worth 500k with still no buyers in site.

I myself would like to buy it and build a massive estate up there but after consulting with our legal dept, there is to much red tape to build and my conclusion is that it can't be done, it is and will remain brush land just like swamp land.

But who knows it may be sold this week to a royal family....

I have been wrong before.....

lil' gay boy said...

Barren Karen,

I agree with you 100% - something is fishy about this deal.

I'm assuming you're either a well informed local or did your homework; bottom line is that this deal stinks worse than three day old roadkill on a lonely Georgia two lane.

To put up houses on that ridge would be tantamount to putting party hats on Mount Rushmore.

Anonymous said...

I was talking to someone over the weekend who says the back story is that there was no access to the land when the group bought it. The group has either bought adjacent land or gotten an easement and that is the reason for the increase in value.

No One Special said...

you might be right about that anon 7:13...there is an access easement on the Wonderview Ave side of the property that was granted by the Dept. of Water and Power.

Which obviously does make it more valuable and all that, but is a 100 foot of easement worth $20M? It might be, but I'm not one for developing this land whether it's worth $20M or $100M.

Anonymous said...

I totally agree that it shouldn't be developed.

But that 100 foot easement means trucks can supplies in to build the 5 big mansions with the best views in LA. Those houses would be worth at least 20m each. And then the easement means the billionaires who buy the houses can get their limos and suvs up there to sit and look down on the rest of us.

I really hope it doesn't happen.

average flow-joe said...

I finished rolling my pennies and will sell the Yugo for cash. These crooks will take my $76.34 because it is cash and they won't have to report it. I'll build a big house with an electric fence that runs off solar power. I will be safe when the riots break out in los angeles when the housing goes back to 1959 prices.