Monday, February 23, 2009

The Stonehouse Mystery

Readers from the early days of The Tattler might recall an article we posted entitled One Carter - Stonehouse Auction: Can We Say White Elephant? The article talks about a real estate auction that took place on the front steps of the Pomona Superior Courts Building. I was there for the occasion, and I do recall it being damned cold standing outside those hallowed halls of justice while the auctioneer went through what seemed to be around 400 locations. Places that were in the process of becoming the former homes of the people then living in them. A very sobering experience.

But the good stuff did finally arrive, and the auction of the One Carter and Stonehouse properties was set to begin. The advertised 2-for-1 original price was $51 million, but I guess the representatives of Land America Default Services in attendance wanted to jazz things up a bit, because they set up what was for all intents and purposes a fire sale. The minimum bid for the One Carter Disaster was set at $19 million, with Stonehouse at $7 million. And this minimum bid nonsense was unfortunate because the $900 I had on me for the purpose of taking control of these properties was obviously not going to be enough. But had I been allowed to get in on the action I would have been the only one there doing so. Because on that cold and blustery December day, not a single solitary person put in a bid for either of those 2 properties.

So now it is late February, it is still cold, One Carter is still the White Elephant of the suckers holding the paper, and they're still pushing mud around up there. But what is up with Stonehouse? If you go to the Redfin.com site for properties sold here in town recently you'll notice something rather surprising. Scroll down to items 2, 3, and 4. Three different Stonehouse properties, and each was sold for the very same price of $7 million each. Or three times what the entire place was going for at auction last December! And check out the differences in the sizes of the houses. One is 1,212 square feet, another 5,700 square feet. Yet the prices are exactly the same.

Several people e-mailed me on this, including the person who first uncovered these mysterious transactions. And a person far wiser than I on these matters sent in the following:

"I opened the site I was sent and see now that these three different parcels with three different houses sold for $7 million each. How can that compute when they couldn't even get $7 million for the whole of Stonehouse last December? Two of the houses can be seen from Grandview and are on long lots that move northward from Grandview. The Heflin House is on the bigger parcel but the swimming pool is on the Grandview eastern most lot. My guess is that we will see three projects come forward for smaller developments that might be easier to finance."

I suppose the first step is finding out who exactly bought these properties. Then, of course, we'll have to let them know that they paid a hell of a lot more than they would have had they hung out with us in Pomona back before Christmas. And I did have $900 to contribute. But after that?

The symmetry of the buys in particular confuses me. Why would three distinctly different places within the Stonehouse suzerainty sell for the exact same price? Lucky 7s? I just don't get it. I'm throwing this one open to anyone who cares to weigh in. Anybody know what's up with this?

12 comments:

  1. Rear Window WatcherFebruary 23, 2009 at 7:14 AM

    There would have to be lots of dwellings on each site to recoup that money. Either crammed in with no yards as with the four postage stamp houses built across St. Rita's - and did former Planning Commissioner John Hutt's company build those? - or condos.

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  2. Obviously its all about the land and what the developer
    hopes to build there. Should be interesting to watch this
    one unfold. Finding out who the buyer is here is the big
    first step.

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  3. Doesn't the owner of that property, if they want to do any development have to build an adequate debris basin?

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  4. I attended a Stone House neighborhood meeting and someone said that before a single new structure could be built the county would require a debris basin. It was estimated that the debris basin would require 4,000 truck loads of dirt and be about 70 feet high.

    Does anyone know if the 2 acre min. would need to be met?

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  5. Pasta,
    I'm pretty sure the zoning would have to be changed if they want to change the 2 acre min.

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  6. The property in question was recorded 11/09/05 with the county.
    965 E Grandview sold for $4,588,164
    935 E Grandview sold for $3,322,400
    Vacant lot sold for $416,160
    1935 Stonehouse sold for $3,332,400

    It is possible that the information appearing on the Redfin site is more of a internal accounting entry by the company that owns the property rather than the sale of actual property.

    If it actually sold for $21,000,000 DP made a bucket of money.

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  7. So would that mean that this "development" is
    actually going nowhere, and all that's is being done here is a shuffling of the deck chairs on the Titanic?

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  8. Anon @12:17. Would Greg still make that money if he was bankrupt? Isn't it the bank that he hustled, Capital Source Finance in Maryland, that would make the money?
    Check out the new sign at the top of Baldwin.
    Despite what it says, the site onecarter.com isn't up yet.

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  9. No one know how much money Cap Source Finance loaned Greg and Company. The property would have been put up as security for the loan. Cap Source would prefer to have its money ...not vacant land. Cap Source is the one holding the bag. Greg got his money from investors and financial institutions. You can be sure he TOOK his.

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  10. Somebody refresh my feeble memory. What were John, Joe and our highly compensated City Atty doing running around that place during the "Scoping" process?

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  11. Sandy Levin was on the clock. Ka Ching. She did say she felt the city had a good position. DP was suing the city left and right. Some of it is still in litigation. It is always on the closed council agenda.

    Joe and John tried to appear concerned about the neighbors. Joe always thanks everyone for coming and being "part of the process."

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  12. Does he articulate just what that process is?

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