Sources: Forbes – By Zack O’Malley Greenberg | All Things Michael
In 1988, flush with the profits of Thriller, Michael Jackson purchased the Sycamore Valley Ranch for $17.5 million. Today, the Los Olivos, Calif. estate is known to the world as Neverland—and its value has changed even more dramatically than its name.
As FORBES first reported last night, billionaire Tom Barrack’s Colony Capital is preparing to place the 2,700-acre property on sale, six years after it took over a $23 million note on Neverland and became its managing partner. In an interview for my book, Michael Jackson, Inc, Barrack himself suggested the property could be worth as much as $100 million; other real estate veterans have similarly lofty views.
“There are only so many mega-properties,” said Southern California realtor Josh Altman, also in an interview for my Jackson biography. He believes Neverland could fetch $75-$85 million on the open market.
In order to fully appreciate the scope of Neverland, one must visit the sprawling sepia ranch in person. A two-and-a-half hour drive from Los Angeles, the latter portion of the journey occurs on treacherously twisting mountain roads; the property is nestled amidst 67,000 sycamore trees, at the foot of a 3,000-foot peak that Jackson named Mt. Katherine, after his mother.
Through the main gate, a mile-long private road winds up to the main house, a seven-room, thirteen-bathroom mock-Tudor with a backyard four times the size of Monaco. Jackson’s amusement park rides and his zoo were hauled off long ago (haunted by accusations of child molestation, he moved out of the property after being found not guilty of all charges against him in a well-publicized 2005 trial).
There’s still a swimming pool with an extra-high diving board, a miniature lake and a two-story edifice that once held Jackson’s vaunted video game arcade. Other buildings include a lakeside guest house, a full-sized movie theater and a redbrick replica train station, which sits atop a knoll with a massive functional clock made of flowers and the word “NEVERLAND” spelled in shrubbery on the hillside.
“Michael was Peter Pan, it was Neverland,” Barrack told me last year. “It was the only place I think that he actually found peace.”
To be sure, there are others who have placed a much lower number on the property than Barrack and Altman. Neverland has reportedly been valued at $30.3 million by Santa Barbara County, while a 2002 appraisal pegged it at $50 million.
For such a unique property, however, all it takes is one eager billionaire or wealthy entity to drastically drive up the price. Don’t expect Jackson’s estate, which still owns non-controlling share of the property, to buy out Colony.
“We are frustrated, bitterly disappointed and saddened that it has come to this,” said a representative from the estate in an email earlier today. “Sadly, Michael lost control of Neverland during his life as a result of advice from a former manager. The Estate explored numerous options, including a purchase, but financial, land use and zoning restrictions have made all of the proposed options prohibitive given our duty as Executors to be fiscally responsible in protecting and growing the assets of the Estate for Michael’s children.”
Colony would likely receive the first $50 million or so of any sale (to cover the $23 million note plus tens of millions plowed into the property’s upkeep over the past six years). If Neverland’s sale price is on the lower end of the spectrum, it’s possible that the estate might not receive anything; on the high end, though, Jackson’s heirs could receive a multimillion-dollar windfall.
In that case, Michael Jackson would also earn posthumous proof that his instincts in buying the property weren’t as outrageous as many observers once suggested: a sale of $70 million would represent a four-fold increase in value over purchase price.
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