Cojo and Jalama Close Escrow
by Ethan Stewart
The news took its time solidifying. Rumors from the Gaviota speculation from Montecito, and worst case scenarios from everywhere in between eventually gave way to an official statement issued on January 10: the historic, sprawling, and awe-inspiring Jalama and Cojo ranches — collectively and popularly known as the Bixby Ranch — had officially sold. Despite falling in and out of escrow numerous times in recent months, all but chasing away any would-be investor (including Donald Trump), the approximately 25,000 acres of coastal rangeland were finally purchased for $136 million by the East Coast investment firm Baupost Group. Sold by local real estate company Kerry Morman and Associates — which specializes in multimillion-dollar hunks of pristine California land — Bixby contains 109 developable lots. But in the wake of arguably the largest private land deal in the history of the county, the new owners’ lawyer, Steve Amerikaner, said of his clients, they “absolutely do not have any specific plans yet for the land.”
Reactions to the monumental sale varied throughout the county, with environmentalists simultaneously bemoaning the likelihood of development and expressing hope that the new owners would create land conservation easements and/or public access in this currently restricted area. As Gaviota Conservancy Director Mike Lunsford put it, “People who spend big money like this usually can afford [and have incentive] to do stuff that protects the environment. That is, if they are inclined to do so.” And the Santa Barbara Land Trust’s Michael Feeney pointed to last year’s sale and conservation easement deal involving the Central Coast’s Hearst Ranch, saying, “Obviously there is a very good conservation play there, but whatever is going to decide the future of Bixby is bigger than the Land Trust … though we’d certainly like to be a part of it.” Typically at odds with the environmental community, 3rd District Supervisor Brooks Firestone — who met briefly with the new owners before the deal became official — seemed equally cautious. “I don’t know what to say,” he said. “I have no idea what they’ve got planned, but I’m a conservative guy, and I don’t like to see any ranch change hands, especially a big one like this.”
The sale of the ranches, which have been operated as a cattle ranch for the past century and are home to the Point Conception lighthouse and countless Chumash cultural sites, was a tightly guarded industry secret. Phone calls to Baupost were met with the reply, “Company policy is not to comment on any investment.” While Amerikaner admitted to knowing little about Baupost, he did comment that the company has a “fair amount of real estate development experience” and described the investors as “very careful and methodical folks.” He added that the firm is committed to opening local dialogue, assessing the property, and “figuring out what works best” in terms of its development plans.
Similarly, Linda Miller — whose name appears on all the county papers associated with the deal — said in the official press release about the sale, “We appreciate the beauty of this land and the resources it shelters … . We have no preconceived plans for the property and believe that any future plan will only be possible after extensive consultation with the public, community leaders, elected officials, environmentalists, government officials, and longtime local ranchers.” A native of Lake Arrowhead, Miller is the head of Coastal Resources Management, the limited liability corporation formed by Baupost solely to carry out the Bixby Ranch purchase, and is a longtime associate of the Baupost firm.
The Baupost Group as a whole is a Boston-based investment firm managed by the world-renowned investment and stock soothsayer Seth Klarman. Since its inception in the early ’80s, Klarman — a Harvard graduate — grew the group out of about $100 million in start-up funds into an impressive $6 billion firm that earns its members an average annual return of nearly 20 percent. Known by fellow investors as a particularly shrewd and calculating man who takes into account a wide range of risks before pulling the trigger on an investment, Klarman is the author of a book that has achieved legendary status among investors throughout the world. Although it’s been out of print for several years, Margin of Safety regularly fetches more than $1,000 on eBay. Speaking anonymously, a Boston investor who has worked with Baupost said of the group, “These guys are big-time. They don’t make mistakes, and they are seldom denied.”