By John Gittelsohn and Nadja Brandt July 31, 2014 12:56 PM EDT 6 Comments Facebook Twitter LinkedIn Save
Neverland Ranch, the Los Olivos, California, property where the late entertainer Michael Jackson lived, may soon get a new owner. Thomas Barrack Jr.’s Colony Capital LLC is readying the estate for a sale as high-end home values return to peak levels in the area. “We’ve really just been custodians of an irreplaceable estate and are proud to say we’ve restored it to the original elegance Michael first envisioned,” Barrack said in an e-mail yesterday. “We are now considering putting it up for sale.” Barrack wouldn’t give an asking price for the ranch. His Santa Monica, California-based firm took control of the property after buying a $23.5 million note on it in November 2008, when Jackson faced mounting debts and the real estate market was in free fall. The ranch is assessed at $30.3 million by Santa Barbara County, a value limited to 2 percent annual increases under California tax laws. The estate, about 130 miles (210 kilometers) northwest of Los Angeles, was named after the island in J.M. Barrie’s story of Peter Pan, a boy who never grows up. The 2,680-acre (1,085-hectare) property is in the Santa Ynez Valley, a region known for wineries where the 2004 film “Sideways” was set.
Jackson, known as the King of Pop, acquired the ranch from golf-course entrepreneur William Bone in 1988. The musician turned it into a combination amusement park and zoo, where he entertained fans and was frequently seen with his pet chimpanzee Bubbles, who now resides at a sanctuary in Wauchula, Florida. The singer stopped visiting the ranch after it was searched by police investigating allegations of child molestation, leading to charges for which Jackson was tried and acquitted in 2005.
[eap_ad_1] He died in 2009 of cardiac arrest and acute drug intoxication at age 50 while preparing for a comeback tour. Entertainers and foreign investors have shown interest in Neverland, which Colony wants to remain “an enduring tribute to Michael Jackson,” Barrack said in the e-mail. Because the property is zoned for agriculture, it would require approval to be subdivided or turned into a tourist attraction similar to Elvis Presley’s Graceland home in Memphis, Tennessee. “It’s not a development opportunity,” Barrack said in an interview last week at Bloomberg’s Los Angeles office, adding that it would be “very, very difficult” to rezone Neverland. “It’s not Graceland. It’s not a subdivision.”
Real estate values in California are surging. The number of homes in the state selling for more than $2 million set a record in the second quarter, while sales of residences for at least $1 million were the highest since 2007, property-information service CoreLogic DataQuick reported today. “Luxury-home buyers have substantial assets, and they’re constantly evaluating where to park those assets,” Andrew LePage, a DataQuick analyst said in a statement. Prices for real estate in the Santa Barbara area, especially higher-end properties, have recovered to almost their pre-bust peak in 2007, according to Thomas LePley, a broker associate with Berkshire Hathaway HomeServices. LePley, whose Los Olivos office is about 6 miles from the Neverland gates, said he hadn’t heard the ranch is on the market. Cleaned Up “I’d say it’s worth $35 million to $50 million, depending on what they do with it,” he said in a telephone interview. “Barrack has cleaned it up and returned it to perfect condition. It had been neglected.” The Jackson estate is “saddened at the prospect of the sale of Neverland which, under the agreement negotiated during Michael’s lifetime, Colony has the right to sell,” the estate said in an e-mailed statement. “We hope and trust that any new owners of Neverland will respect the historical importance and special nature of this wonderful property.” Jackson’s record sales were led by his 1982 album “Thriller,” which along with The Eagles’ “Their Greatest Hits” tops the Recording Industry Association of America’s all-time best-selling list at 29 million copies. Within 18 months after his death, his estate reported that it collected $310 million from music, merchandise sales and its share of publication rights on a music catalog that includes songs by the Beatles, Elvis Presley and Jackson himself. Colony Capital, founded by Barrack in 1991, has about $20 billion in assets under management, with investments in real estate, mortgage financing, casinos and the film company Miramax. Neverland Ranch “has not only the beautiful spirit and softness of Michael, but a legacy of a thousand years of Indian culture that had transacted upon it,” Barrack said in a 2011 Bloomberg Television interview. “So we’ve just been restoring it, renovating it. We have not really wanted to do anything commercial with it.” (Bloomberg)