Billionaire’s buying has the town talking
For years now, software magnate Larry Ellison has been on a spending spree in Malibu that has caused even his fellow billionaires’ tongues to wag.
By some accounts, he has shelled out as much as $200 million for more than a dozen properties, including five adjacent residential parcels on Carbon Beach, two nearby restaurants, the Casa Malibu Inn and a vacant gas station or two that he apparently intends to use for customer parking.
Carbon Beach, which runs east from the Malibu Pier for about 1 1/2 miles, is also known as Billionaires Beach thanks to its lineup of denizens including philanthropist Eli Broad, former Los Angeles Mayor Richard Riordan, television financier Haim Saban, producer Jeffrey Katzenberg and David Geffen, the music magnate who famously battled the state over public beach access.
So far, Ellison, 62, has submitted plans to the city of Malibu for two new restaurants, including one expected to feature ultra-high-end Japanese cuisine. That would be in keeping with his affinity for the finer things in life and for all things Japanese.
The Oracle Corp. chief executive -- who, according to Forbes magazine, is worth nearly $20 billion -- spent 10 years and a reported $200 million re-creating a Japanese village on his 23-acre estate in Woodside, south of San Francisco. And Rising Sun was the name he chose for his 454-foot yacht, said to be the world’s longest privately owned boat.
Jefferson Wagner, owner of Zuma Jay surf shop on Pacific Coast Highway, speculates that Ellison wants to “control this end of town” because of his restaurant plans.
“He’s buying what he needs to create his little world,” said Wagner, whose store is across the street from some of Ellison’s commercial parcels. “I’m not knockin’ it. It’s an upgrade as far as local merchants are concerned.”
Ellison’s representatives did not return phone calls seeking comment.
Meanwhile, Geffen is renovating the nearby Malibu Beach Inn, which is taking online room reservations for June.
“Geffen will raise the bar on what has been a dated hotel but a great location,” said Tony Dorn, a longtime Malibu resident and commercial real estate broker.
Geffen and Ellison are changing what has been, commercially speaking, a rather forlorn stretch of the highway, an odd state of affairs considering the immense collective wealth of the locals.
Dorn said Geffen and Ellison were drawn to the properties because there are so few commercial parcels on the beach side of PCH. “The Malibu commercial environment is so tight, and there are no [new] permits available right now,” Dorn said. “That’s what makes it attractive to these people.”
Residents and real estate agents say houses on Carbon Beach, even the few remaining “shacks,” would start at $20 million. Courteney Cox and David Arquette recently put their four-bedroom, five-bathroom showcase house, with 80 feet of frontage, on the market for $33.5 million.
Ellison’s buying binge started in 2003, when he paid $65 million for five adjacent residential properties on Carbon Beach. Next, a couple of restaurants at the beach’s western end near the pier caught his eye. According to local scuttlebutt, in early 2004 he paid nearly $30 million for the Pier View Cafe and Cantina and the Windsail. Both have been shuttered since. City officials say Ellison recently bought the Casa Malibu Inn, a beachfront getaway that opened in 1949 and is near the restaurants. In addition, he reportedly purchased a $20-million home in a gated hillside community just west of Malibu Pier.
The situation is once again turning a spotlight on Malibu’s rich and famous and their hunger for land. One resident who socializes with Carbon Beach’s well-heeled residents and asked to remain anonymous said of them: “They’re sort of in this club. They walk on the beach and schmooze. What they all talked about was how to get more property on Carbon Beach. They’re asking each other if they’ll sell their place for any amount of money.”
Since Ellison began popping into town to conduct business and relax, Malibu residents have engaged in the game of Larry-spotting. Wagner ran into him at the local Ralphs and jokingly asked, “On that real estate thing, have you left anything for me?” He said Ellison replied, “I hear your building’s for sale.” Wagner promptly found a partner, who helped him buy the building that houses his surf shop for $4.2 million. “I could just see the glint in his eye,” Wagner said of Ellison.
Last week, the City Council, on a first reading, narrowly approved a zoning change that would allow Ellison to proceed with plans for a commercial enterprise on one of his restaurant sites. That change, known as a local coastal program amendment, faces a second vote by the council and then would need to be approved by the California Coastal Commission. The other restaurant has already been approved by the city planning commission.
Mayor Ken Kearsley, who voted against the amendment, said he fears that the restaurants will cause a traffic backup on the highway. He also said Ellison should honor a development agreement between the city and the previous owner, who had promised to donate $400,000 to local schools and include a community room in his proposed beach club and spa.
“At this point, he hasn’t brought anything to the table,” Kearsley said of Ellison, adding that, for the billionaire, $400,000 would be “couch change.”
For a time, rumor had it that Ellison would try to lure Nobu, a celebrity hangout in the Malibu Country Mart, to Carbon Beach. Whether it’s that or another upscale eatery, some business owners are cheering him on.
“Put the restaurant back, whatever it is,” Wagner said. “I’ll never be able to afford to go there, but at least sushi will smell better than the septic.”