Who wouldn’t want an affordable sea-side home in glamorous California? Those who rushed to buy a lot in Salton City during the late 1950’s certainly thought it was a solid investment. Sadly, they were wrong.
(My Christmas Valley story said that Penn Phillips moved his operation to Oregon after his California business license was suspended for unethical sales practices. The Salton City development gave rise to that suspension.)
Salton City is a desert community lying 150 miles southeast of Los Angeles. It’s named after the adjacent Salton Sea, which was created in 1905 when the Colorado River was inadvertently diverted into a dry lake bed. Tourists, sport fishermen and bird-watchers were drawn to this unusual place. In 1957, Penn Phillips bought 20,000 acres of waterfront property and committed $11 million to turn it into a resort oasis. He built a yacht club, a resort hotel, and the town’s infrastructure.
Mr. Phillips was masterful in describing his “American Riviera” vision for Salton City and he understood the art of convincing people to buy now. His slogan was “You can’t buy a poor piece of California land.” Within a year, he had sold 7,000 lots. Some investors even selected their parcels using an airplane tour, without ever seeing the properties at ground level. Frank Sinatra and his Rat Pack pals soon made Salton City their new playground.
But the water that inspired the Salton City dream would also lead to its demise. Agricultural run-off from nearby farms caused frequent flooding and the sea’s salinity was higher than the ocean. Fish die-offs were common and the birds that fed on them also perished. By 1961, Phillips had sold his Salton City holdings to another developer and moved to Christmas Valley. That same year, the California Department of Fish and Game predicted the Salton Sea would die around 1980-1990 because of the ever-increasing salinity and pollution.
Salton City haunted Mr. Phillips for years afterward, in the form of a class action lawsuit by the 2,000+ owners who bought lots there. The suit claimed he knowingly misrepresented key facts about the area and its future potential. Many suspected that he knew the prognosis for Salton Sea, well ahead of the California government’s doomsday announcement.
To be fair, some of his earlier developments in California were successful, like the city of Hesperia at the foot of the San Bernardino Mountains. It grew from a small community to almost 100,000 residents by 2010. In contrast, Salton City’s 2010 population was 949 or 44 people per square mile.
Today, a 10,000 square foot lot in Salton City sells for about $3,000 – the same price Penn Phillips charged fifty years ago. The other thing that hasn’t changed is the succession of dreamers and developers who followed in his footsteps, each claiming that the glory days for Salton City are just around the corner.
This article benefited from these resources: Salton City: A Land of Dreams and Dead Fish by David Streitfeld, LA Times; Real Estate: The Desert Song, Time Magazine, Mar. 02, 1959; Photo credit: FreeFoto.com. Film buffs will appreciate “Plagues and Pleasures on the Salton Sea,” a 2004 documentary (narrated by cult film icon John Waters) about the Salton Sea’s odyssey and and those who have chosen to live beside her.
If you like real estate stories as much as I do, read the LA Times article on California City. It’s the 11th largest U.S. city by land size and was developed by Nat Mendelsohn, a contemporary of Penn Phillips.