Tuesday, August 27, 2013

Living The Big Sky Life: Closing The One Percent

When I was busy living the big sky life, no one with buku-bucks purposefully came to Montana to propagate those bucks. They only came to hunt them. Like I’ve said before, the aphorism I heard repeatedly tossed around my closing room was, “If you want to make a $1Million in Montana, you’ve got to bring $10Million with you.”

And when it came to the arrival of those who could easily afford to lose $10Million in an attempt to make $1Million – a/k/a the one percent - there were usually two types of transplants: those who preferred to keep a low profile because they were looking for a hideaway (“lone wolf pack”,) and those who had a rich vision of controlling proportions (“leaders of the pack”.)

Bill Pennington of Circus-Circus fame was, from what I could see, a top dog member of the “lone wolf pack.” He knew what he wanted, and in direct contrast to the bargaining control tactics used by his neighbor, Burt Sugarman, it appeared that he preferred to go about getting it by paying a fair price for it. After buying Kiefer Sutherland’s secluded lakefront log mansion not long after my own arrival in Whitefish in 1992, he became intent upon quietly securing a privacy buffer around his new hideaway house by systematically buying up as much of the surrounding acreage as possible.

I handled one of his escrow closings for the purchase of a large neighboring parcel with a house for the uncomplicated cash price of $1Million. It was probably one of the easiest closings I’d ever done. Of course, Pennington’s people in Las Vegas handled everything except his signature. I even had the full purchase price wired into my trust account more than a week in advance of the closing date.

In preparation for the closing, Bill’s representative requested that I fax all of the closing documents to him for review. After several phone conversations, we were good to go and the funds were wired. The only problem was that no one knew when Bill would be signing the paperwork, let alone which state he’d be in when he did sign. So I sat on the funds and waited.

One afternoon in the middle of the week, right before his expected closing date, the waiting unexpectedly ended.

I happened to be manning the office alone that particular afternoon because Joan had left to do our banking and run other office errands. I wasn’t alone, however. I was with a couple of local sellers and their real estate agent, Vince Walton, in my closing room facilitating their modest $75,000 home sale when I noticed an older gentleman walk through the front door of my office and look around helplessly at the two empty desks.

I excused myself from the closing and went out to assist my surprise visitor who promptly introduced himself as Bill Pennington. He was there to sign his paperwork.

Standing before me was a 70-year old man with a full shock of white hair. He was short and somewhat stocky in stature and dressed to the nines in full cowboy regalia which included tailored and pressed jeans with a crisp center crease, cowboy plaid shirt with pearl snap buttons, and snake skin boots. The ensemble was impressively adorned with accessories made from little more than gleaming gold nuggets that shimmered in the reflective light. My eyes were blinded first by the designer belt buckle … and then by the bolo-bling chains around his neck … and then by the massive Rolex watch … and lastly by the chunky man rings that encircled his stubby well-manicured fingers.
I motioned toward the window of my closing room and told Mr. Pennington that I was with clients at the moment but would be happy to assist him when I became available. Since I expected to be finished with the closing in progress within the half hour, I told him he could either wait or return in thirty minutes when he could have my undivided attention, or he could make an appointment for another time.

He began to fidget and look around nervously as if he couldn’t decide what to do now that his schedule was going to be upended. He eventually came back with, “Is there any way I can do it now because I have to be at the shooting range in 45 minutes?” Wow, and impeccably dressed to impress he was, even if it was only for target practice.   

I thought for a second and offered him a seat at my desk as I pulled out his file. I put the documents before him, quickly highlighted where he needed to sign, and reminded him that I needed to return to my closing.

When I walked back into the closing room, I could see that Vince Walton had perked right up as he excitedly asked me, “Isn’t that Bill Pennington?” I merely looked at him and continued with his sellers where I’d left off. At this point, Vince had noticeably lost interest in his little $75,000 sale and seemed to want only to stare at Pennington sitting at my desk.   

My desk sat right outside of the closing room, and through the closing room window I could see Bill shuffle around those papers with the expression of a lost child, but sign nothing. After five minutes of that, Joan finally walked in and reacted with surprise when she saw him sitting at my desk. She exclaimed in her usual high-pitched happy voice, “Oh Hi! And who are you?” I overheard Bill explaining to Joan how I’d given him the paperwork to sign, but I had gone through everything so fast that he wasn’t sure if it was right, that maybe I’d missed something. Internally I was howling as I watched Joan stand next to him and kindly guide him through his signing as she would a novice first-time homebuyer, not a seasoned investor who’d just paid $1Million in cash for a little privacy buffer. It was one of the funniest oxymoronic scenes I can remember ever having during my days in that office.

I learned after leaving the Flathead Valley that the Big Mountain Ski Resort had a persuasive infusion of capital around 2007, and with the cash came an official name change to Whitefish Mountain Resort. The community and Big Mountain owner/operator, Winter Sports, Inc., had “leader of the pack” and one-percenter, Bill Foley of Fidelity National Financial fame, and his very rich vision to thank for that. Apparently even the local MOWBs could be convinced for the right price that change was inevitable.

Around the same time, Foley additionally acquired a 30,000 acre trophy ranch near Deer Lodge called the Rock Creek Cattle Company. Because he did a Burt Sugarman and secured the surrounding 50,000 acres for cattle grazing via lease from the state of Montana - thereby increasing his controlling proportion to 80,000 acres in total, he’s been able to market the exclusive development as a working ranch to other city slickers of his financial caliber. I wouldn’t go so far as to call that sharing the wealth, but more like like attracts like.

So how have these infusions by the one percent changed the quality of life for the regional residents in a state that has no sales tax? Apparently it’s gone a long way toward pricing many of the locals out of home ownership, especially when the property taxes for homes around Whitefish Lake alone have increased about 2000% in the last twenty years. And everyone knows that no cost of living increase of that magnitude has managed to trickle its way down into the average worker's paycheck.

Living The Big Sky LifeTM
© by DK King

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