HomeFed Bails Out of Partners; 18 Lose Jobs

HomeFed Corp. is bailing out of its Partners residential real estate brokerage franchise business, a decision that led to layoffs of 18 employees Monday.

HomeFed also said it expects to take a $1.7-million loss in the current quarter as a result of discontinuing the Partners operation, bringing to $8 million the total losses absorbed by the savings and loan holding company in its 5-year effort to establish the residential brokerage chain.

Since becoming a master franchiser for Partners in 1984, HomeFed has invested about $10 million in 85 Partners offices in San Diego, Los Angeles and Orange counties. HomeFed obtained rights to award Partners franchises in 13 Western states from owner Financial Partners International of Des Moines, Iowa.

HomeFed perceived the chain as a good pipeline with which to deliver financial services, mainly mortgages, to home buyers, managing director Jim Taft said Monday. But the S&L; underestimated the competitive brokerage environment in Southern California and the Partners has been a steady money-loser, he said.

“The rate of franchise sales, for bringing new offices into the network, was a lot slower than what we needed to support the (marketing) program that we had to provide to remain competitive with other franchisers in Southern California,” Taft said. Thirty-eight of the Partners offices are in San Diego County.

HomeFed is giving its 80 independent broker-franchisees in the Partners chain the option of joining other brokerage chains or remaining in business under the Partners banner through 1990 but with no contractual relationship to HomeFed as of Oct. 31, Taft said.