The famous modernist Halliburton “Hangover” House overlooking Aliso Beach has been purchased for $2.4 million out of foreclosure by a mystery buyer, according to real estate records.
For residents living beneath the historic landmark on the shoulders of Aliso Peak, who already suffered through a recent controversial development involving major excavation, the sale triggers mixed feelings.
Their concerns stem from the fact that Hangover house juts from seven relatively inaccessible lots, subdivided in 1987 presumably for future development, and that the long unoccupied home featured in 1938’s Architectural Record for daring design has deteriorated from neglect.
In September, though, the city’s development director John Montgomery issued a determination that recently sold lots from the Halliburton parcel would be subject to a costly environmental review for their impact on a historical asset, said land-use consultant Steve Kawaratani. His client, Laguna Beach developer Steve Johnson, tabled a proposal to develop on some of the Halliburton lots in the wake of formal complaints filed in August by neighbors Joel and Carol Lubritz and the South Laguna Civic Association.
“We’re glad to see the city taking a better stance when it comes to historical property,” said Greg O’Loughlin, who lives in the Coast Royale neighborhood. He led a team that has since dropped its pursuit of including the property on the National Register of Historic Places.
To be sure, a new owner will require considerable effort to overshadow the colorful characters involved with the property known as the “Hangover House” for its ridgeline perch overlooking Aliso Beach and Aliso Canyon.
The house was built in the International style for Richard Halliburton, a world-famous adventurer and best-selling author of the 1920s and ’30s, according to “Cottages and Castles of Laguna” by Karen Wilson Turnbull. He commissioned
architect William Alexander Levy, who finished the home in 1939 at a cost of $36,000. A flat-roofed box of reinforced concrete and steel-framed industrial glass, it was built of 100 tons of concrete and 100 tons of steel. The Hangover House was said to have been the inspiration for author Ayn Rand’s Heller House of modernism and individualism in her novel “Fountainhead.” The three bedroom, 2.5 bath home of 2,200 square feet perches from a hilltop lot with unobstructed
Pacific Coast and Catalina Island views.
Its original owner, though, enjoyed the view but a few months. He left Hong Kong aboard a ship on March 4, 1939, which disappeared 20 days later, possibly sunk by a typhoon.
The property at 31172 Ceanothus Drive more recently was owned by local native Zolite A. Scott, inherited from her namesake mother. After a decade long battle with breast cancer, Scott died in November 2010. At the time, the Halliburton House and a dozen other undeveloped lots she owned in Dana Point and Laguna Beach were all in bankruptcy, said Carlton A. Post, a local resident, who with his wife Cheryl, and Fred James’ Bankers West Mortgage, had lent Scott money. They eventually foreclosed on their note, obtaining a deed of trust that covered 13 properties, much of Scott’s real estate empire, said Post, who could not identify the Halliburton house buyer. James declined to identify the new owner.
As is often true of real estate investors who get in financial trouble, Scott’s properties were overpriced, said Prudential Real Estate agent Susan Neely. Indeed, the Halliburton House went on the market in February 2010 at $4.9 million, according to Multiple Listing Service records.
Records show a default on the Halliburton House in 2008 and arrears of $151,366. “It’s been a long four years,” said Post, a retired resort developer. He said his fellow investors have since sold some of Scott’s holdings, including the lots purchased by Johnson.
Ceanothus resident Tom Slattery and other neighbors opposed Johnson’s plans because “the development goes right through the ridgeline and a historic structure.”
Johnson’s role in another notorious development on Ceanothus did not endear him to neighbors. Earlier this year, some hired local attorney David Kennelly. In an Aug. 5 letter to the city’s Design Review Board, he noted the city’s $46,000 legal settlement paid to two Ceanothus residents forced out of their homes during Johnson’s previous project and challenged a “categorical exemption” granted on June 3 by a planner that allowed the project to proceed.
Kennelly said the exemption fails to take into account high value habitat nearby, impact on neighbors from an estimated 1,041 trips needed to excavate 4,840 cubic yards of earth and a historic resource, the Halliburton house.
“That changes the game,” said Kawaratani, who was informed by Montgomery personally the project would require an environmental impact report. He tabled Johnson’s now dormant proposal. “I was surprised by the city’s determination, but I don’t disagree with it,” Kawaratani said.
The newest Halliburton house owner reportedly owns several other properties in town and is interested in its preservation, according to a person who does business with James but was unauthorized to speak about the property.