Mohamed Hadid’s last stand

The celebrity spec developer has spent years in property battles — and he’s got some fight left

National Issue /
Jan.January 06, 2022 07:30 AM

Mohamed Hadid (Photo by Kevin Scanlon)

For a property that once generated headlines around the world, the sale — when it finally came — landed with a whimper. 

On an afternoon in early December, from an airy county courthouse in Santa Monica, a bankruptcy judge signed a court order approving an offer from a Ventura County construction firm to buy 901 Strada Vecchia partially built Bel Air spec mansion. 

The mansion — a project by the brazen developer Mohamed Hadid that was dubbed “Starship Enterprise” by its critics — had long ago been declared unsafe by a judge and ordered torn down. But for years a larger dispute over the structure unfolded like a drama worthy of Hollywood’s backyard, with civil and criminal cases and even a community service sentence for the larger-than-life Hadid. 

The December sale heralded an end to all that, bringing a transfer of ownership and a deadline for demolition. 

After the approval, Joe Horacek and his wife, Bibi, a couple who live next to the property and served as key antagonists to Hadid, said they were relieved. But the press, after years of eating up the story of the developer’s illegal spaceship mansion and its high-profile opponents, barely registered the sale. Hadid mostly seemed detached, referring questions about the sale to one of his lawyers, Jeff Reeves, who allowed that his client was “sad that the project has gone the way it went” but cast the final sale as a procedural tic that came long after Hadid had effectively lost the property. 

I think he’s past it,” said Reeves. “He’s a forward-looking guy.” 

Second front

He also had another battle to fight. 

Best known as the father of two supermodel daughters and for his stints on reality television, Hadid, a onetime refugee who was born in the then-Palestinian city of Nazareth, moved to Northern Virginia as a teenager in the 1960s. 

As a young man, he attended two colleges in North Carolina, spending one season as a placekicker for Winston-Salem State. He didn’t earn a degree, but soon was hustling his way into American-style real estate success, eventually establishing a career built on high-risk, often bombastic projects. 

I was the guy who started building these ultra, ultra, ultra-big houses,” he declared in a profile published by this magazine in early 2020. 

He also cut his teeth through countless political and legal battles, including with fellow developer Donald Trump. Both men were pursuing expensive Aspen hotel projects when Trump resorted to what Hadid has characterized as racist smears. 

Donald started coming into town and he had cartoons of me on a camel, with a harem behind me,” Hadid recalled years later.

But roughly a decade ago, when he revealed his ambitions for a luxury development near a popular municipal park outside Beverly Hills, the plans touched a major public nerve — even by the standards of a Hadid project. They also ignited a high-stakes, convoluted land use battle that’s dragged on for years — and, more recently, cast a glaring spotlight on the maneuverings of the developer at the center of it all.   

This guy owes me over $30 million,” Ronald Richards, the attorney who emerged as Hadid’s primary opponent in the saga, said in one of several conversations this fall. “Unfortunately, not everyone understands, basically, the games people could play to try to buy delays and stop a foreclosure to get more time.”  

Reeves, Hadid’s lawyer, countered that his client has simply been trying to protect himself. 

There really are two sides to this story, man,” he said. “Mr. Hadid is not the bad guy.” 

The 600-acre patch 

Franklin Canyon Park, the public land on the edge of the disputed properties, is a mountainous, 600-acre patch of chaparral and woodland. It’s open space that serves as a beloved refuge for both nature and the public near the geographic center of sprawling, highly developed  Los Angeles — “a gem hiding in plain sight,” in the words of Los Angeles Daily News gardening columnist Joshua Siskin.

Hadid, too, saw a gem a developable diamond in the rough.

He began dreaming of building there more than 20 years ago, then eventually bought six parcels that combined for nearly 70 acres atop a hillside adjacent to the parkland. It’s a unique location even for luxury L.A. spec developers, with views of the Pacific Ocean on a clear day. 

In legal filings, Hadid has downplayed his original development plans, but one document reviewed by the New York Times indicates his decades-long hilltop dream once included a compound of estates (including a 100,000-square-foot home), a horse stable, a helipad and three guard towers with their own living spaces. Construction equipment would have been brought in by helicopter.  

In 2011, Hadid obtained permits and began grading the land. But after hikers noticed the construction — the property intersects with Hastain Trail, a popular route that winds through the park — he would soon face a lawsuit, a concerted opposition campaign and national media attention. A 2016 appeals court decision went in his favor, giving the developer “every reason to believe that he was finally free to resume developing,” according to one filing. 

But an even nastier battle was still years away.    

A new foil

In 2017, Hadid arranged for the two entities that owned the Franklin Canyon land to borrow “a maximum of $25 million” from Romspen, a Toronto-based investor that specializes in “out-of-the-box lending.”

Hadid defaulted in 2019, and Richards got involved in 2020. 

The Beverly Hills attorney, who once put his silver tongue to work as a television news legal analyst for the Michael Jackson trial, bought the Romspen loan as the sole manager of a new entity called Give Back LLC. 

Give Back, Richards has repeatedly promised, is only interested in staving off development.  

This property,” the lawyer said in November, should only be used for nature and public green space, “not for building gargantuan spec homes that are going to be ecologically disastrous in a very fragile ecosystem.” 

As a representative of the largest creditor in the case — Give Back says it is now owed $30 million, while Hadid argues it’s $25 million — Richards moved to foreclose on the debt in January 2021. 

Hadid countered with bankruptcy. 

Vanishing escrow

In May, amid an escalating legal fight, a potential buyer surfaced in the form of an LLC called Pacific Green Vista, although the buyer’s actual identity was undisclosed. In a court filing, Hadid nevertheless claimed Pacific Green Vista had agreed to buy two of the six lots for $34 million, enough to pay off the debt, but the deal quickly fell through. At one point, a $1.5 million escrow deposit, funded by Pacific Green Vista and supposedly locked up, also vanished, only to be replaced by $1.1 million in new funds. 

Hadid, it would later emerge, had directed the escrow money to be transferred back to its source — without consulting his lawyers — and replaced it after securing new loans. 

He does things without talking to his counsel, behind our backs, and I can’t have that happening,” the bankruptcy judge, Sheri Bluebond, said in one hearing after receiving a status report about Hadid’s escrow shuffling.  

In July, the Franklin Canyon properties were listed for $100 million. In September, Hadid cut the asking price by half, but no new buyers surfaced. A court-run auction also failed to produce much interest, but in late October, just hours before the deadline for bids, Sahara Construction — the same Ventura County-based firm that was then negotiating to buy Strada Vecchia — showed up with a letter of intent that hinted at a potential $37 million offer. 

First and foremost, Sahara only became aware of this opportunity last week,” a lawyer representing the company wrote to a lawyer representing Hadid’s bankrupt entities. “My client is moving as quickly as possible under the circumstances.” 

It was an intriguing development, prompting a flurry of fresh speculation — and effectively delaying proceedings for weeks, as the court granted the company more time for due diligence. (Sahara has not disclosed its intentions for Strada Vecchia or the reasons for its interest in the Franklin Canyon properties, and representatives for the firm did not respond to interview requests.) 

In early December — with Richards still owed tens of millions of dollars and no buyer in sight — the case took another turn: The judge, citing Hadid’s abrupt escrow withdrawal and the conflict of financial interest it created, ordered that a trustee take over control of the two bankrupt entities. 

No matter how you spin it,” Richards said, “it’s a horrible day for Hadid, because the judge said she didn’t trust him to manage the company.” 

Hadid and his team chronicle a very different version of events: In legal filings, including a civil suit in May, the developer argues that he, too, has always been conservation-minded — and that he’s the victim of a “malicious, fraudulent scheme” orchestrated by Richards, along with the socialite and financier Alexander von Furstenberg, to “essentially steal” the property. 

Hadid has a reputation for serial rule bending — he’s been accused of hiding assets to avoid court-mandated back payments to a former chauffeur, and dodging his community service from the Strada Vecchia sentencing. He’s seen by some as stalling and playing legal games with the Franklin Canyon case. 

But the real manipulator, Reeves contends, is the opposition.  

In terms of people who are skilled at playing ‘this game,’” Hadid’s lawyer said, “I would say that is a phrase that applies to Ron Richards and Give Back, and what they’ve been doing in this case.” 

The von Furstenberg connection

On a sunny day in late February, Hadid had an interesting lunch date. 

The meeting, at a restaurant in Century City, had been encouraged by a mutual friend of Hadid and von Furstenberg, who lives near Franklin Canyon and often hikes there, according to a lawsuit filed by Hadid. Von Furstenberg, according to the suit, was interested in buying some of the land for conservation. Hadid, in trouble on his loan, needed cash. 

According to the filing, the meeting was a success, with von Furstenberg agreeing to pay $20 million for an interest in two of the six parcels. Hadid would also contribute a matching in-kind stake; the two parcels would then be dedicated for conservation, and Hadid would have an infusion of capital to help pay his debt.  

This was intended to be a gift,” the suit says, “that both men could take pride in, knowing that the dedicated parcels would be enjoyed by their family and the public for many generations to come.” 

Instead, Hadid alleges, von Furstenberg turned his knowledge of his would-be partner’s financial vulnerability against him. For months after the meeting, the developer alleges, von Furstenberg stalled, and then pulled out of the deal and hatched a plan with Richards to form Give Back and wrest control of the entire property. 

Once Give Back owned the debt,” the suit says, “Give Back could then declare the loan in default knowing that without von Furstenberg’s $20 million, Hadid would have a difficult time retiring the debt.”  

Hadid also accuses Richards and other adversaries of tarnishing his reputation on social media and in the press. He accuses Richards of planning “low-key, sham” foreclosure sales in an effort to hastily take the property, and of repeatedly approaching interested would-be buyers and scaring them away with threats that a wealthy new owner of the controversial property would be “ostracized” from Beverly Hills. 

He likes to try to contact these buyers,” Reeves said of Richards, “and I would submit a lot of these buyers don’t like that kind of attention and get spooked.” 

That tactic, Hadid’s legal team alleges, extended to the mysterious Pacific Green Vista LLC. 

The entity, Hadid’s team has said in court, is tied to the Saudi royal family, but also insisted on confidentiality. In May, according to a legal filing, Pacific Green Vista agreed to buy two of the six lots for $33.5 million, but the next month, after it had made the $1.5 million deposit, Richards badgered the escrow agent into revealing the source of the funds. 

Soon after, in Hadid’s telling, the principal in Saudi Arabia began receiving calls from unknown numbers, including one from a Los Angeles area code, and was outraged that his anonymity had been breached. The buyer, citing a nondisclosure agreement violation, backed out of the deal and demanded the deposit back, leading Hadid to drain the escrow account. Hadid spent the missing $400,000, he claimed, on property upkeep that was contractually approved. 

Of course the buyer was 100 percent legitimate,” Reeves said. “But the buyer was 100 percent interested in maintaining confidentiality.”

A lawyer representing von Furstenberg did not respond to questions about his involvement. Richards also did not respond to specific questions about Hadid’s allegations. 

Hadid’s suit against Richards and von Furstenberg has so far gotten nowhere; Richards and von Furstenberg have also filed anti-SLAPP suits, which are meant to counteract baseless lawsuits that are intended to intimidate speech or drain defendants’ financial resources. 

Good outcome?

Regardless of whether the legal system ultimately finds any merit in it, Hadid’s aggressive civil suit nevertheless offers insight into the 73-year-old developer’s willingness to fight. And the judge’s trustee appointment — a development Hadid’s team did not oppose — could offer him another chance for an eventual victory: The trustee, in a process that could play out for months, perhaps with a renewed search for wealthy buyers around the world, will likely seek a high price.

Now, his lawyer said, Hadid is focused on making sure that process, and an eventual auction, plays out “in a fair way.” 

And if that happens,” Reeves continued, “it will fetch upwards of $100 million. And he owns the equity, so that would be a good outcome. Not the way he dreamed about it starting 20 years ago, but it would be a good outcome.” 


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