Buying a Piece of History
Descendants of original Spanish land grant sell last portion of property.
By DANNY KING
Staff Reporter
Were it not already dotted with oil drilling equipment, the sale of a scrubby patch in Culver City might have received more notice.
Still, the deal for the otherwise nondescript 12.8-acre site on the south side of Jefferson Boulevard marks the passing of a piece of Los Angeles history.
When eight members of the Machado family recently signed papers transferring ownership to Calabasas developer Mark Webber, they sold off the remaining large piece of the original 14,000-acre Rancho La Ballona still owned by the descendants of its land-grant owner.
The eight sellers, who range in age from 35 to 84 years old, are fourth- and fifth-generation descendents of the brothers, who claimed the property for cattle grazing rights in 1819.
“It’s the last piece of property they own together, to my knowledge,” said Arnold Graham, partner at Glendale-based Graham Vaage & Cisneros and representative of the selling family. “There was a recognition that with each passing, there would be more splintering, and (the ownership) would be more difficult to reassemble for sale.”
Financial terms were not disclosed, but Chris Houge, a senior managing director at Insignia/ESG Inc. who represented two parties that expressed interest in the property last year, estimated the sale price at between $11 million and $13 million.
“None of us were desperate, and no one needed the money,” said Christina Machado Essex, great-great granddaughter of Ygnacio Machado and one of the sellers. “We just felt it was time.”
Complications abound
In 1819, the Spanish government granted Agust & #237;n and Ygnacio Machado, along with Felipe Talamantes and his son, Tom & #225;s, rights to all of the land Agust & #237;n could circumnavigate on horseback in a single day, according to Culver City Honorary Historian Julie Lugo Cerra. (Cerra, as it happens, is a descendent of the Machados, but was not one of the property’s sellers.)
The Machados have held the property ever since.
The original Ranch La Ballona stretched from the Pacific Ocean to Ince Boulevard, and from Baldwin Hills to Pico Boulevard. The State of California made the boundaries of the property official in 1868, and parcels gradually have been sold off.
Cerra, who estimated there are a few hundred descendents of the Machado brothers throughout Southern California, said the family has a reunion each October. Though family members generally keep a low profile, Cerra, Essex and cousin Fred Machado are all on the board of the Centinela Adobe, the historical society based out of the Westchester home built by Ygnacio Machado in 1834.
The property’s recent history is as complicated as its past was storied. Between negotiations and the escrow period with Webber, the family worked on making a deal for more than three years, during which time three members of the selling group died.
The property has been used for oil exploration since the 1920s, and two petroleum companies, Terra Exploration and Stocker Oil, had long-term leases on the site at the time of the proposed sale. Terra, which leased 8.5 acres for four wells, was amenable to a lease buy-out. Stocker, with one well on 3.5 acres, was not.
Further complicating a sale was the City of Los Angeles, which took an acre of the property through eminent domain in 1995. That acre, part of a sewer system expansion, not only factored in the family’s decision to sell the property, but also lengthened the process of the sale, according to Graham. “We had a deal with a buyer last year, but the city came back in and wanted to condemn another part of the property,” he said.
In addition, there were concerns from homeowners at Raintree Townhomes, which sits adjacent to the property, about the proposed development of a two building, 243,000-square-foot industrial-office “flex” project.
Seeing opportunity
“This is one of the most complicated deals we’ve been involved in,” said Webber, principal of Westway Development, which has built out 1.5 million square feet of commercial space throughout Southern California. “We’d put one issue away and another would come up.”
The site had been eyed by Home Depot and Lowe’s, according to Houge, but they backed away.
Ultimately, Webber bought Terra’s lease while working out a deal to allow Stocker Oil to continue using its well. Webber also negotiated a deal to allow subterranean rights to the City of Los Angeles for its sewage systems. Between the property purchase, lease buy-out and build-out of the site, Webber estimates an investment of between $40 million and $50 million. He expects to break ground in July and have the project completed in the first quarter of next year.
The idea of putting a quarter-million feet in a soft Culver City commercial real estate market concerns neither Webber nor Patrick Walsh, a partner at Commercial Property Group who represented Webber on the deal.
“There are probably six buildings in the area that are 100,000 square feet or larger, and they all have AAA-bond tenants,” said Walsh.
Among those are ad agency TBWAChiatDay, at 5353 Grosvenor Blvd., Fox Sports’ lease at a building at the Marina Freeway and Alla Road and Deutsch Advertising’s occupancy of 5454 Beethoven St.
