Court Sells Historic Rancho Santa Fe Spread
A two-bedroom home admittedly needing repairs--the roof leaks and patio tiles are loose--went on auction Friday in federal Bankruptcy Court and, maybe not surprisingly, there were no bidders.
So the property was sold instead to some Texans who already had offered to pay $2.65 million.
No ordinary house, this place.
It’s the Osuna Ranch in Rancho Santa Fe, a 17.2-acre spread deeded by the Mexican government in 1845 to Juan Osuna, the first mayor of San Diego. The ranch house is considered the oldest home in Rancho Santa Fe.
Among a series of owners were the Santa Fe Railroad, which hoped to farm railroad ties made out of eucalyptus trees, crooner and horse-racing fan Bing Crosby and, most recently, financier Clifford Graham, which goes to the issue of why the estate found its way into bankruptcy court.
Graham, a founder of the Fotomat chain, is on the lam from federal authorities after allegedly bilking investors of more than $10 million in an investment scheme. Graham was charged in federal court in 1986 with 22 counts of fraud and income-tax invasion after he lured more than 100 wealthy investors into his company, Au Magnetics. He said his company owned a process to extract gold, silver and platinum from natural and residual mineral deposits.
Graham’s clients included several prominent San Diegans, including businessmen Malin Burnham and Leon Parma, as well as Rep. Jack Kemp (R-N.Y.) and members of the Dow Chemical Co.
Graham was last seen in San Diego in May, 1985, and investors forced his firm into bankruptcy. The Osuna Ranch was the only substantial asset in Graham’s name to be tapped by investors, and liens against it totaled $4.5 million.
The Rancho Santa Fe estate, situated on Via de la Valle on the eastern edge of the Whispering Palms golf course, today features not only the original two-bedroom, 1845 structure with its 3-foot-wide adobe walls, but a number of significant additions:
A new, separate main house with slate and hardwood floors, stucco walls, heavy wood accenting and measuring about 6,500 square feet. Still, it has only two bedrooms, including a master bedroom suite that has its own sitting room, Jacuzzi, sauna and walk-through closet. Other features include a 400-square foot “breakfast nook;” formal dining and living rooms; a kitchen with two dishwashers, two institution-size refrigerators, two range tops, two sets of sinks and probably two of everything else. There is also a room that was once a gigantic bathroom and has been converted into a bedroom of sorts, complete with step-down wet bar where the sunken bath might have been.
Three garages for 11 vehicles, plus another garage capable of handling a full-size recreation vehicle.
Two one-bedroom guest houses--one of which had been converted by Graham into a wine shed.
Stables, dog kennels and groom quarters.
A swimming pool and lighted tennis court, joined by a covered, open-air pavilion with its own fireplace.
Surrounding the house are magnificent trees, including an incredible avocado said to be 200 years old that serves as a centerpiece to the immediate back yard and a gnarly, three-trunk-entwined Australian tea tree that would delight the Swiss Family Robinson.
“There are houses that are newer in Rancho Santa Fe, and ones that are flashier and better built,” said George Thomas, a salesman for the Willis M. Allen Co., which was broker for the house. “But is this the nicest or what?”
Hey, let me show you where Bing Crosby signed his name in the concrete in the pool pump house, he says. Oh, did you notice that snow owl in the palm tree near the front gate? Can you believe these adobe walls?
Thomas estimates he has shown the house more than 150 times to prospective buyers, and it takes him 1 1/2 hours each time to get through the place. To hear him, he gets a rush every time he shows it.
The original asking price of the house was $3.9 million. Last year, to help promote its sale, the trustee for the estate arranged for the San Diego Historical Society to use it as 1987’s Designer Showcase. Interior designers were assigned to show off their ideas in various rooms in the house, and, if the result was a bit confusing as a whole, it nonetheless polished the place up for the estimated 25,000 people who paraded through it.
Still, for all the looky-loos, there were no bites to buy the ranch. The asking price was dropped to $3.4 million. Again, no takers. It was decided to put the place up for auction, and to establish a base bidding price by giving the house one last hard sell on the open market.
5 Parcels at Most
In recent weeks, Willis M. Allen Co. received more than 100 calls from somewhat serious buyers, including a number of Los Angeles developers hoping they could subdivide the 17 acres into 17 one-acre lots. No, they were told; the ranch can be cut up at most into five parcels.
Several bids on the house were received, the highest being $2.65 million by Sporting International, described by its president as a privately held service industry based in Texas.
On Friday in Federal Bankruptcy Judge James W. Meyers’ courtroom, others were going to be given a chance to bid higher for the ranch. Indeed, Thomas had said previously that at least one party indicated it would bid higher, and there was no telling how many others might jump in for their chance to buy the fixer-upper, which is in need of electrical and plumbing repairs, not to mention the leaky roof.
The courtroom was filled with attorneys and clients. There was some preliminary discussion about how the proceeds would be distributed among the many creditors. Security Title Insurance Co. is still owed $3.1 million. A deputy county counsel reminded everyone that Graham owed about $50,000 in back property taxes. Meyers said he would settle some of the money-disbursement issues later, but selling the place took priority.
Prospective buyers would have to deposit $100,000 immediately, pay the balance with a cashier’s check and be willing to close escrow in 21 days.
No one in the courtroom flinched.
Meyers opened the bidding at $2.7 million. There were 30 seconds of absolute silence. Meyers picked up his gavel. “This is the last call,” he announced. No one whispered.
Approved Sale
With that, he approved the sale of the ranch at $2.65 million to Sporting International.
Charles Perry, president of the company, said he was “smitten” by the property, but said the company is buying it solely for investment, not for occupancy. “We won’t cut it up,” he promised outside the courtroom. “We’ll sit and hold it. We think it’s a good investment.”
Attorney Richard Circuit was in the courtroom representing clients who expressed an interest in bidding, then decided not to. “We were curious,” he said of the ranch. “It’s rich in heritage and tradition. It’s been a house to saints and sinners.”
Jim Hill, the attorney for the estate’s trustee, said he was disappointed no one bid on the ranch but figured that the broker had obtained the best possible price.
