LONG BEACH — A bankruptcy judge has accepted a $3.75-million offer from a Boston investment group to buy the historic Pacific Coast Club.
A lawyer for the investors said they intend to restore the vacant and deteriorating 59-year-old club at 850 E. Ocean Blvd., which was once an elegant gathering place for the city's elite.
Although restoration plans are still only preliminary "sketches," the buyers may convert the six-story tower of the castle-like structure into condominiums while using its main floors as a restaurant, shops and offices, or a private club, said Boston attorney Richard Lane, a spokesman for the group.
"We're trying not even to consider demolition," said Lane. "We hope to keep as much of the historical and architectural aspect as we can."
The club is a designated city landmark and has been placed on the Department of Interior's National Registry of Historic Places.
Judge James Dooley accepted the offer of the Boston investors late Thursday after a hearing in Los Angeles, just hours before the property would have been removed from bankruptcy protection and auctioned by creditors.
His ruling came after creditors argued vigorously that two years of bankruptcy protection was enough. The building and its 1.55-acre beachfront site should be turned over to them for sale, creditors said. They had planned an auction for 10 a.m. Friday.
Under the new agreement, four Boston-area investors, headed by real estate developer Edward Le Clair, agreed to place a $100,000 non-refundable deposit into escrow, which would close after 60 days, said Lane. The purchase agreement allows escrow to be extended another 30 days upon receipt of an additional $50,000 deposit.
A $100,000 cashier's check must be in the hands of the bankruptcy trustee by Monday, said Lane. He said the money would be delivered.
"This commitment is as strong a commitment as we can make," he said.
The club last entered escrow in October, 1984, when a Louisiana investor offered $7.3 million, then forfeited $100,000 when he could not close the deal.
Le Clair has restored historically significant residences and commercial buildings in Boston, Lane said. "He has restored a couple of million in residential property," he said.
The attorney estimated it would cost perhaps $15 million, including the purchase price, to rehabilitate the building. Financing for the project has not yet been secured, he said.
The $3.75-million purchase price will cover all outstanding debts against the club, now owned by Beverly Hills businessman Josef Janota, said bankruptcy trustee Richard Pachulski.
Debts of $3.5 Million
Debts total about $3.5 million, including $2.5 million to Bellevue Corp. of Burlingame and $500,000 to Great Western Savings and Loan, said Pachulski, a Century City attorney.
Long Beach real estate broker Richard Gaylord, whose firm handled the club listing, said Le Clair is "teamed up with some very good local people, and he's putting together a development team that's going to be dynamite." Le Clair is represented locally by prominent Long Beach attorney Tim Cameron.
"He seems to know what he's doing," said Gaylord, who is also a city planning commissioner.
Lane said the Boston group had not yet narrowed its options for the club, but he added, "Our first option is to develop the building into condos, not commercial." The 140,546-square-foot building does not meet earthquake standards and will have to be structurally reinforced, he said.
A private men's club for decades, the Pacific Coast Club has been vacant for 15 years. It was condemned two years ago, but demolition was stopped by a bankruptcy judge in April, 1984.
The court appointed a trustee to oversee the property after city officials said they doubted the financially strapped Janota could finish demolition. The city had condemned the building after slate tiles began falling off the roof onto neighboring property.
The death of a young boy at the club in April created more pressure to raze or rebuild it. The boy found his way over a security fence and into the locked castle before falling to his death in an elevator shaft.