California City--A Dream in Progress : Mojave Desert: The space and the expectations have been there for 30 years. But reality has not caught up with the plan. America's 11th largest city has only 6,500 residents.

TIMES STAFF WRITER

California City was to be the city of the future. A big future.

Inspired 30 years ago by the explosive development of the San Fernando Valley, the city was designed to catch the human overflow as it crept northward into the Mojave Desert. It was the dream project of a man who could not be accused of dreaming small. When California City incorporated in 1965 it became--and still is--the third largest city in area in the state. It is the 11th largest in the United States.

To appreciate its size, you have to get into an airplane.

Below, near the center of the city, lies a massive grid of highways, streets, cul-de-sacs and driveways in mile after mile of ordered rows. Everything in the 30-year-old grid is laid out in right angles: The cul-de-sacs connect to streets which, in turn, feed into highways at regular intervals.

But the grid is a skeleton.

Out here there are no houses, no cars, no fenced-in yards, no barbecues.

The future never came to California City.

What did come were lawsuits, disappointments and government intervention, all on a scale befitting the size of one of the most ambitious real estate schemes in the history of the country.

Some people did come to settle: There are about 6,500 residents now, mostly on the western edge of the 186.5-square-mile city. But the vast majority of California City, including the ghostly residential grid in its center, is still unpopulated, brush-covered desert land.

The great industries, universities, shopping centers, skyscrapers and financial institutions that were also part of that plan never arrived. The schematic of a great city was in place, but hopes were dashed that it would ever be fulfilled.

Until now.

Roland Toler was there almost at the beginning.

"Back in the '50s, every newspaper you picked up was talking about population explosion," said the white-haired Toler, 78, as he leaned against his car at one of California City's two gas stations.

"There had to be new cities. The country needed new housing, colleges, hospitals, freeways, jobs, businesses. Nat Mendelsohn knew this. He had a vision of the future."

Nathan K. Mendelsohn was the father of California City. A Czechoslovakian-born sociologist who taught at Columbia University in the early 1940s, he came West after World War II to try out his community development theories.

He converted military barracks near Riverside into two-bedroom homes and helped subdivide the desert town of Hesperia. He worked with famed land developer M. Penn Phillips, whose motto was "you can't buy a bad piece of land in California."

In 1955 Mendelsohn told friends that he was going to create a dream city out of the barren desert land and alfalfa fields just north of Edwards Air Force Base and east of the town of Mojave in Kern County.

"He would take people up on a hill overlooking the land and explain to them about the city that would be there one day," said Renate Saremba, Mendelsohn's longtime secretary. "They would just look at him. They could not see what he saw."

With bank loans and money from investors Mendelsohn bought 82,000 acres of land. Then he brought in the planners.

"They divided it into seven different communities with a reason for each one," said Toler, who was a firefighter in Los Angeles before he moved to California City.

"There was going to be a university town, a medical town, the bedroom community. Areas were set aside for light industry."

An ambitious street system was designed and roads were cut into the brush, making the grid that can now be seen from the air. A sales office and model houses were constructed, and work was started on Central Park, an 80-acre recreational area that eventually included a 20-acre lake, outdoor swimming pool, playing fields, par-three golf course, picnic areas, tennis courts, indoor sports center and community building.

In 1958 Mendelsohn began selling his dream at rates as low as $990 a lot--$90 down and $17.50 a month for five years. For a new three-bedroom house, with lot included, prices started at $8,700.

The response to his project was overwhelming, almost right from the beginning. "California was the magic word back then," said Dennis Sumrow, who grew up near California City and has spent most of his life in the area. "It was the land of promise, the land of the future."

Less than a year after lots were put on sale, the frenzy was on.

"Buses bringing up people from Los Angeles would be pulling in all day," Toler said. "DC-3s would land out right next to the main street, bringing in more of them."

"There was a kind of buying hysteria up there," said Carl Click, an optometrist in Riverside who first heard about California City at a booth at the Los Angeles County Fair in 1958. He and his wife drove up to have a look. "The sales office had a frantic atmosphere with loudspeakers proclaiming each lot sale and large board displays showing what had been sold."

Most of the buyers came from the Los Angeles area, where Mendelsohn's dream project triggered a longing to get into something big on the ground floor. Everyone, it seemed, had a distant uncle who had made a killing in real estate by speculating when L.A. land was incredibly cheap. Now their chance had come.

"On a good weekend day, I saw sales go as high as a half-million dollars before noon," Toler said.

Some came with the dream of establishing their own businesses.

"I was born in L.A., and I couldn't wait to get out," said Pat Cooper, who came to California City with her husband in the early 1960s. They opened California City's first grocery store. "We came up here without selling our home down below in L.A.," she said. "Mr. Mendelsohn gave us a house to live in here at no charge until we sold ours. He wanted people up here who were willing to start businesses."

Sylvia Sprague and her husband came from Garden Grove to open a hardware store. "There were maybe only a couple of telephones in the whole town," Sprague said. "We all had CBs and when someone was going out to the liquor store on Highway 58, they'd get on the radio and say, 'I'm going over to Ma Green's. Anybody need anything?' It was sort of fun."

"We were pioneers," Cooper said.

Mendelsohn donated a small church and a city airport, both with early '60s-style futuristic architectural flourishes, and a barn that the residents turned into a community club. He sponsored celebrations and publicity stunts to mark various occasions. When the man-made lake in Central Park was filled, Mendelsohn had water from New York's Central Park ceremoniously poured into the lake from an airplane.

The biggest celebration marked the date, seven years after Mendelsohn started selling the land, when California City actually became a city.

Now all it needed was a reason--beyond real estate speculation--to exist.

Mendelsohn, Cooper said, offered several industries land for $1 an acre if they would build a plant in town, and there was speculation that major aerospace companies were considering his offer. Also fueling the boom mentality was a plan, by the Los Angeles Department of Airports, to build a 17,000-acre airport in Palmdale, about 50 miles to the south.

But the only industry that actually came to California City was a small cement plant. The airport project was drastically scaled down.

A decade after lots went on sale, the dream was deflating. By then, tens of thousands of lots had been bought, but few homes had been built or businesses started. In 1969 the population was only 1,700.

"Nat was a very dear man," Cooper said. "My husband and I felt he was honest and sincere and always trying to do the best for the community. Things just didn't happen as fast as he had hoped."

Others believed Mendelsohn had deceived them. "They told us the land would have to go way up in value," Click said. "We were misled." Click's sales documents show that he paid $3,490 for one of the lots in 1959. His tax assessment from Kern County for the last fiscal year lists the property's current value at $3,755.64.

Many landowners were not willing to hold out--they stopped paying taxes on their land and let the state take ownership. "You would not believe the number of people there who let their land go," said a Kern County official who did not want to be identified. "In September, the last time we had a land redemption sale, the California City list was half-an-inch thick, with 10 parcels per page. There were hundreds of them."

Mendelsohn pulled out in 1969. He and his associates sold his company to Great Western United Corp., a Denver-based sugar and mining company, for $27.4 million in stock. Mendelsohn became an officer of Great Western, but he concentrated on pursuits away from California City. By the mid-1970s he was rarely spotted there.

He died in 1984 after suffering a heart attack on a golf course near a resort community he founded in Texas.

Great Western continued selling California City with Mendelsohn-style hype in ads placed in national magazines, such as Reader's Digest and Look. The ads painted such a rosy picture of the city that the California Department of Real Estate objected. Charging that the ads greatly exaggerated the "commercial, recreational, structural" development of the city, the agency issued a desist and refrain order in 1972.

In 1974, Great Western was acquired by the famed Hunt brothers, Nelson and William of Texas, who wanted the company for its beet sugar fields. Along with the sugar, they got California City.

It was not one of their better acquisitions.

"California City--that's the place California dreamers and California schemers got together and did business," said Los Angeles attorney Kenneth H. Donney. In 1974, Donney was with the Federal Trade Commission and the head of an investigation into sales practices at California City.

The FTC's major objection had to do with "tool" lots, a sales approach that had been used since Mendelsohn's time, whose company had set up a real estate license school to train salespeople for the development. "They were told, 'You would be that much more convincing a salesperson if you yourself were a landowner. You could say to prospective buyers, 'This is such a great deal that I got in on it myself,' " Donney recalled.

"Our allegation was that the students were not buying a sales tool when they bought that lot, they were simply buying a lot. It was just a scheme to sell them land," he said.

The problems preceded the Hunts--they had just taken over when the FTC acted. The Hunts agreed to a settlement, paying almost $4 million in partial refunds to people who had bought land since 1972 and a $50,000 penalty to the government. They also agreed to pay up to $16 million for improvements in water, gas and other facilities.

"It was a landmark case, no pun intended," Donney said, describing the largest refund ever obtained to that date by the FTC. The settlement also called for a written warning on sales materials given to potential buyers. The caveat, reminiscent of the warning on cigarette packs, reads: "You should consider the value of any of our land to be uncertain. Do not count on an increase in value."

It is a lasting legacy. The warning is still found on California City tract maps.

Lou Logue is now California City's leading citizen. But he's as different from Nat Mendelsohn as the vision of California City is from the reality.

Mendelsohn was, by all accounts, a natty dresser, well versed in the arts, politics and world affairs. He was friendly but somewhat aloof.

Logue, 63, is almost always dressed in cowboy duds, complete with boots, vest and hat, although he removes the hat during City Council meetings. Logue is the mayor of California City, a job that pays $500 a month.

Although he has the highest elected position in the town, he could not be accused of being aloof. The business card of the mayor of the third largest city in California gives his office and home phone numbers.

Like Mendelsohn, he is a builder--Logue is a contractor who moved to California City 12 years ago. But Logue does not talk in terms of grand master plans, great universities or industrial centers, at least not for now. He has seen California City at its worst.

"When I first moved up here the town was in sad shape," Logue said. "You couldn't even get equipment people to come in here back then. The first couple of houses I put in, I had to dig the foundations by hand."

Major industries have yet to come to town. The two-block-long commercial area, along the grand boulevard Mendelsohn put in, has not attracted any big retail outfits. It includes a couple of cafes, a gift shop, auto parts store, video rental outlet, a pizzeria, Sears Catalog Service counter, realty offices and two nail parlors.

The bowling alley, which was idle for years, has recently reopened, but the city's only movie theater closed last year.

"You can't go to a nice restaurant anywhere around here and have a nice night out," Dennis Sumrow said. "There is no theater, except for community groups, no orchestra, no galleries. You starve for that up here.

"I brought my wife here, and it was like taking her to the moon. She didn't last here. It was too small-town for her." Sumrow himself has moved on since he was interviewed for this article.

But if California City does not have the commercial or cultural markings of a great metropolis, it is slowly acquiring one element every great city needs--people. In 1980, according to the census, 2,743 people were living in the city. By the beginning of this decade, according to a city estimate, the population stood at 6,573, a 240% increase.

Even more impressive is the increase in construction. Records show that in 1980 about $1.5 million in construction was done in the city. In 1989, the figure was more than $33 million.

"You can see it out there, it's happening," Logue said.

The true industrial and residential boom is happening about 50 miles south in the cities of Lancaster and Palmdale, both of which are rapidly expanding. But California City is feeling the repercussions. "Housing prices in Palmdale are moving on up to the Los Angeles range," said the mayor, exaggerating a bit. But there are bargains to be had for those who are willing to commute the 130 miles from California City to downtown Los Angeles.

Kern Island Homes, a builder that recently moved its headquarters to California City from Bakersfield, offers new three-bedroom homes for a base price of $79,950.

Mike Strong, the company's co-owner, estimated that in 1990 the company will sell 200 houses in the city, as opposed to the 30 they sold there in 1987.

Kern Island is only one of several builders that have built model houses in the past year and erected signs along the main road leading into the city to entice buyers.

"We're so optimistic that we have bought land to create two new subdivisions all our own," Strong said. "That might be a little crazy, but time will tell if we were nuts or not."

Along with development comes new problems.

"Our sewer system is already running at maximum," said Helen Dennis, editor of the Mojave Desert News, a weekly newspaper based in California City. "It was rebuilt about five years ago and it was supposed to make it to the year 2000, but it didn't make it."

Dennis also said there were problems with crime, which she blamed on an "undesirable element" moving up from Los Angeles.

Last month a 22-year-old California City man was arrested on suspicion of stabbing a man in Lancaster. The stabbing was described by police as a gang incident.

But for the most part the city is still perfect for those who want to avoid urban blight. About 15 miles northeast of the main commercial/residential area is a development overseen by Silver Saddle Development Co., which bought out the Hunts in 1983.

Carla Stacy and Eddi Dixon of Los Angeles recently built a two-story house there with three bedrooms, 2 1/2 baths, two kitchens, two fireplaces, an indoor Jacuzzi and a three-car garage, all for $94,000, according to Stacy.

Although well within city borders, it is in a spectacular setting.

"I wanted the animals, I wanted the weather changes, I wanted real sunsets, I wanted the quiet," Stacy said.

Standing on the balcony of the house they have built, she can look out on miles of stark desert landscape with the blue Tehachapi mountains in the distance. The streets in her neighborhood have been paved to make way for hoped-for development, but so far she can only see one other house from her vantage point.

The area resembles--on a small, less frenetic scale--California City in the Mendelsohn days. More than 1,000 lots have been sold in this area by Silver Saddle, but only five houses have been built. Obviously, buyers are speculating that their neighbors will build and raise the value of the land.

But as in the early '60s, not only the speculators are buying. California City still attracts the young dreamers.

In the bar of the Silver Saddle clubhouse, Jerry and Barbara Arreola of Simi Valley were having a celebratory drink. They had arrived that morning responding to a direct-mail campaign offering a free night's stay and a prize. A Silver Saddle salesperson showed them available lots, which were priced for an average of about $8,000.

"We had been out to these kinds of places before, and it always turned out they were selling time-sharing," said Barbara Arreola, 29. "But when I saw that land out there, I thought we could do this; we could have our own home."

The Arreolas bought their first piece of land that day, not far from where Stacy and Dixon built their house.

"I look at it this way," said Jerry Arreola, 30. "Land in California will only go up."

The Arreolas had never heard of Mendelsohn. They didn't know they were saying the same things that others had been saying for more than 30 years.

Of course, almost anyone in town will tell you that the bad days are over. The boom has begun. And they could well be right.

"I want Spanish-style and she wants ranch," Jerry Arreola said with a laugh.

"Whatever we build, the first thing we are going to do as soon as escrow closes is to plant four trees on the land, one for each of our daughters," she said.

"I was shaking earlier when we did this," he said. "But now I feel so good. I own some dirt that nobody else owns. That's my rocks out there, my sage."

He raised his glass in a toast.

"This is the American dream."

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