By Candace Jackson
The New York Times
From Our NYT Files: Would You Pay $1 Billion for This View?
A 157-acre hilltop plot in Los Angeles is being pitched as the city’s most expensive residential property ever.
LOS ANGELES — A property about to go on the market here consists of 157 acres of hilltop land in the coveted Beverly Hills 90210 ZIP code, a 10-minute drive from Rodeo Drive. With its 360-degree views, you can spot many of Los Angeles’s major landmarks in the distance, from Century City to downtown, and even — on a clear day — the Pacific Ocean. There are winding, private roads that lead to big, flat lawns the size of football fields. The asking price? A cool $1 billion. Aaron Kirman of Pacific Union Real Estate, the listing agent, recently drove a couple of visitors around the property, reeling off its numerous highlights and noting more than once that it was large enough to hold all of both Disneyland and California Adventure, another Disney park. (The site, which is in an area of Los Angeles known as Beverly Hills Post Office and has been newly branded as the Mountain of Beverly Hills, comes with permission to build nearly 1.5 million square feet of living space across multiple buildings.)With views into some of Los Angeles’s priciest mansions and their swimming pools below, it had the surreal feel of an empty, mountaintop golf course in the middle of a city, with large, manicured lawns kept green by plentiful sprinklers. As Mr. Kirman drove up toward the highest point, a helicopter buzzed by in the distance, not much higher than eye level. It’s debatable, of course, whether any potential buyers will agree with Mr. Kirman that this undeveloped plot is really worth $1 billion. Outrageous asking prices, particularly in Los Angeles, are nothing new. A $500 million listing for a speculatively built 100,000-square-foot home on a four-acre hilltop in Bel Air is the city’s record-setter so far. (That home hasn’t officially hit the market yet but is being shopped around at that amount as construction wraps up.)
Such price tags are often a way to grab attention rather than a true indicator of market value. If mega-expensive properties sell at all, it’s often for a mega-discount. Take the $100 million sale of the Playboy Mansion in 2016 — Los Angeles’s most expensive home sale at the time. That was a 50 percent discount off the $200 million asking price. Mr. Kirman said the $1 billion price was justified partly because it would be impossible to assemble so much acreage in such a prime location ever again. “This is a crown jewel,” he said. “For that billionaire who wants that privacy on the highest peak of Beverly Hills, it’s a great opportunity.” Mr. Kirman is going to have to sell someone on the idea that plunking a billion dollars into a personal property is a good idea. No one has yet to come close to crossing that threshold, at least not publicly. In 2014, an 18-acre oceanfront Hamptons compound sold for $137 million — the record for a single-family home in the United States. This year, a Malibu property sold for $110 million, Los Angeles County’s current record. A Saudi prince paid $300 million for a property in France, thought to be the highest price ever paid for a home in the world. All these properties included houses. This Mountain of Beverly Hills does not. (Up to now, the most expensive vacant properties for sale in the area were 120 acres in Beverly Hills that the Microsoft co-founder Paul Allen listed this month for $150 million and a 97-acre lot nearby that is listed at $250 million. Both have yet to find buyers.)
Prices ‘Never Seen Before’
Billy Rose, a co-founder and the president of the Agency, a luxury real estate brokerage that is unaffiliated with the billion-dollar listing, said flat lots in the priciest neighborhoods of Los Angeles and Beverly Hills could go for nearly $20 million per acre, and higher if they have views. “We’re seeing prices for land that we’ve never seen before,” he said. Over the past decade or so, Los Angeles’s luxury real estate market — which, until recently, was considered a bargain compared with other global hubs, like New York and London — has been experiencing an unprecedented boom. The city is increasingly a draw for wealthy buyers looking for properties that have plentiful indoor and outdoor space. “You can have a palatial estate here,” Mr. Rose said. “You can’t buy land like this in other major metropolitan cities. Here you can have your house and your car and your garage.” With so much money pouring into Los Angeles, large estates that were divided into smaller lots in the 1950s and ’60s are being reassembled, said Jeff Hyland, of Hilton & Hyland, who has Mr. Allen’s listing. But unlike properties during previous booms, the priciest today are often out of reach for Hollywood stars. Billionaires and tech titans are the new trophy estate buyers, said Mr. Hyland, who is also the author of “The Legendary Estates of Beverly Hills.” Recently, Jeff Bezos, the Amazon chief executive, paid $12.9 million for his neighbor’s half-acre, bringing his estate to a total of 2.5 acres. Stephen Shapiro, the president of Westside Estate Agency, said that the market for properties above $60 million was particularly strong but that the Mountain of Beverly Hills was wildly overpriced. “For a billion dollars, you could buy it multiple times,” he said, adding that he had gotten feelers that suggest $200 million might be within negotiable reach. (Ronald Richards, a lawyer who represents Secured Capital Partners, the current titleholder on the property, said such queries were a common way for lenders to get a sense of whether their debts could quickly be recovered if necessary, not an indicator of the property’s market value.)
A Spreadsheet of Potential Buyers
Though this prime parcel is zoned for six lots, Mr. Kirman is marketing it as a family compound for a single buyer. Pulling out a color-coded spreadsheet that he said included the names of about 2,800 billionaires, he explained that by his calculation, roughly 50 to 100 of the people on that list would be in the market for such a property — Middle Eastern royalty or a Russian oligarch being a few of the possibilities he bandied about. (It’s unlikely that a developer would be able to make enough money by subdividing such pricey land and building multiple nine-figure mansions to justify the risk.) One challenge: The buyer will have to come with not only an extremely high net worth but also some vision. “To be impressed by dirt is hard,” Mr. Kirman admitted. Another challenge: This dirt has quite the history. Decades of legal battles, scuttled mansion plans and huge egos partly explain why such vast, beautiful piece of land in the middle of one of the hottest real estate markets in the country remains vacant. Known until recently as the Vineyard Beverly Hills, the property has been the subject of so many lawsuits and ownership disputes that even the lawyers seem to have lost count. Celebrities, including Tom Cruise, have tried to buy it in the past. Previous owners have drawn up grand plans to build homes, never to follow through. In the late 1970s, Shams Pahlavi, an Iranian princess and the older sister of the last shah of Iran, bought the land and made plans to build a giant estate for her family. But in 1979, in the midst of her home country’s revolution, Iranian students in Los Angeles stormed another property she owned in the area, throwing firebombs. That, along with the death of the shah in 1980, prompted her to abandon the plans. In 1987, Merv Griffin, the talk-show host and game-show producer, bought the property with the goal of building a home that would be slightly larger than the producer Aaron Spelling’s mansion — the largest in Los Angeles at the time, with 56,000 square feet. But he, too, eventually abandoned his plans and sold the Vineyard for $8.5 million in 1997 to Mark R. Hughes, the founder and chief executive of Herbalife. Mr. Hughes, like the owners before him, planned to build a grand home with a bird’s-eye view of the celebrity estates below. In 2000, at 44, he died from an overdose of alcohol and antidepressants. Mr. Hughes had put the property into a family trust, and the sole beneficiary was his son, an only child who was just 8 when his father died.
In the years since, the trust’s handling of the property has prompted numerous lawsuits and legal challenges. In 2004, the trustees lent money to an Atlanta developer, Charles Dickens, to buy the property for no money down. Public records show the land sold for $23.75 million. Mr. Dickens, along with Victorino Noval, a philanthropist who, in 1997, pleaded guilty to tax evasion and mail fraud charges and spent three years at a federal prison, managed the property through a limited liability company for over a decade. They obtained approval to build multiple homes, but they never did. The Mark Hughes Family Trust remained a lender on the property, though its original trustees were removed after a lengthy legal battle, largely as a result of their mismanagement of the Vineyard, according to court documents. (Mr. Dickens couldn’t be reached for comment. Victorino Noval did not respond to requests for comment sent through his personal and family foundation websites.) In 2015, in the midst of bankruptcy proceedings, Mr. Noval and Mr. Dickens tried to sell the property — briefly shopping it around for $1 billion without officially listing it. They abruptly stopped after The Hollywood Reporter ran an article detailing the property’s legal woes.In recent years, the land has been the site of a handful of high-profile events and parties, including Rihanna’s 2014 Diamond Ball, attended by celebrities like Brad Pitt and Kim Kardashian, as well as Oscar parties and other benefits. Public records show that it changed hands most recently in July 2016 when Tower Park Properties L.L.C., which lists Mr. Dickens as an officer, transferred the property to Secured Capital Partners, a separate limited liability company managed by Mr. Noval’s son, Victor Franco Noval. Mr. Richards, the lawyer for Secured Capital Partners, said the elder Mr. Noval was no longer involved. His son took a management role because “it was such a mess that only someone with inside knowledge like a relative would have the sense to say, ‘This is a good business risk,’” Mr. Richards said. He said Secured Capital Partners had spent “millions” upgrading the property’s infrastructure, but declined to offer specifics. Victor Franco Noval declined to comment.
Partly to emphasize the property’s fresh start, the new ownership changed the name from the Vineyard to the Mountain of Beverly Hills, since it is so large that it’s visible from the flats of Beverly Hills (and because there is, in fact, no vineyard on the property). Mr. Kirman said “authenticity” was going to be a big part of the branding. Mr. Kirman said he had reached out to five of the billionaires on his list and planned to fly to London, Qatar, Russia and China to meet with as many of them who are already in his network as possible. “Everyone so far has been super intrigued,” he said. He added that in the next few weeks he’d be commissioning a designer to build a large glass cube on the property where he can entertain potential buyers, and that he was considering ways to allow qualified billionaires to spend a night there, possibly Bedouin-tent style. The next owner of the property, Mr. Kirman said, will most likely come from overseas and be looking to make a splash with a bold purchase. “I think the price will make someone quite well known,” he said.