perm filename DICK5.PL[1,VDS] blob sn#183290
filedate 1975-10-23 generic text, type C, neo UTF8
COMMENT ⊗ VALID 00002 PAGES
C REC PAGE DESCRIPTION
C00002 00002 3689 South Court
3689 South Court
Palo Alto, Ca. 94306
October 24, 1975
Dear Dick and Ellen:
I'm glad to hear that you are all still alive. Even though
you don't write, it seems like you are all doing well. As for me,
all is well here too. Vicarm is temporarily stable- in that no new
influxes of money are required at the present time, nor do I see an
immediate need in the future. I think the company can proceed on its
own in a viable manner now... although I have yet to get any personal
income out of the venture.
I'm glad you called to feel out my thoughts on the new
developments- land wise- in Petrolia.
Let me summarize what I gather is the current situation.
Howard came to you and said that he was negotiating with Clark for
the purchase of Clark's land by Bob McKee. McKee is not directly
dealing with Clark because they do not get along too well, while
Howard and Clark do. Howard says Clark wants $500 per acre for 640
acres, and wants $12k earnest money right now...in advance of closing
the deal (expected closing date sometime next January). Howard wants
the deal because he has arranged with McKee to buy or get a small
extra strip of land to improve his water sources. KcKee wants the
land so he can subdivide it, and also build a house for himself.
Howard and McKee want you because you have money to lend at this
time. In return, they offer you a discount price on choice acreage
adjoining your present land, or better vehicle access, or better
water sources, etc.... somethat depending on what YOU want.
You think McKee really needs the money, because he hasn't
really made much on the land deals he has already been into. This
may or may not be true. One thing to consider is that almost nobody
bought the land outright. Everyone is paying their $200 or so per
month mortgage TO McKee. They will be doing this for as much as the
next 10 or 20 years. Somehow, although McKee may not have too much
cash at the present time, he must have a hell of a lot of assets, for
he is still title holder [or creditor in case of default] to just
about all the land around Petrolia and Honeydew.
McKee is a prime example of entrepreneurmanship. He is doing
the AMERICAN DREAM, and should be given high praise for his success.
He has parlayed limited funds into large assets with great LONG TERM
potential. Even if he does nothing for the next few years, he
remains a landlord until all his buyers pay off their mortgages.
Just the interest on say $500,000 is $40,000 a year at 8%!!
Dick, every month our assets sit in the bank, or in stocks or
bonds they cost us some money, because inflation is greater than the
interest we are getting, and particularly the appreciation in the
posessions we hold dearest- LAND- and space, and enough room and
freedom to shape our own mini-culture in this ever strangling world.
Just this last year, that land around Petrolia has appreciated by at
It seems to me that if you are concerned about the future of
the valley, you should do something about it. It's easy to trust
McKee and Orem, but lets face it, Howard is no youngster, and McKee
is a professional developer. On the other hand, you are a doctor.
You are also one of the few people in the valley who can make a good
living right where you are. You also are in the position where you
can really do some good things for the community, as you have the
admiration and respect of both the new settlers, and the old
You also have one thing both McKee and Orem dont apparantly
have at the moment... financial resources. You, thru Mom and I have
the ability to buy that piece outright, but it would be folly to do
so. McKee doesn't intend to either, and neither does Clark want all
the money right now. Look at things this way- you could buy that
land now, and just hold on to it- for a year or two. As agricultural
preserve- or ranchland. The taxes are low, and the land will
appreciate at a rate greater than the interest you will be paying
Clark. You will have a tax deduction because of the interest, and
the small taxes. This is a very significant thing to consider. You
will also have a $350k asset, appreciating everyday, while having
invested $35-$100k maximum. After a while, you may or may not want
to give up some of the land. A few parcels sold to the right people
at the right time, could return the whole investment. UNLIKE McKee,
you would not have to scurry about and sell off the land right away
if you didnt want to.
There is also this to consider. You would probably want to
sell some of the land before too long, for as you pay off the loans,
the interest would decrease, and the tax advantages would go away
too. Also, conisder what happens if the Beatty ranch comes up for
sale- it would be nice to be fluid enough to protect your interests
if necessary with a purchase there too. Remember, $300k buys about
$1million worth of land these days. And the most favored persons in
this country are the large landowners, because they have all the tax
advantages, and all the centuries old traditions and laws on their
side... so long as they follow the rules of the range.
It sounds like I'm suggesting you buy the whole valley.
Well, that may be a little bit difficult to do. But if you dont, it
just may get turned into a Sea Ranch !! Probably not, because the
stark example is so close [Liz and I drove over there when we
returned home after our last visit], but it wouldn't surprise me if
your beautiful valley got axed up pretty bad. Just think what the
little subdividing McKee has done did to the landscape. Dirt roads
everywhere, and everytime someone furthur subdivides, another road
gets made, and more trees topple, and more springs get tapped, and
fire danger increases, and sleepy Petrolia gets turned into a suburb
of Eureka when the state decides that the population demands a new
road be built (route 1 extension to Eureka).
I say to you- act firmly in this matter. You can make
yourself heard. McKee will listen, Orem too and also Clark, because
you can back up your feelings and decisions better than anyone else
in the valley- execpt maybe the Mercedes dealer from Chicago.
You worry about the time and effort involved in dividing your
land up. If that's, a problem, there is no rush. This world is full
of eager doers. You can afford to take your time, and you can afford
to get some help... from me, or from professionals as you are not in
the super rush or financial bind guys like McKee are in.
I have expressed an interest in buying land in or around
Petrolia. Because its a beautiful place, and because it has a chance
to remain beautiful. I have gathered from talking with you that you
have mixed feelings about this, thus I have not pressed the point.
True, I am an engineer involved in high technology, but you know, I
feel I could run Vicarm from Petrolia if I wanted to, because my
knowledge is what is important, not my explicit presense. True,
things run more efficiently when I am around, but that isn't the most
important thing in life. I should add that there is also no reason
in the world why high technology shouldn't be found in out of the way
places- because communication is just as good in and out of places
like Petrolia as anywhere else.
You'll probably get this letter on Saturday. Call me if you
want to talk some more. I can come up when you want, even during the
week if necessary. I hope this note hasn't been too long winded , as
in Dad's tradition, but my writing to you has helped me sort out my
thoughts better than just idle pensees.
P.S. I bought a pump motor for you about two months ago, but haven't
gotten around to sending it up to you. I hope you haven't done