Chasing Unicorns

Leaving Lake Riverside, Chapter 47: Pinon Hills Estates

This is the next chapter of my book, entitled Leaving Lake Riverside. To read the previous chapter, CLICK THIS LINK. For the next chapter (when available), CLICK THIS LINK. To start at the beginning, CLICK THIS LINK. Thanks for reading!

Pinon Hills Estates

After 1966, R.J. Beaumont & Associates took a long hiatus from new projects. I suppose Bob decided he had enough on his hands, maintaining Shelter Cove and Brooktrails, and so that’s where he put most of his focus.

But in 1969 all that changed. Beaumont decided to return to the place where it all began. The Antelope Valley. Maybe he was homesick. Here he started a new land development called Pinon Hills Estates. On May 25, 1969, a press release written by Beaumont appeared in The Los Angeles Times. Some of its journalistic and colorful sounding contents appear below:

“Beaumont Firm Opens High Desert Venture.

“Pinon Hills Estates, a planned, 2,800-acre investment-oriented, multi-use high desert area development of R.J. Beaumont & Associates, is now open, coincident with completion of improvements in another Beaumont project, Shelter Cove in Humboldt County.

“‘In many ways, with the opening of Pinon Hills Estates, we’re coming home,’ Beaumont said. ‘We began our operations with the sale and development of Antelope Valley land in the early 1960s.

“‘Then we refocused our efforts northward in 1965 in order to initiate Shelter Cove, which at that time enveloped the largest land map ever master-planned as a single unit in California.’

“Beaumont said the new project, 60 miles northeast of Los Angeles and 3,980 feet above sea level, will combine investment potential with conservation-recreation techniques applied by his firm at Shelter Cove and at Brooktrails Redwood Park in Mendocino County.

“The plan for Pinon Hills Estates, lying one-half mile south of California 138, calls for parcels priced from $5,000 to $15,000.

“Two-and-one-half-acre parcels will comprise 653 residential sites, 185 multi-residential sites, 23 commercial sites and 217 industrial sites . . .

“. . . Also, a $600,000 improvement bond has been posed with San Bernardino County to assure completion and high quality of the project. Improvements will include roads, graded equestrian trails and drainage canals . . .

“. . . The developer, citing the future role of the Antelope Valley as the ‘first aerometropolis in the world,’ said the ‘recreational aspects of the area cannot be overlooked.’

“. . . At Shelter Cove there are homesites, an airport, motel and golf course. The project, 27 miles east of Garberville, is a recreational-residential community with a contiguous conservation and aquatic park complex, including a three-mile, black-sand beach dedicated in perpetuity for public enjoyment.”

Notice how, in this press release, Beaumont relies on laurels he has given himself over self-proclaimed successes with Brooktrails and Shelter Cove? This pattern keeps repeating itself in future press releases for future projects.

As to the Antelope Valley becoming the first “aerometropolis” in the world, this is pure horseshit. Today, more than 50 years after he wrote this press release, there are no major commercial airports in the Antelope Valley. What the hell is an aerometropolis, anyway? I don’t know, but it sure sounds impressive.

Beaumont’s talent at marketing and sales came through again, with Pinon Hills Estates. Within 90 days, more than 50% of the lots had been sold, and within six months, more than 80% were gone.

That was success for Beaumont. But how about for the investor who bought his land? It can be hard to gauge the short-term success for investors, due to the long passage of time since Beaumont’s projects were initiated. And Google Maps cannot find the boundaries of Pinon Hills Estates, so it’s also hard to gauge the long-term success.

But Google Maps is able to find Pinon Hills, itself, which is a larger desert community that would most likely include Pinon Hills Estates. And in the year 2022, when I navigate to Pinon Hills, I see scattered houses on mostly dirt roads, in a sparsely populated desert. I see a little bit of commercial or industrial activity, but not much. And I see a lot of undeveloped land, so it seems to me very possible that the dreams of many investors at Pinon Hills Estates blew away in the dust, decades ago.

But as for the larger community of Pinon Hills, it is a census-designated area with a population in 2010 of 7,272, covering 32.1 square miles. That year it had 2,996 housing units, or 93.3 per square mile.

We can compare these statistics to the size of Pinon Hills Estates, which was 2,800 acres, or 4.375 square miles, according to Beaumont’s press release of 1969. Beaumont stated that it would have 653 residential sites and 185 multi-residential sites. That equates to a total of 838 residential sites, or housing units.

Dividing 838 housing units by 4.375 square miles, gives us 191.5 housing units per square mile. However, the housing units that actually existed at Pinon Hills in 2010 (93.3 per square mile) were less than half the density one would expect to have, from reading Beaumont’s press release more than 40 years earlier.

My assessment is that this was an investment that has appreciated slowly, and much more slowly than Beaumont implied in his enthusiastic press release. I wouldn’t call it a total failure, but those who initially bought property back in 1969 probably had to wait a very long time to see any positive return on their investment.

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Leaving Lake Riverside, Chapter 46: Recycling

This is the next chapter of my book, entitled Leaving Lake Riverside. To read the previous chapter, CLICK THIS LINK. For the next chapter, CLICK THIS LINK. To start at the beginning, CLICK THIS LINK. Thanks for reading!

Recycling

In 1967, R.J. Beaumont and Associates bought out most of the original developers at Shelter Cove and became the general manager of the Shelter Cove Development Company. What he paid for it, I don’t know. It wouldn’t seem like much, because most of the lots had been sold. Yet in 1968, he turned around and sold the assets of the company for a whopping $15.5 million.

This begs the question, why would anyone want to pay that much money for a development project that had very little land inventory remaining? To add to the mystery, Beaumont was elected president and board member of the company he just sold. Why would he still want to have anything to do with it, if there wasn’t much land left to sell? After all, his strong point was marketing and selling.

Several clues can provide possible answers. First, keep in mind that when Shelter Cove was first marketed in 1965, it was a 2,500 acre subdivision. But 1,250 acres had been reserved as “recreational, park, and conservation areas.” This was a selling point in the marketing. But this left only about 1,250 acres that could be divided into quarter-acre lots and put up for sale.

Lot buyers were promised that the remaining 1,250 acres were to be set aside, and never subdivided or developed. Yet it must have been very tempting to those who purchased the development from Beaumont, to find some way to renege on that promise. And why would they elect Beaumont president, unless he was the one who privately tempted them?

Another clue comes from a press release that appeared in The Independent Press-Telegram in Long Beach, on May 22, 1971. This release was published about five weeks before the fatal DC-3 crash, when Shelter Cove was preparing for a big sales drive. Here are some unusual quotes, written by Robert Beaumont:

“Shelter Cove is comprised of 2,640 acres of the most breathtakingly beautiful land in Northern California, ranging from the dechlorinated black sand beaches at sea level to magnificent wooded mountainside lots at altitudes of more than 2,000 feet.”

Dechlorinated? What the hell does that mean, to dechlorinate a beach? I don’t know. Perhaps this is just Beaumont and his razzle-dazzle license with adjectives, in an effort to impress the reader.

Aside from that weird use of a word, the thing that catches my attention most is the figure, “2,640 acres.” Originally there were only 2,500 acres in this development. How did they manage to produce an extra 140 acres? Maybe the answer lies with “mountainside lots at altitudes of more than 2,000 feet.” Shelter Cove Ranch was 5,000 acres when the Shelter Cove Development Company purchased it. I imagine the reason why the development was originally only half that amount, or 2,500 acres, was because the other half of the ranch was on land too steep to build on.

My guess is that Beaumont, with his aggressive approach to sales, figured he could glean about 140 acres of this steep terrain, up to about 2,000 feet of altitude, and convince people to buy it. Especially if they were buying it sight-unseen.

Another unusual quote in this press release that caught my attention is the following:

“Shelter Cove developers have dedicated 1,042 acres of conservation parkland with the community (more than one-third of the total land) assuring residents of conservation and recreational areas for all time.”

Wait a second, originally it was 1,250 acres (about half of the total land). Now, five years later, it’s down to just 1,042 acres to be preserved “for all time.” Apparently, about 208 acres were removed from the original conservation area and put up for sale. Add this to the 140 acres of mountainside land, and you get 348 acres. Subdivide them to quarter-acre lots, and you get 1,392 lots to sell. The cash selling price of these lots started at $4,000 each in 1969, but that dropped to $3,500 each in 1971. This indicates declining property values, much to the consternation of investors.

At $3,500 each, the minimum potential total would amount to about $4.9 million in gross sales.

That’s a hefty amount, but still, that wouldn’t come near to recovering the $15.5 million that investors had paid Beaumont, for the project. Well, there was 1,042 acres of conservation land remaining that could perhaps somehow be wrested away from preservation and put up for sale. That could easily pull in another $14.6 million revenue.

And there was one other thing. Hundreds of lots had been coming back to the company when disillusioned buyers had been unable or unwilling to make their payments. Beaumont may well have sensed an opportunity to buy these lots back from the bank for cheap, and then resell them. In fact, he may have envisioned a continuous cycle of recycled lots, providing a steady income for many years to come, where the company would provide financing, and then repossess whenever buyers defaulted.

This would explain why, on June 27, 1971, 20 salesmen from Lake Riverside Estates were flown to Shelter Cove in order to acquaint them with the product there. Apparently there was plenty of new product to sell, and plenty more product going out of and coming back into, the hands of the Shelter Cove Company, on a continual basis.

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