Sunday, 8 April 2012

Fair warning in The O.C.


The bankruptcy sale of One Pelican Hill Road North, Newport Coast

Listed most recently at $37,000,000, a price some 42% below the original asking price, One Pelican Hill Road North in Newport Coast in California, must be one of the most expensive bankruptcy sales currently on offer.

One Pelican Hill Road North, Newport Coast, Newport Beach, Orange County, California, CA 92657

Formerly known as the “Villa del Lago” or “Villa of the Lake,” One Pelican Hill Road North stands in 12.47 acres and includes a 17,706 square foot Italianate mansion with 8 bedrooms and 17 bathrooms. Additional features number staff accommodation, a gatehouse, garaging for 17 cars, a 1-acre lake with terraced waterfalls, a tennis court, stabling and a riding area and a private vineyard with a wine cave. A highlight is said to be the 644 square foot “car salon” and “guy’s entertaining area” designed to display trophy autos that comes equipped with plasma screen televisions.

Developed by Monarch Estates, founded by leading local realtor John McMonigle, views from the property are of said to be of the “city lights” but only of the ocean “on clear days.” Many argued that this was one of the key reasons that the house has failed to sell.

Two aerial views of One Pelican Hill Road North

Originally brought to the market at $87,000,000 ($4914 per square foot) in February 2009 through McMonigle’s realty agency McMonigle Group Inc., the price of the hilltop Villa del Lago fell to $57,000,000 in May 2010. By June 2010, rival agents were questioning how well the property competed with other less pricey homes with better ocean views and beachfront settings and Michael Gosselin of Surterre Properties noted that: “Newport Coast has yet to see any homes sell for more than $20,000,000, let alone $57,000,000.”

October 2010 brought further developments when the La Jolla Bank, which had financed the project, went bust. As a result of the transfer of the bank’s assets to the OneWest Bank, Monarch Estates were forced to curtail a lot of the luxuries they had planned such as a swimming pool and home theatre. Of this, McMonigle commented:

“When we realised that the lender would not fund all of the line items we had planned, we pared back. Instead of making it turnkey and furnished with accessories, we’re doing what a lot of spec builders do, leaving it to the buyer to pick wallpaper, finish the theater [sic] and do it to the buyer’s specifications… We got it to a marketable state.”

Agent and developer John McMonigle

By January 2011, it was reported that three cash offers for the Villa del Lago had been received but all were below $37,000,000 ($2090 per square foot). Presumably because the land alone had cost somewhere in the region of $3,200,000 in 2003 and in addition there were five mortgages that included £27,30,000 in construction loans, these were not accepted. Within weeks the price was slashed by a further $20,000,000 to $37,000,000, a figure that McMonigle claimed would attract: “A timely sale… [and] get agent and buyers’ attention.”

By April 2011, and in part due to the impact of the failure to sell the Villa del Lago and three other properties developed by Monarch Estates, John McMonigle filed for bankruptcy as an individual. In a brief statement at the time his spokesman commented:

“In a necessary move brought about by an ongoing stalemate with uncooperative lenders in an unrelated real estate development business, John McMonigle, founder and principal of Newport Beach-based luxury real estate firm, McMonigle Group Inc., has filed for Chapter 7 bankruptcy protection.”

“We have worked hard with our lenders to try to restructure and work out this debt with little or no cooperation. The filing will allow us to maintain a laser-sharp focus on our real estate sales brokerage business, McMonigle Group Inc., which will continue normal operations.”

June 2011 saw Mr McMonigle cease to be involved with Villa del Lago. By September of the same year, with a new manager for the project, Corey Gulbranson, it was decided to ditch a name that had become associated with failure and identify the estate just as One Pelican Road North. Of the move, the new agent for the property, Rob Giem of the Hôm Group, said:

“For various reasons, simply referring to the property by its address has allowed us to move forward with its marketing free of prior associations and impressions from other’s marketing efforts.”

Internal shots of the property

Plainly the new marketing campaign did not achieve the desired result and though the agents blamed issues with “slow-moving bankruptcy-court paperwork,” no buyer has been forthcoming.

One Pelican Hill Road North’s tennis court and 17-car garage

Now being promoted as being priced at: “far below replacement cost, the compelling value and singular opportunity of this offering will never be equaled in Orange County,” One Pelican Hill Road North is being offered for auction.

In their advertisement, the Hôm Group state that “no opening bid” is sought on Thursday 26th April 2012 when they attempt to sell the property at 7pm.

It’ll be fascinating to see if Orange County’s number one white elephant will actually sell and what price it ultimately achieves.


For more information on the McMonigle Group, go to: http://www.mcmoniglegroup.com

Follow John McMonigle on Twitter at: http://twitter.com/JohnMcMonigle

Viewing arrangements are most specific with the Hôm Group hosting a “luxury open house” on Sunday 22nd April from 12 noon until 4pm. They instruct interested parties as follows:

“All guests must check-in at The Resort at Pelican Hill prior to home tour. Upon completing registration, guests will be offered a 45-minute agent guided tour of this incredible property. Please park at The Resort at Pelican Hill. Guests will be provided complimentary shuttle service to and from the property.

3 comments:

Seth said...

It is not in a good location and it was never worth the figures quoted. Plain and simple: that's why it didn't move.

Christina said...

It looks like a TESCO crossed with Matalan. Yuck!!!!!

Glenda said...

I'd buy it... I'll offer $1.