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Tom Barrack on Plans for Michael Jackson's Neverland Ranch

i hope this means the estate will chip in and get it bck
 
8701girl said:
i hope this means the estate will chip in and get it bck
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The MJ Estate don't appear to want it. To be honest there's not much they can do with it even if they bought it back.
It costs a fortune to maintain so it's a burden that the MJ Estate, as a business entity, could do without.
Even if Paris and Prince could somehow get the money to buy it, they don't earn anything like the money just to pay of the maintenance on something as huge as Neverland.
 
MJTruth said:
The MJ Estate don't appear to want it. To be honest there's not much they can do with it even if they bought it back.
It costs a fortune to maintain so it's a burden that the MJ Estate, as a business entity, could do without.
Even if Paris and Prince could somehow get the money to buy it, they don't earn anything like the money just to pay of the maintenance on something as huge as Neverland.
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I agree. It isn't fiscally responsible to buy something that would COST money to run and basically be a huge headache for all concerned. If they could work out a way to get around the zoning laws to somehow make it into a profitable venture of some kind, that might work, but as it stands at the moment, it just isn't viable. Even Michael, at the peak of his career, was shovelling vast quantities of money into the place. $30000 per month, just for the flower gardens, for example.

2019 was not a good PR year for the ranch. Colony Capital dropped the price down to $31 million, which is quite reasonable considering the size and the history of the place and still, no takers. I think the company will wait a while for the market to improve and then put the property back on the market at a later time.
 
elusive moonwalker said:
Thanks fo the update. Good. Hope it becomes a rock around barraks neck.
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That's very unkind, considering he helped Michael to refinance and stay solvent towards the end of his life, without having to resort to a fire sale of his other assets.

Also, Colony Capital has done a brilliant job of renovating and restoring the property, which had begun to look a bit worse for wear, in the years just prior to and just after Michael's passing.
 
Mikky Dee;4281982 said:
That's very unkind, considering he helped Michael to refinance and stay solvent towards the end of his life, without having to resort to a fire sale of his other assets.

Also, Colony Capital has done a brilliant job of renovating and restoring the property, which had begun to look a bit worse for wear, in the years just prior to and just after Michael's passing.
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Sadly, billionaires don't get rich by making generous deals (and we know Tohme was involved in settling the deal too).
The deal with MJ meant: “For every dollar the company (Colony Capital) invested in the property, its equity would increase. This meant that while Jackson—and, later, his estate—retained a stake in the property, it decreased on paper as time went on.” (Ref Forbes). So while MJ (and later MJ Estate) still co-owned the property, the value of their share decreased every day.

It was also agreed that MJ would not have any say in the sale of the ranch: '... when Colony Capital receives an offer for the ranch (even under the fair market value), they would give MJ (and later his Estate) 5 business days to match the offer. If MJ (MJ Estate) doesn't match the offer, it would be deemed that MJ (MJ Estate) consented to the sale.'

After a sale, Colony would receive 12.5% (a minimum of $3.3 million) of the net price of the ranch sale, as a 'success fee', for 'maximising the value of the ranch'.

So Colony clearly had an incentive to maximise the ranch value ie to achieve the best price and thereby gain a higher success fee.

Plus there is the disputed 10% fee to Tohme for setting up the finance deal.

The interest rate agreed for the deal was eye-watering: $20 million at Libor plus 8.5% (11.37% in 2008) plus
$ 3 million at Libor plus 14% (16.87% in 2008)

https://www.scribd.com/document/255769393/Colony-Capital-MJ-Neverland-Deal
 
Hes part of the santa barbara establishment. His involvement and use of thom in pullibg mj in. He business is based on vulturing over those in trouble for his own gain.
 
elusive moonwalker said:
Hes part of the santa barbara establishment. His involvement and use of thom in pullibg mj in. He business is based on vulturing over those in trouble for his own gain.
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Yep.

His approach to investing is as strikingly original as the man himself. Most celebrated real estate operators these days are in the real estate investment trust (REIT) business--Sam Zell at Equity Office Properties and Equity Residential Properties, Steve Roth at Vornado--but they tend to focus on buildings with strong tenants that can reliably deliver annual returns of 7% or 8%. Barrack shuns what's known in the trade as "chasing yield." He's aiming for returns double or triple that size. To get his gaudy numbers, he'll go to the far corners of the globe, looking for underappreciated assets he can buy cheap, fix up, and resell, usually within about five years. If a potential deal is complicated or politically sensitive, so much the better. Barrack cherishes thorny situations because they scare off most other bidders. Auctions aren't for him. "How do you congratulate yourself when you've outbid eight of the smartest people in the world?" he marvels.

There is much method to his madness. By focusing on distressed properties with lower pricetags, he limits his risk and maximizes his potential gains. He has 182 employees around the world who monitor local markets, looking for opportunities he can exploit. At the same time, he buys primarily high-quality properties--those that, if skillfully resurrected, can command a premium.
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https://archive.fortune.com/magazines/fortune/fortune_archive/2005/10/31/8359143/index.htm
 
myosotis;4281989 said:
Sadly, billionaires don't get rich by making generous deals (and we know Tohme was involved in settling the deal too).
The deal with MJ meant: “For every dollar the company (Colony Capital) invested in the property, its equity would increase. This meant that while Jackson—and, later, his estate—retained a stake in the property, it decreased on paper as time went on.” (Ref Forbes). So while MJ (and later MJ Estate) still co-owned the property, the value of their share decreased every day.

It was also agreed that MJ would not have any say in the sale of the ranch: '... when Colony Capital receives an offer for the ranch (even under the fair market value), they would give MJ (and later his Estate) 5 business days to match the offer. If MJ (MJ Estate) doesn't match the offer, it would be deemed that MJ (MJ Estate) consented to the sale.'

After a sale, Colony would receive 12.5% (a minimum of $3.3 million) of the net price of the ranch sale, as a 'success fee', for 'maximising the value of the ranch'.

So Colony clearly had an incentive to maximise the ranch value ie to achieve the best price and thereby gain a higher success fee.

Plus there is the disputed 10% fee to Tohme for setting up the finance deal.

The interest rate agreed for the deal was eye-watering: $20 million at Libor plus 8.5% (11.37% in 2008) plus
$ 3 million at Libor plus 14% (16.87% in 2008)

https://www.scribd.com/document/255769393/Colony-Capital-MJ-Neverland-Deal
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Wow, that sounds like a terrible deal indeed. Were there any alternatives at the time? I know this is a newbie question. I haven’t gotten around to looking into all of this yet.
 
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ScreenOrigami;4281993 said:
Wow, that sounds like a terrible deal indeed. Were there any alternatives at the time? In know this is a newbie question. I haven’t gotten around to looking into all of this yet.
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I don't know how much MJ truly 'understood' the Colony deal. It's possible / probable he was trusting Tohme Tohme too much, as he did with the TII contract.
I'm guessing that he thought Colony would get a good enough price for Neverland when it sold that he'd be able to repay his Colony commitments and have enough left over to buy another property. We know he was looking at at least one house near Vegas. And he expected to have money from TII.

The interest rates and fees seem extremely high to me, but maybe MJ didn't have the interest / time / resources to double check on Tohme's dealings. Maybe Neverland was such a 'tainted' or upsetting name in his eyes, that he didn't really want to think about it.
 
MJTruth said:
The MJ Estate don't appear to want it. To be honest there's not much they can do with it even if they bought it back.
It costs a fortune to maintain so it's a burden that the MJ Estate, as a business entity, could do without.
Even if Paris and Prince could somehow get the money to buy it, they don't earn anything like the money just to pay of the maintenance on something as huge as Neverland.
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Yes, I saw on Twitter that there's an annual Property Tax of 1%, so as the taxable valuation of Neverland is about $33.5 million, the annual tax is $350k, which = over $1million every 3 years.

That's before any security or maintenance costs.
 
myosotis said:
I don't know how much MJ truly 'understood' the Colony deal. It's possible / probable he was trusting Tohme Tohme too much, as he did with the TII contract.
I'm guessing that he thought Colony would get a good enough price for Neverland when it sold that he'd be able to repay his Colony commitments and have enough left over to buy another property. We know he was looking at at least one house near Vegas. And he expected to have money from TII.

The interest rates and fees seem extremely high to me, but maybe MJ didn't have the interest / time / resources to double check on Tohme's dealings. Maybe Neverland was such a 'tainted' or upsetting name in his eyes, that he didn't really want to think about it.
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Everything you said makes a lot of sense. Thank you. :)
 
When Michael passed away he did wanted to buy it again but he didn't like neverland anymore because it gave him bad memories the part of me feel they should keep neverland and do something with it. Michael wanted to be a place sick kids can go to. then apart of me feel they shouldn't because the place did give Michael bad memories samething goes with all of us. and what happen last year don't make it any better.

so. i really hope either his children, family, or estate buy it someday.

at the end of the day people don't have to go there if they think Michael is guilty. the place is too beautiful to be taken down. :(
 
MJTruth said:
The MJ Estate don't appear to want it. To be honest there's not much they can do with it even if they bought it back.
It costs a fortune to maintain so it's a burden that the MJ Estate, as a business entity, could do without.
Even if Paris and Prince could somehow get the money to buy it, they don't earn anything like the money just to pay of the maintenance on something as huge as Neverland.
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buit the kids always wanted go baack
 
myosotis said:
Sadly, billionaires don't get rich by making generous deals
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Agreed, but Michael signed the deal, nevertheless; it obviously was a deal that suited him better at the time, rather than just selling the property outright. I have a feeling that it wouldn't have been easy to sell it, then, even if he had gone down that road, due to the Global Financial Crisis that occurred at around the same time.
 
elusive moonwalker said:
Hes part of the santa barbara establishment. His involvement and use of thom in pullibg mj in. He business is based on vulturing over those in trouble for his own gain.
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People always want to see Michael as some helpless lamb waiting on the chopping block, when really, he was an astute and cunning businessman. Everyone who worked with him in the business arena says this.
 
Mikky Dee;4282035 said:
I have a feeling that it wouldn't have been easy to sell it, then, even if he had gone down that road, due to the Global Financial Crisis that occurred at around the same time.
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That’s a really good point. If it’s hard to sell now, it was certainly near impossible to sell it back then.
 
Things has change since the 90's. neverland was probably cheaper then it probably would cost today. yeah it cost a lot money back then but like i said things change since then.

Michael was most definitely a business man as well. he needed money just like the rest of us. he was human. though. some stuff he did do business for was the fans and the children. i really thank him for doing that. bless him.
 
Mikky Dee;4282035 said:
Agreed, but Michael signed the deal, nevertheless; it obviously was a deal that suited him better at the time, rather than just selling the property outright. I have a feeling that it wouldn't have been easy to sell it, then, even if he had gone down that road, due to the Global Financial Crisis that occurred at around the same time.
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We have evidence that Michael was either not fully in control of Tohme, or that Michael had very changeable views and opinions at that time:

viz: 1. Michael said that he agreed to only 10 TII concerts but was contracted for 50 - but then Michael was apparently also aware of the 50-concert run and that he would receive another Guinness record for it.

2. Tohme signed a contract with Juliens to sell the contents of Neverland - then Michael 'heard about it' (his friends say they talked him out of it) and the deal with Juliens was withdrawn at the last minute, after online bidding had already started.
The broken contract was said to cost MJ at least $1 million in compensation.

https://www.theguardian.com/music/2009/apr/15/michael-jackson-sale-cancelled

People always want to see Michael as some helpless lamb waiting on the chopping block, when really, he was an astute and cunning businessman. Everyone who worked with him in the business arena says this.
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Unfortunately his 'astuteness' didn't prevent him from being over $400 million in debt at the time of his death. His purchase of song catalogues was certainly excellent business, but he seemed to monitor his income (ensuring high percentages from recordings) more than his outgoings which were huge and seemingly uncontrolled. He forgot Mr Micawber's principle:

"Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery."

People with bad debts can rarely get good deals on new finance arrangements.


https://www.latimes.com/local/lanow...e-ln-michael-jackson-debt-20130812-story.html

Jackson’s biggest expense was $30 million in annual payments on his debt when he died in 2009.

Interest on the loans grew over the years, ranging from a little less than 7% to 16.8% annually, Ackerman said in a downtown Los Angeles courtroom.

As early as 1993, Jackson owed $30 million, a figure that grew to $140 million by 1998. From June 2001 through June 2009, Jackson’s debt increased by about $170 million. When he died, Jackson owed $400 million to $500 million, Ackerman testified.

Ackerman said Jackson received no loans after 2007, and at the time of his death, he was three to four months behind on payments for the San Fernando Valley home where his mother lived.

“He was tapped out,” Ackerman said. ..................................

But Ackerman, whose testimony is continuing, said the singer was in a “precarious financial position.”

He provided details of Jackson’s 1985 purchase of the ATV music catalog, which contains many Beatles songs, for $49.5 million. Jackson merged it with Sony’s catalog a decade later, receiving $115 million, along with a guaranteed $6.5 million a year, which was increased to $11 million annually in 2008.

The CPA also testified that Jackson’s tours in the 1990s were not moneymakers. He said Jackson broke even on the Dangerous tour and lost $11.2 million on the HIStory tour.
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Thome was a plant put in there to give colony what they wanted. His conflict of intrest was totally unethical and would prob be illegal in some countries and/or would certainly make any contract he was involved in debatable if not invalid.
 
MJTruth said:
To be honest there's not much they can do with it even if they bought it back.
It costs a fortune to maintain so it's a burden that the MJ Estate, as a business entity, could do without.
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I visited Graceland last year. The upkeep probably isn't as much as Neverland, but I think they make a lot of money there.
 
Piek said:
I visited Graceland last year. The upkeep probably isn't as much as Neverland, but I think they make a lot of money there.
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I think there is no option to turn Neverland into an attraction due to local zoning laws.
 
Last month, it was announced that the former home of Michael Jackson called “Neverland Ranch” and now called “Sycamore Valley Ranch” was removed from the listing of properties on sale from different Estate Agents.

However, today, the property is back on the market with the selling price of 2019 of $31 Million.

Suzanne Perkins Estate agent has relisted the property on their website emphasizing on the fact that tour will be only given to those
who can provide a financial statement background letter to prove they can purchased the property.

Sorry fans, the future of the once home of Michael Jackson is still unsure!

https://www.suzanneperkins.com/portfolio/sycamore-valley-ranch/
 
NatureCriminal7896;4283506 said:
Last month, it was announced that the former home of Michael Jackson called “Neverland Ranch” and now called “Sycamore Valley Ranch” was removed from the listing of properties on sale from different Estate Agents.

However, today, the property is back on the market with the selling price of 2019 of $31 Million.

Suzanne Perkins Estate agent has relisted the property on their website emphasizing on the fact that tour will be only given to those
who can provide a financial statement background letter to prove they can purchased the property.

Sorry fans, the future of the once home of Michael Jackson is still unsure!

https://www.suzanneperkins.com/portfolio/sycamore-valley-ranch/
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If I ever win big money..... I'm buying it & restoring it the exact same way he had it
 
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I have my opinions with neverland being close and open. Michael pretty much was done with it once the trials ended. it's a beautiful place. but apart of me feel it should be sold and another part of me feel it shouldn't.

maybe one day they will do something to it for michael or maybe one day new owners will.
 
Turn it into a wildlife preserve, leave the main house as a MJ museum. Michael would be happy with that. This would also lower the upkeep costs since only the main house would need to be maintained for vistors.
 
They already said that it can't be made into a museum because one it would cost a lot of money to get the ranch back which the estate and his family don't have and two because due how neverland is made it will make a lot of traffic and the roads there are not accessible for it.

I do hope one day we will get something out of Michael that don't have be neverland but still as great as neverland. there a hotel thingy coming out soon with his brothers in the next few years so i'll keep a info update on that.

i do hope one day Michael does get a museum with everything he loved and dream of. he really deserve one.
 
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