Wednesday, December 2, 2009

Has The One Carter Curse Gone Global?

In the last week or so we've all been hearing quite a bit about the financially stricken Emirate of Dubai and the effects their woes have had on the international stock markets. A place that pumped hundreds of billions of dollars in borrowed capital into a vanity building boom that has now gone bust in a historic sort of way. Or at least as historic as all the other poorly run governments, businesses and banks who borrowed heavily a few years back in order to finance developments that nobody ever wanted to call home. Like Colorado Commons in Monrovia.

Here's how this particular disaster is described in a Newsweek Magazine article called The Lehman Brothers of the Persian Gulf:

Like Lehman, Dubai made the mistake of borrowing short-term to buy long-term illiquid assets. The holding companies Dubai World and Nakheel borrowed tens of billions of dollars from global capital markets and used the funds to buy stakes in Cirque du Soleil and Barney's, yacht businesses, financial services companies, and, above all, real estate. In much the same way, Lehman plowed its hundreds of billions of borrowings into illiquid investments such as commercial office buildings and apartment complexes.

And, as I'm sure some longtime Tattler readers will recall, one of the places Dubai parked some of that poorly invested money was, you got it, One Carter. Here's how we broke it down last December in an article entitled One Carter Bailout Unlikely --- At Least From Dubai:

As we noted in previous articles, the Dubai (United Arab Emirates) based ownership of John Laing Homes - the international developer known as Emaar - now finds itself saddled with a bit of financial dead wood right here in our little city. As erstwhile interest holder in the One Carter Estates property, Emaar now finds itself facing the possibility of having to swallow this highly leveraged piece of muddy real estate. A holding that they couldn't even give away at auction last week.

Of course, the Guys From Dubai later went on to walk away from this troubled semi-vertical dirt patch, leaving the unfortunate lender, Capital Source, to try and make something out of the mess.

(As an aside, if Brad Pitt had been a Tattler reader he could have seen the Dubai disaster coming, and wouldn't be facing the kinds of losses he is threatened with now. See an article regarding Brad's disastrous Dubai debacle here.)

Now there is an alternative theory to what has happened to Dubai. Because it could also be the very same thing that happened to the previous despoiler of this stricken property, the now nearly invisible Dorn Platz. And that is both might have fallen victim to the One Carter Curse.

Now I will admit that this is a highly controversial theory. And a few have contested its validity. But there are also those who firmly believe that One Carter Estates sits right on top of a Gabrielino/Tongva tribal burial ground. The matter did come up during the ill-fated hearings here in Sierra Madre some years back when the now infamous Gang of Four City Council enabled Dorn Platz's rape of what was up until then a near pristine hillside forest.

And even if it isn't a Gabrielino/Tongva burial ground as some claim has been proven, how can we say that it wasn't a final sacred resting place for some of the previous inhabitants displaced by this tribe centuries ago? The Chumash for instance? Or some unknown peoples who came before? Maybe those mountain inclines aren't the only bad Feng Shui here.

Given what has now happened to both Dorn Platz and the Emirate of Dubai, I can only surmise there might be some forces at work here that are awfully upset with these guys. And their respective dismal financial fates must be something quite discomfiting to those now being so supernaturally chastised.

To which I can only add one other thing. Capital Source? You didn't by any chance put a lot of cash into condos and office buildings back around 2005, did you? Along with that money you invested in One Carter?

Because if you did, then you could very well be the next in line as a victim of the One Carter Curse.


  1. of one thing i am sure. one carter sits on the recent burial site of millions of greenbacks.

    i took a walk up there with the dog last week. the views are spectacular. but the lots are tiny. at this lot size and price it will be impossible to build the requisite monument to bad taste that any self respecting buyer into a project such as this will require. and who would be the first to leap into this cesspool? it seems the best we can hope for is that some developer will buy all of the finished lots and build a new jameson court with a view. bummer.

  2. I don't know much about curses, but One Carter sure looks
    like it has been possessed by something.

  3. Cap Source should have done their homework before they loaned the money to Dorn Platz and his multi-tiered LLCs. If they had, they would have found out about all the messes he had created. One only needs to Google Dorn Platz to realize he doesn't pass the smell test. I don't feel sorry for them at all. Or for Brad Pitt either.

  4. One things for certain, something must have possessed Rob Stockley, John Buchanan and the rest of the developer doormats when they gave Galletley the go ahead to destroy One Carter. One of their worst mistakes, and that is saying a lot.

  5. I like the Brad Pitt part. Anything to amp his star status, just like the shotgun deals he's got going in New Orleans as a so-called "environmental developer". Comes back to bite ya.

  6. John Buchanan, along with Stockley, Torres and Joffee voted to end the possiblities of acquiring any more of 1 Carter as Open Space--40 acres had already been bought by the Sierra Madre Mountain Conservancy in 1995. Buchanan knew the night of the vote on the 1 Carter tract map that Sierra Madre Mountain Conservancy's board members Caroline Brown and Marguerite Shuster had written a letter requesting assistance from the Santa Monica Mountains Conservancy. The result of their efforts was an agenda item for a grant of $20,000.00 for a feasibility study on what could actually be supported on the hillside at 1 Carter. The item was removed from the Santa Monica Mountains Conservancy agenda because these four members of the Sierra Madre City Council voted to approve the tract map the night before! George Maurer voted no!

  7. Environmental developer. Now there is an oxymoron. Kind of like a caring concentration camp guard.

  8. More like shacks on steroids

  9. Wild. Kind of like car ads where they throw around the word 'green.'

  10. One Carter- bad Feng Shui+ a curse by the Indidans that will rival the curse of the Egyptian tombs. We may be seeing this on the History Channel some day.

    I remember a resident up there near the property, who is of Native American descent
    was seen chanting and waving an eagle feather at the people cutting down the trees.

    This sounds pretty far out....but why am I not laughing?.........

    I'm convinced bad luck will follow all responsible for that crime against the land up there.

  11. They have ripped out traditional pathways for wildlife.
    Before any people, the original inhabitants had that land, moved through that land, lived off of that land.
    There's an accounting in store for that, too.

  12. 7:17, I've noticed the same thing about those lot sizes. I'm no expert, but they look really small for the 4000+ square feet houses that the various developers have fought to squeeze in there. It's going to be crowded, at least on the part you can see from the street.

  13. One Carter is a symbol in Sierra Madre of what bad government can do to a town. We must never let those people gain control again.

  14. All Tattler readers in Sierra Madre must unite, and fight special interest/government types who will try to slip onto the city council.

    Let's all stand up for Sierra Madre!

  15. Sir Eric, as you wrote before, let's recall that Brian Sosner is Capital Source's guy for trouble.
    From the CS website:
    "Mr. Sosner is primarily responsible for managing a portfolio of troubled real estate assets and implementing a special servicing asset management operation for all nonperforming classes of commercial real estate and real estate owned as well as procedures to turnaround, reposition, and/or liquidate such assets."
    Ya gotta wonder just where that big Crater will fit in his activities.

  16. FR - but you got to throw this into the mix. If 1 Crater is not expected to do much, why all the money being spent there? Everyday its just a regular beehive of salaries. And are they really taking orders on those pricey lots? Or are they just trying to avoid being labeled a losing proposition?

    1 Crater really does have its mysteries.

  17. Now why would anyone think that One Carter Estates would fall into the non-performing category? Could it be that the outlook for selling all those tightly packed together lots might not be the draw that Greg Galletly once dreamed they would be? People could buy a couple of lots to build their dream homes on. Surely someone wants to buy that barn & McComber cabin lot, to have a couple of historical structures snuggled up to their mansion. There was a rumor a while back that one man had bought the East Ridge - 2 or 3 lots there, under one man's ownership. Wonder what kind of structure all those lots would entitle him to. The developers said they've had plenty of interest in their lots the last time they spoke at the council.

  18. Yeah, but don't they have to say they have a lot of interest? Given the history of the place they have to be battling the perception of failure that has hung over the site since the days of the Dorn Platz Tree Removal Service was there. Particularly if they expect to get the kind of prices they're asking.

  19. 1:38, it is mysterious, isn't it?
    Obviously CS is hanging tough and selling lots.
    Or are they just forced to do everything they're doing or forfeit some very big bonds the city demanded?
    Maybe it's cheaper for them to finish the infrastructure than pay penalties.
    Who knows.
    My question would be are they telling buyers about the multiple hazards they'll face.

  20. How about Stonehouse? Any news there? Remember Capital Source financed all Greg's pet projects here. Maybe elsewhere too.

  21. If Capital Source was funding Greg Galwotly's projects, you can only imagine what their standards were back then in the 2003 to 2006 time frame. That's pretty much the time banks went insane, and why we're looking at a commercial property fiasco now that will make the housing crisis look like beanbag.

  22. didn't cap source say they would be finished with landscaping by now? have they even started?

  23. Maybe they have a grant. And since it comes from our state taxes we should all be happy about it.

  24. 1:57

    There is a CRASH coming to the commercial real estate sector that will make the mortgage thing look tame.
    Now is the time for the Mountain Conservancy to step in and buy the west ridge for starters.
    Caroline Brown? Time to make another offer.

  25. when i was in college i worked for a contractor who worked for bonding companies to complete abandoned infrastructure projects. we finished streets, utilities and the like, but did not build houses. i suspect this is why they are completing these items on lots they have ZERO chance of selling. sandi siraganian, please phone home.

  26. If they had sold any lots, wouldn't it be recorded somewhere the public could see it?
    Some realtors' information list?

  27. we all do know that the homeowners at One Carter will be suing the city at some point after a mudslide or fire destroys their properties

    i wonder if the real estate agents have to disclose that the area is a hazard?

  28. 5:06, they have to disclose a bunch.
    The Tattler had an article about that. Something about the Luxury Death Trap of it all.

  29. Not a Realtor, just informed.December 2, 2009 at 7:19 PM

    It's called a NHD, Natural Hazard Disclosure, and the best report in southern Cal comes from a company called Property ID in downtown Los Angeles, and nothing is public until it is recorded.

  30. Good information Just Informed.
    So would you happen to know if something can be sold, and not recorded?

    Also Tattler readers, the article about the disclosure items necessary for One Carter is in the archives. Friday July 3, 2009,
    "One Carter: Sierra Madre's Luxury Death Trap?"

  31. One Carter land was called "The Triangle of Death" by an astute canyon resident several years back when they wanted to build a HS (or so they said at the time).
    The TRIANGLE OF DEATH....Earthquake, Fire, Flood.
    I think it's actually the QUADRANGLE of BAD LUCK.
    Earthquake, fire, flood and bankruptcy.
    If a natural disaster doesn't wipe you out, a financial tsunami will.
    Who would want to spend big $$$ for a McMansion on a postage stamp lot, sort of a McMansion ant colony?

  32. Anyone know what happened at the SCAG meeting tonight.
    I hope our Mayor and Mayor Pro-tem went to that meeting!
    I suspect they have a plan and it may not be good news for the SCAGGIES.
    MaryAnn and Don are too smart for them, even if there great leader is a former Soviet Union "planner/transportation czar".....roll eyes.

  33. Not a Realtor, just informed.December 3, 2009 at 6:22 PM

    I believe there has to be either a transfer of Title, and, either or, a transfer of Trust Deed. If any Realtors are reading this blog please correct if wrong. can order a Natural Hazard Disclosure on your own from Property ID for any area in So.Cal, there is a fee involved, not sure what they are charging these days, you do not have to be an "Industry Professional" to order one.