Salton City: A land of dreams and dead fish

Times Staff Writer

This lakeside hamlet is about as remote as you can get in Southern California and still have plumbing and pavement.

Nestled on the western shore of the Salton Sea, the town doesn't have a supermarket or movie theater or drugstore. But it has as many as 250 homes for sale, most of them newly built -- a huge supply for a place with just 1,440 people.

When real estate values began soaring a few years ago, builders flocked here. Summer temperatures might hit 115 or even 120 degrees and the sea may be too sickly for swimming or sailing, but land was cheap. Builders figured that people priced out of Los Angeles and San Diego would discover Salton City and the other towns in Imperial County.

Now, with home values sliding, mortgage rates edging up and gasoline prices on an upward trend, that assumption appears premature at best. Imperial County, at least for the moment, seems a subdivision too far.

"Builders are like lemmings. They saw a few of their peers going to Imperial County and they all joined in," housing consultant Patrick Duffy said. "They didn't do market studies. They just crossed their fingers."

Developers counter that history is on their side. The quest for three-bedroom detached homes has turned one rural area after another into a thriving new suburb over the last 60 years, from the San Fernando Valley to Rancho Cucamonga to La Quinta.

As one place gets too crowded and expensive, new buyers push on to the next, stretching their commute in exchange for a backyard barbecue and easy monthly payments.

Mitchell El-Mahdy moved to Salton City last year. First he bought a house as an investment, then he decided to live in it.

"I like the stark beauty and the way the light plays against the mountains," said the retiree from Studio City. "I haven't felt such tranquillity in years."

El-Mahdy thinks his new hometown has a splendid future, one he hopes to help bring about as president of the local Chamber of Commerce. Doubling down on his investment, he recently bought the house next door.

The builders are hoping for more retirees like El-Mahdy as well as families from Mexico who want to take advantage of U.S. schools. Another market: the growing number of Border Patrol agents and prison guards in the area. And then there's anyone who doesn't mind a little commute. San Diego is two hours across the desert on Interstate 8, Riverside about the same along I-10.

Suburbia would be quite a transformation for a county traditionally known for being poor, agricultural, broiling and on the way to nowhere. The El Centro metropolitan area -- Imperial County's urban center, such as it is -- had an unemployment rate in April of 16.3%, by far the highest of the 369 U.S. metro areas.

The county's working-class present and middle-class hopes for the future are displayed in the city of Brawley, population 22,000. In the first category are the Villa Serena apartments, whose two-bedroom "luxury" units are available for $630 a month, about the going rate for the area.

Not far away is the Ranch, a 273-house project by Stockton-based Matthews Homes that is just getting underway. A steady stream of potential buyers has come to check out the models, which cost up to $355,000 for a four-bedroom, 2,600-square-foot home. Sales agent Teresa Castillo said she had sold three. However, two of the deals are "shaky. The buyers are having credit issues," Castillo said.

Matthews Homes, which is also planning projects in El Centro and Calexico, declined to comment on its Imperial County developments.

In a tightened lending environment, it's common for deals to fall through or for buyers to simply change their minds. New-home sales in Imperial County in the first four months of 2007 totaled 259, according to DataQuick Information Services, down sharply from 677 in the same period a year ago.

Although homes are cheaper in Imperial County than on the coast, wages are lower as well. The 2005 median household income was $35,533, according to the Census Bureau, about one-third less than the statewide median. Salton City is considerably poorer than the county as a whole.

Nevertheless, deals are getting done. Credit the rock-bottom prices. Some brand-new homes sell for less than $200,000 and, thanks to the oversupply, are getting even cheaper.

Real estate agent Aimee Sisco, working with a colleague, has represented four buyers since March. Next month Sisco herself is moving to Salton City from a Palm Springs suburb.

"This place is a little nutty, a little out there," Sisco said. "But you can't get any cheaper. It's actually a place that people can afford to live."

One of her clients was a retired Latino couple from Los Angeles who wanted to be midway between their families in Mexicali, Mexico, and L.A. Another was a younger couple who bought as an investment; the husband, who is in the military, spends several days a week in San Diego. A day laborer and his wife sold their San Bernardino house to move here.

The recent real estate frenzy marked a return to Salton City's roots half a century ago. Founder M. Penn Phillips is little-remembered today, but he was one of the great California dreamers. The state's swelling population, he believed, would find a haven in the desert.

Phillips' vision came true in Hesperia, north of San Bernardino. When he started building there in the mid-'50s, it had only a few hundred people. Now it has 75,000.

Salton City was going to be an even bigger deal, a planned resort next to a lake formed in 1905 when the Colorado River was inadvertently diverted into a dry lake bed. Over time it became a tourist attraction, particularly for bird watchers and sport fishermen.

With the ambitious goal of creating an American Riviera, Phillips bought 30 square miles of seafront in 1957. He promised a yacht club, a resort hotel, shopping centers and other amenities. He laid out streets and put in a sewage system.

Within a year, he sold 7,000 lots for several thousand dollars each. Some investors bought from airplanes cruising over the nascent town, choosing their properties without seeing them at eye level. The yacht club was built. So were motels. The sea became a playground for Frank Sinatra and his Rat Pack pals.

The golden age was short-lived. Farmers diverted their agricultural runoff into the sea, but the variable amounts meant routine flooding. Another problem was the sea's salinity, which is greater even than the ocean's. Fish die-offs became common. Birds that fed on the fish suffered in turn.

The yacht club was abandoned, then finally torn down a few years ago. People moved away or never moved in.

Phillips died in 1979 at 92, but his place was taken by other promoters.

Carol Hines, an office temp worker in Brawley, remembers camping on the shores of the sea about 15 years ago.

"This developer came bounding up and said, 'Are you interested in buying some land?' " Hines said. "I looked around at the dead birds and the dead fish and said, 'I'm kind of sorry I'm even visiting.' "

ERA Investment Group, the biggest Salton City developer, touts the community as both "California's last frontier" and "the next hot market." The spirit of Penn Phillips lives on in ERA's sales brochure, which touts "breath-taking views" and claims the sea "teems with fish."

Fueling the hustle is yet another plan for the sea, this time to shrink and divide it into several wildlife habitats. The make-over, which would cost $8.9 billion over 75 years, is in the hands of lawmakers.

Some longtime residents have mixed feelings about growth.

"We want the sea fixed, but we like the peace and quiet here," said Joe Tamburello, who manages the town's small store. "We don't want this to be like Riverside, like L.A. All that traffic, it's just trouble."

Still, he noted, the land fever has given many people an opportunity to make a killing. "My girlfriend's brother bought some lots five years ago for $350 each. He sold them for $25,000. Each."

The value of those lots probably has declined since they were sold a year ago because supply now outstrips demand. Nearly every intersection has signs advertising lots or houses for sale. Power Brokers, a local builder, touts a $10,000 buyer move-in premium for many of its 25 new homes. In front of one model is a red Kia Rio marked, "This new car free with new home."

There are genuine signs of development. A small strip mall has been built called the New Home Center. It features a Countrywide Financial mortgage office and First American Realty. A restaurant, the Travertine Grill, just opened. There's a shell that will supposedly house a full-fledged grocery store. The Torres Martinez Indian tribe opened the Red Earth Casino. The penny slots, and the air conditioning, are popular on sultry afternoons.

Norm Niver, an Imperial County planning commissioner, can feel civilization encroaching. When he bought his house in Salton City in 1978, it took forever to get there along a two-lane road that had so many fatal accidents it was known as the "highway of death."

But there were compensations. He could pull white sea bass, huge 20-pounders, off his dock, one right after another.

A four-lane highway was finally finished, but a few years ago the excess salinity killed the bass. Only the hardy tilapia are left, and even they suffer frequent die-offs.

"I want the sea to come back, but I'm realistic," Niver said. "I've been sitting here 30 years and waiting for something to happen."

His wife, Connie, commutes 100 miles a day to work at a country club near Palm Desert. The jobs aren't here now. Maybe someday.

Twenty-five years ago, Temecula was about the size of Salton City. It was a laid-back community known for its wineries, cattle ranches and Old West flavor. Now it's a flourishing city of 100,000, one of the biggest in Riverside County. The congestion is so horrible it's called "Trafficula."

"California doesn't stop growing," Niver said. "Slowly but surely, people are gravitating this way. There's nowhere left to go."

david.streitfeld@latimes.com

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