Twenty-five years ago this week, one man thought he would answer the problems for Malibu real estate with a property auction on the Malibu Pier, where one of the items up for sale was the pier itself.
By Johalmo Morales/Special to the Malibu Times
On Feb. 10, 1980, the Southern California sun lit the stage for the Malibu Pier Auction, an event that garnered front-page coverage from the Los Angeles Times and other newspapers. There was even a helicopter there to take aerial pictures.
The day of the auction signified the end of Malibu real estate for Michael Stearns, the man who concocted the event. The Malibu Pier auction was actually intended to do the opposite; put him and all others in local real estate back in business.
Inflation during the 1970s had reached immense proportions. Houses were not selling because prime interest rates were as high as 20 percent. “When I started in the business in ’72, I remember a beachfront house that sold for $140,000 on Carbon Beach. Granted it was a real fixer-upper, but in 1979 twice that amount couldn’t have bought the lot it sat on,” Stearns wrote in his unpublished book, “Essays in Smoke and Mirrors.”
The initial idea of the auction actually was conceived seven months earlier.
“On August 10, 1979, I began what I thought would be the answer to the problems in the Malibu real estate market, and maybe the entire country,” Stearns wrote.
The plan, like any other auction, was to place sellers and buyers in one location and sell hard.
Stearns acquired an auctioneer’s license and sent out feeler letters to the brokerage firms explaining his idea. Given the current situation, Stearns received a small response; one, he wrote, that would not have been given under better circumstances. Stearns also agreed to split the commission 50/50 with the listing offices. This perked the interest of some firms.
However, the auctioning of beach houses alone, Stearns felt, was not enough to capture the public’s attention. For some time the Malibu Pier was rumored to be on sale; if true, it could be the perfect place and item to kick his auctioning idea to the next level. But there were hurdles Stearns had to clear prior to the event. No price had ever been stated for the Malibu Pier and Stearns was not completely sure if the owner, Bill Huber, wanted to sell. Huber purchased the pier from the builder of the structure, Frederick Rindge, in 1943, 40 years after it was built. The other hurdle was lack of funding to advertise the event. To make up for that, press releases were sent to newspapers.
Set on the idea that the Malibu Pier was necessary to make the auction a success, Stearns went to speak with Huber. Surprisingly, after a verbal presentation of the auction, Stearns asked Huber how much he would charge to rent the pier, “Nothing, if you’ll put the pier up for auction too,” Huber replied.
As soon as Stearns notified the media that the auction would take place on the pier and that it, too, was going to be auctioned, everyone became interested. There was difficulty keeping up with phone calls from the media and the number of properties looking to be included in the auction.
Working with Stearns at the time were Jay Rubenstein, who worked in sales, and Earle Dugan, who worked in advertisement. “It was a three-man office,” said Rubenstein, who added they hustled to stay in business.
Stearns “was being stretched thin trying to pay the printing costs for all the brochures that were being added to the catalog. Each property had its own pictorial brochure complete with dimensions and descriptions.”
Sunday, Feb. 10, 1980, the day of the auction, was a perfect sunny Southern California day, Rubenstein recalled. Theoretically, the Malibu Pier auction was supposed to be a big success. It did not turn out that way. “Around 50 properties were in the auction,” Rubenstein said. But he said he remembers only selling one property that day. “People were looking for deals,” but the problem was that sellers wanted more than what buyers were bidding. After the auction, phone calls were made to try and get deals, but they did not happen. A few weeks after the auction “the weather got worse.” The heavy rain and mudslides made the situation horrible.
As for the Malibu Pier, two bids were made at $3 million and $3.1 million, but Huber wanted more. The pier was later sold to the state.
The three-man office cleared out and each went his separate way. Stearns used up all the resources he had in putting together the auction. In the end, he was left with nothing in Malibu real estate.
Currently, a portion of the pier is under repairs, and it is expected to be completely open in the spring.