When Sony Cleans House, It Takes a $3.5-Million Bath
Japanese companies haven’t had the best of luck investing in California real estate.
One took a bath a few years back on the Pebble Beach golf resort. Others have lost millions investing in downtown Los Angeles office buildings.
Now add to the list 15433 Brownwood Place in Bel-Air, the house Sony Corp. bought in 1992 for an eye-popping $5.5 million from its former studio chairman, Peter Guber.
Turns out the box-office bomb “The Fan” isn’t the only thing spilling red ink at Sony. According to sources, the company is selling the house at a loss of $3.5 million, or 64%.
Sony quietly listed the home recently at $2.5 million with Coldwell Banker, referring to it as a “unique rustic retreat” with features such as a guest house, tennis court, four fireplaces, two spas and a projection room.
According to sources, Sony was able to get just $2 million for the house, now said to be in escrow. A Sony spokeswoman declined to comment on the sale.
The deal to buy the home from Guber, through an obscure Sony unit called Lawrence Real Estate holdings, became an embarrassment for the company after The Times disclosed the transaction last December.
Sony executives in Japan were said to be irked by the deal, which they considered yet another in a long line of excesses and back-scratchings that seemed to proliferate during the regime of Guber, who for five years was chairman of Culver City-based Sony Pictures Entertainment.
Guber was hired in 1989 with former producing partner Jon Peters in one of the most expensive deals ever. (Peters left Sony in May 1991.) The regime’s spending habits are the subject of a scathing recent bestseller, “Hit and Run: How Jon Peters and Peter Guber Took Sony for a Ride in Hollywood.”
In December, Sony said the purchase of the home was part of an agreement made when Sony’s former top U.S. executive, Michael P. Schulhof, renegotiated Guber’s contract in 1992. Among the things Sony got when it bought the house from Guber was a large “Flotarium,” described in an owner’s manual as the “Rolls-Royce of flotation tanks,” used for relaxing.
Schulhof and Guber were later ousted in the wake of huge movie losses at the studio.
The house has been nothing but a headache for Sony. Once the luxury home market softened, Sony couldn’t sell it without taking a loss. And the $10,000-a-month rent Sony was getting didn’t cover mortgage payments and taxes.
Sony’s luck with tenants wasn’t much better. A furniture salesman who rented the home complained publicly about a backed-up sewer system and rats chewing on phone cords. Three months ago, the company kicked him out, saying it didn’t want him operating his business out of the house.
Sony wouldn’t say why it decided to sell the house now, although executives of the firm are known to be eager to rid themselves of the problem.
Plenty of people have lost money in Southern California in the last few years selling luxury homes that dropped in value. But buying Guber’s home and losing $3.5 million on it highlights another lapse in judgment, something all too common in the seven years since Sony plunged into the movie business.
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State of filming: There’s no shortage of hype from competitors seeking to lure movie and TV filming away from California.
Sometimes hype is all it turns out to be.
Last week, Ohio Gov. George V. Voinovich issued a news release bragging that a new Harrison Ford action film with the working title “A.F.O.” would be filmed in Cleveland, Columbus and Mansfield. The announcement carried the title “Harrison Ford Blockbuster to Be Filmed at Several Ohio Locations.”
A closer look at the announcement reveals that the producers will spend all of two weeks in the state and that Ford will shoot his scenes in Los Angeles.
There may be legitimate concerns about movie and TV productions fleeing California for other states, but it’s worth keeping in mind that activity here has never been stronger and that the amount of filming most other states can boast of remains minuscule.
