Auction date set for Hadid’s Franklin Canyon properties
An auction date has been set for the controversial Franklin Canyon-area land where Mohamed Hadid once envisioned an elaborate luxury compound.
The 65-acre land offering, dubbed “the Royalton Auction,” is being orchestrated by a bankruptcy court-appointed trustee and is scheduled for March 24. It will take place both live and by webcast, according to a release from the two auction houses hired by the court to conduct the sale. The property’s six parcels will be offered both individually and grouped.
The hilltop location comes with particularly loaded backstory — a fact alluded to by the auction house executives.
“Ours is not to decide what will be done with the property,” Jeff Tanenbaum, president of ThreeSixty Asset Advisors, one of the two firms, said in the release. “We know many would like it to remain for the exclusive use of hikers, but it is privately owned property … Our mandate is to identify interested parties and sell the properties to the highest and best bidders.”
The auction scheduling comes nearly three months after a judge appointed a court trustee to take control of the properties, the latest turn in a fierce land battle that had already dragged on for years. The two entities that own the hilltop land, Coldwater Development LLC and Lydda Lud LLC, filed for bankruptcy protection in January 2021 but had remained controlled by Hadid; at a December hearing, a bankruptcy judge wrested control after from the developer after a strange sequence of events that included Hadid’s surprise transfer of $1.5 million out of an escrow account to return funds a potential Saudi buyer who was furious over an alleged breach of a nondisclosure agreement.
At the time Ronald Richards, the high-powered attorney who emerged as Hadid’s main opponent and largest creditor in the dispute, described the trusteeship as “a horrible day for Hadid,” because the judge revoked control from the embattled developer. Hadid and his legal team, however, actually welcomed the trusteeship, on the hope that a sale orchestrated by a court-appointed arbiter could potentially fetch a high price. (Proceeds from any sale will first be used to pay off the entities’ debts, but remaining funds could potentially return to Hadid.)
“We think a trustee can ensure a sale that’s free from interference from those who don’t want to see that sale happen,” Jeff Reeves, an attorney for Hadid, said in December. “There are a lot of people that don’t want to see that property sold for a fair price.”
The fair price, Reeves said then, was north of $130 million; in the release, the auction house executives also point to a recent $131 million “as-is” appraisal for the property.
“Of course, being sold at auction, the value will ultimately be determined by the buyers,” added Mike Walters, president of Tranzon Asset Strategies, one of the two auction firms.
A sale could also bring some kind of closure to one of Los Angeles’ longest and most dramatic land use sagas. Hadid bought part of the property, which lies adjacent to Hastain Trail, a popular hiking area, in 2006 and the remainder in 2011. But a bitter dispute began after he announced plans for a lavish residential compound, with some neighbors and area residents vigorously fighting the development.
In 2020, before the entities’ bankruptcy declaration, a mysteriously funded Beverly Hills LLC called Give Back, operated by Richards, began buying the debts — the exact figure is disputed, but Give Back owns some $30 million in the property’s bank notes — in an effort to take control of the land and set it aside for public use. As that subsequent legal battle has played out this year in bankruptcy court, various potential buyers, including a Saudi purportedly connected to that country’s royal family and a Ventura County construction firm, have also surfaced only to ultimately lose interest, setting the stage for the trusteeship and scheduled auction.
The scheduling comes soon after demolition began on another highly controversial Hadid project, the never-completed Strada Vecchia mansion; in a recent interview the brazen Palestinian-born spec developer said he was turning his focus to projects in the Middle East, where he was more appreciated. Richards was not immediately available to comment on the auction scheduling.