Neverland to Go on Market Again?

by Roberta Murphy

(It is with sadness that we learned of Michael Jackson’s death due to a heart attack this afternoon, apparently at his Holmby Hills mansion.  In the days ahead, many will be wondering about the fate of Neverland. Our prayers and kind wishes are extended to the Jackson family.)

Over two years ago, we were speculating about the fate of Michael Jackson’s Neverland and wondered if it would become a Ghost Land instead. The animals were gone, helicopter landing pads were still–and recently, according to the Wall Street Journal, bats took to hanging from the doorway over Jackson’s once-famous gaming arcade, leaving piles of guano below.

Thought Neverland could never come back to life? Well, never say never.

A year or so ago, Michael Jackson defaulted on his $24.5 million mortgage which was bought for $23 million by a Los Angeles investment group. They, in turn, formed a private partnership with Jackson with the intent of bringing Neverland to a fruitful investment. There is speculation that the Santa Barbara County property could eventually and realistically be worth $70 to $90 million.

In the meantime and to date, Colony Capital LLC has spent over $3 million and hired 80 workers to rehabilitate Neverland. Electrical and plumbing systems are being brought up to date, and landscaping is being redone. The Neverland gates, amusement rides and zoo may be gone, but evidence of Neverland’s former glory remain–including two railway lines , a 50-seat theater and the English Tudor-styled buildings.

Michael Jackson paid $19.5 million for Neverland in 1987 and poured hundreds of million into it over the next 18 years. In 2005, after Jackson was cleared of child molestation charges, he swore he would never return to Neverland. The estate was abandoned in July of that year and was reported to have been subsequently marketed to David Beckham and his wife, Victoria (Posh Spice). The price tag expected in those heady real estate days?

$50 million.

Neverland may have been decimated not so much by Michael Jackson’s legal troubles, or even its eventual neglect, but by market conditions that have decimated property and home values all over the country. And perhaps Neverland’s sale at $23 million simply reflects a market bottom–of sorts.