|amazing.com | Portfolio | Megalomaniac Dreams|
A real estate fantasy
San Pedro, California, 11 May 1999
[This page was last modified on 9 May 2000. On 13 August 2002 someone finally pointed out that I'd spent 'megalomaniac' incorrectly. Oops. My apologies to him and all sensitive to unpleasant spelling errors. Now that I know people are watching, I'd better check all those glaring errors on my video pages!]
Some people want a home, a small, cozy place with a lawn and yard where they can sit and relax under the sun.
Personally, I have always wanted a Building of my very own. Soaring fifty stories or more over the city, the Building would be an embodiment of my desire to get the ultimate view, and of course my gigantic ego. Only a true megalomaniac would imagine his Building, made of the finest materials, the best marble from Italy, elevators by Otis, rare woods from Thailand ...
Of course one must also realize that it takes a megalomaniac to build a city. Yes, indeed.
Now, in one of those unfortunate tragedies which is at times too much to bear, I don't have quite enough money to construct my own Building. I don't even have enough money to pay the Electric Bill on a true Building, one soaring into the sky like an oversized eagle.
But here's something fascinating, a ghost Building offered for sale. What happened, I wondered? Was Downtown San Pedro, an incredibly seedy old place, just not a good enough location? There is a shiny new high-rise right next to it, but it has the smell of heavy government subsidies. Traffic when I checked it out was almost nil. Signs of life were a couple of lights on a few floors, ghostly sentinels of the night.
As you can see, they've had a little bit of trouble unloading this gigantic eleven-story grey elephant. (A white elephant might be easier to sell, you see).
So here we have a Building, in an absolutely terrible area of the City. It does have one advantage: it's within a few blocks of the ocean, and the panoramic views from the top floor must be awesome.
So in my dreamy way, I wondered, could I buy the Building? They probably wouldn't need much of a downpayment, since they'd love to get rid of such a thing. It's costing them money each and every month, after all. And then I could commandeer the top story for myself, assuming the Elevators worked. And get one of the best views in the City.
Then to raise money for the Repairs and the Mortgage, I could rent out the lower stories to the type of people who traditionally revitalize areas -- the artists, the baby ad agencies and publishing companies and photographers who come into an area and give it character.
Maybe we could even have a great Restaurant on the bottom floor. It would make a tremendous business incubator, a high-rise with Views, at warehouse rates.
But the Elevators probably wouldn't pass inspection. And the Air Conditioning would have to be fixed. It might well cost almost as much as a Class A space just to get enough systems running to make it inhabitable.
No, the Building is probably just a trap for unwary dreamers. And somehow our real estate world just isn't making them like they used to.
Part II: I get (some) answers
Update 29 May 1999: I had an interesting talk with a lawyer friend. Turns out that dead Buildings like this exist for a very simple reason: Asbestos. It's too expensive to clean them up, and it's too expensive to demolish them, too. So the owner defaults on the mortgage, but since the bank doesn't want the building either, it doesn't repossess it. So this building is most likely truly and literally useless, unless you want to be on the tail end of millions of dollars in lawsuits. I wonder if this means a strange kind of opportunity for the truly audacious individual, who would never have enough money to pay damages - so he'd just buy the building for $ 1, fix up the 11th floor,, admire the view and get cancer. Or would he? How dangerous is this stuff, anyway?
Unfortunatley, this wouldn't do much for the seller. The seller remains liable no matter what. Apparently clever owners of buildings like this one were selling them to shell corporations, which had no money and thus were not worth suing. So the EPA and Congress fought back by making former owners eternally liable.
So, bottom line is that the building and property are worth an actual negative sum of money (minus a million dollars or so, most likely). What does this mean for the private buyer who just wants a nice view for a change? Good question. Because the funny thing is that the mortgage doesn't need to be paid. You could likely move into the place for $ 1 plus the electric bill. And die young.
Oh - my lawyer friend gave me some really good advice: Do what you know. Buy Internet stocks, because you're an Internet kind of guy. Don't even consider real estate.
He's right. But I still need to live and work someplace, right?
Drop me a line
Return to Portfolio
Images Copyright (C) 1999 David H Dennis - All Rights Reserved