Klein Focusing on Estates Now, Not Super Bowl

At an age when most men think about retiring, former San Diego Chargers owner Eugene V. Klein has traded his football helmet for a hard hat.

He is developing 150 of the 420 acres he owns in the San Dieguito River Valley, and part of his development, a residential community, is previewing this month, starting today.

The grand opening will continue throughout the month, culminating--appropriately--with Super Bowl Sunday, Jan. 31. As Joan Reid, vice president of marketing for Del Rayo Downs, pointed out, “Gene Klein was instrumental in bringing the Super Bowl to San Diego.”

Focusing on Development

However, Klein isn’t focusing anymore on football.

His eye is on his Del Rayo Downs--65 one- and two-story, gated and guarded 2,500- to 4,080-square-foot homes priced from $545,000 to $775,000--and his Del Rayo Estates--23 1.6- to 13.2-acre estate sites, which are priced from $575,000 to $2 million. Klein is planning to build a $3-million spec home there.

He is also planning a five-acre commercial project to service the residences. Construction is due to begin there early next year.

“Del Rayo is a very exciting project for me,” the 66-year-old Klein said at his offices there, “but it is a one-time thing. I’m not a developer per se.”

Klein, who made a fortune as a San Fernando Valley Volkswagen/Volvo dealer and then as head of National General Corp. (formerly National Theatres and Television) before he bought and sold his major interest in the football club, considers himself more of a horse breeder/racer and art collector than a developer.

When he talks about his development, though, he expresses the same zeal that made him a success even as a door-to-door encyclopedia salesman during the Great Depression when he was a teen-ager in New York.

“When you can wake up every morning and have breakfast while you watch the horses train and their babies learning to run, well. . . .” He took a breath and smiled. “That has to be the most unusual real estate development I know.” A thoroughbred training center owned by Klein and famous horse trainer D. Wayne Lukas is the focal point of Del Rayo.

Klein bought the property in 1984, the same year the Olympic Equestrian Endurance Event was held at Fairbanks Ranch Country Club. Klein’s 420 acres abut Fairbanks Ranch, a nearly 10-year-old, 1,237-acre luxury residential community.

Looking down from his twin-turbine Sikorsky S-76, a $4.5-million helicopter, Klein described Fairbanks Ranch as “one of the most successful developments ever.”

From the air, Stephen Games, president of Pickford Realty (named for Mary Pickford), gestured toward the ranch, noting that it was once owned by actor Douglas Fairbanks and Mary Pickford. “Del Mar was founded in part by Bing Crosby,” he added. The famous crooner once owned the Osuna Ranch there.

More recently, the San Dieguito River Valley has seen the development of golf, tennis and polo facilities as well as homes that appeal to what Games termed “world-class executives and successful doctors and lawyers.” Many fly their own planes into Palomar Airport, a few miles away.

‘Values Have Skyrocketed’

“There’s probably $100 million in estates under construction in the San Dieguito Valley,” he said. “And values have skyrocketed. A house that sold recently for $529,000 would be considered a steal for that now. So Mr. Klein had vision when he purchased his property.”

Yet, Klein didn’t buy his 420 acres to develop. He bought them for horse training and breeding after his interest in thoroughbreds outgrew his 18-acre horse farm next to his home in Rancho Santa Fe.

Klein now has 250 thoroughbreds, including Tank’s Prospect, winner of the Preakness (one of America’s three classic races).

Klein became intrigued with horses when he was still majority owner, general partner and president of the Chargers.

“When I still owned the ballclub, a lot of the fun had gone out of it for me, and I knew I would get out,” he remembered. So, in 1984, after spending 18 years with the Chargers and writing his best-seller “First Down and a Billion,” he sold his interest in the club to Alex Spanos, builder of 60,000 apartments.

‘Pride Motivated Me’

“Alex is a pro at real estate, and I’m not,” Klein quickly noted. “I’m only developing because I accidentally had 150 acres across the street (from the rest of the 420 acres, which he uses for his horses).

“I could have sold the land and had some ordinary project built there, but I didn’t want that across from my horse ranch. Pride motivated me. Then, I thought, wouldn’t it be interesting and fun to develop?”

For expertise on the 65 clustered but customized houses, Klein teamed up with Guy S. Gardner of Fresno, who had developed and directed the design and construc tion of more than 600 single-family homes and planned-commmunity residences as well as more than 300,000 square feet of offices and 200,000 square feet of retail space.

Gardner was already a friend when Klein asked him to be the Del Rayo Downs on-site managing partner. They were introduced by their wives. All live in Rancho Santa Fe, where Klein has an 18,000-square-foot mansion, and Gardner has a 10,000-square-foot one.

Both Car Dealers

The men, both grandfathers, have other things in common as well. As Gardner explained it, “We both flew airplanes. We both had horses. We were both VW dealers. We were both interested in developing.”

And they were both excited about Klein’s development.

As Gardner, 58, put it, “Where the hell could a developer get the chance, after he thought he had retired, to do all he ever dreamed about during the past 25 or 30 years?”

At Del Rayo Downs, Gardner has wide latitude with design, although architect Larry Pepper of San Diego created 12 basic plans. “Custom is in the design. More--adding things like an extra fireplace or a trash compactor--isn’t it,” Gardner said.

All the plans at Del Rayo Downs can be custom-modified, meaning walls and windows can be moved so that every house is different, though the views--of the ocean in the distance and the horses and colts racing or resting in the pastures of Rancho Del Rayo (another name for the D. Wayne Lukas Training Center)--are essentially the same.

Luxury Touches

The houses also feature high ceilings, crown moldings, granite counters, clay tiles, cedar-lined closets and other such special touches as a shower with two shower heads. And landscape architects at Del Rayo Downs consult with an interior design team before specifying flowers to be planted in the garden of each home.

“We’ve already sold 17,” Gardner said. “We had a little fallout with the (October) stock market crash, but it’s come back about 50%.”

Gardner and his wife flew to New York with the Kleins in the Kleins’ 14-seat Gulfstream to the Nov. 11 auction where Van Gogh’s “Irises” sold for $53.9 million.

“I went to see how the crash would affect the market we are selling to, but judging from the sales at the art auction and at the horse auction we went to afterward, there’s no problem,” Gardner said.

Sold a Champion

At the horse auction, in Kentucky, Klein sold a champion named Lady’s Secret for $7 million. “That should keep the other horses in oats for awhile,” he said with a chuckle.

“At the art auction,” he joked, “I was going to raise my hand, but my wife slapped it down.”

Despite the stock market debacle, Klein said, “quality items are getting higher and higher prices. Look at the Van Goghs.”

Van Gogh’s “Sunflowers” sold last March for $39.9 million in London. “The next Van Gogh could go for $70 million,” Klein said.

“You have the same thing with horses and real estate. If you’re talking quality, there is no ceiling.”