Developer to Auction 52 Torrance Houses : Real estate: The builder will try to sell all of the houses at a former school site in one day. Bids on the homes, initially offered for $599,900 and up, will start at $395,000.
Selling a home in the South Bay these days can sometimes take longer than saving the money to buy one.
But developer Arthur L. Valdez says he believes he will be able to unload 52 Torrance houses in a single day next month. Valdez, who built a large tract of luxury homes on the former site of Meadow Park School, has decided to make his project one of the first--and the most valuable--in the state to be sold entirely at auction.
Minimum bids for the spacious homes, which Valdez initially offered for $599,900 and up, will start at $395,000 when the houses go on the auction block May 19, said Susan Stevens, president of Irvine-based Auction Marketing Services.
Valdez expects the Val-Co Enterprises homes to sell at a discount from his original asking prices. But selling them all in one day, as opposed to paying staff members and carrying financing costs for nearly a year to sell them one by one, will make up for the loss of sales income, he said.
“It’s a viable marketing technique. I may never go back to the traditional way of marketing a project,” Valdez said. “This way, we concentrate our marketing on a 30-day effort, we sell them all in one day, we go through the closings, and I go on my way to something else.”
For Valdez, a successful auction also will end his four-year quest to develop and sell the site.
The Torrance Unified School District sold the nine-acre school site to Valdez for $8.4 million in 1987, when it was zoned for public use. Valdez made a variety of development proposals--early in 1988, he asked to build 174 condominiums there--before he settled on a project that satisfied first the neighbors and then the Torrance City Council.
When Val-Co began grading the site for development in the fall of 1989, a group of pilots sued to block construction, complaining that the city’s approval of the project did not conform with state laws governing uses of land under airport departure paths.
The school site lies roughly 4,000 feet from the end of a Torrance Municipal Airport runway.
The City Council’s debate over the lawsuit disintegrated into angry talk of closing the airport. Pilots dropped their suit about a month after they had filed it when the city agreed to conduct a special hearing on the Meadow Park School project. The council affirmed its decision, and Valdez proceeded with his project.
Valdez said the complicated political problems did not contribute to his decision to auction off the houses.
“The political difficulties are there, and they don’t make you happy, and they cost you money, but that’s life in the big city,” Valdez said. “I’m not in any kind of a rush on this. I just made a good business decision that I think will work best for us.”
Despite speculation by some city officials that Valdez turned to an auction house because the project he calls Tuscany Meadows was not selling fast enough, Valdez insists the project’s finances are in excellent shape.
“I don’t care what anybody says,” he said. “When the auction is over and we’re successful and we walk away, then everybody will be saying, ‘Gee, that was a smart deal.’ Everybody wants to second-guess.”
In response to reports of slow sales, Valdez said he has not been actively marketing the Lomita Boulevard project because detail work on the houses, which are just west of Hawthorne Boulevard, only now is being completed.
He noted that he already had contracts to sell two of the homes--one for $695,000 and another for $705,000--but that he offered to cancel them after he decided to auction the houses.
“I felt it was my responsibility to tell these people that I was going to auction and that they could participate in that,” Valdez said. “I told them, ‘If you make a better deal on the auction, I’m happy for you.’ ”
Both families canceled their purchase contracts and plan to bid on the homes, he said.
Valdez said he believes open auctions of new housing tracts will become more common in the future as developers see how successful they can be with higher-end homes.
“I can remember . . . times when they had lotteries to sell a project that was coming on line,” Valdez said. “They had people camping overnight for an opportunity to buy a unit. . . . If that’s the scenario, why not just auction them? Why not just take the best price you can get, instead of picking a few people to pay a set price? Why not let the marketplace tell me what they’ll pay me for my units?”
In the opposite kind of market, when houses can languish more than a year without an offer, an auction can be equally effective, he said.
“I think there are two market values--one to sell a unit one at a time and another market value for when you’re selling 52 houses in a single day.”
