The Light’s on, but No One’s Home : Luxury Condos Stand Empty While Owner Waits for Market Upturn

At night, only a single light shines in the stylish condominium complex across the street from the Long Beach Marina.

Its glass front doors are sealed with chain and padlocked.

No one answers the telephone number listed on the sign outside, the one for queries about the luxury apartments within.

Called The Pacific, this 187-unit building on Ocean Boulevard is one of the best addresses Long Beach has to offer. Yet no one lives there. No one ever has.

And it has been that way for the last four years, since it opened with great fanfare, only to close its doors a short time later before a single condo had been sold.

The reason: a real estate market that caved in just as the condos were completed.

That, of course, was a common theme in those days--condos and housing projects coming on line as real estate values went south. But instead of selling the plush units for what the market would bear, the owner--a large Japanese construction firm--did something considered highly unusual in the world of real estate: It was simply shut down.

“The owners decided not to sell,” said Paul Fay, who was the construction manager for the project. “It’s complete, but it’s being held off the market.”

That, say real estate experts, borders on the extraordinary simply because there is no money coming in on a project that cost millions of dollars.

“The old adage about the Japanese having the long view--there is still a lot of truth to that in a lot of quarters,” said housing market analyst Michael Meyer. “There are a lot of Japanese companies who have the net worth and the financial backing of banks to have the long view. The property may have gone down in value by 35% from what they expected. So they may decide to wait for seven years rather than taking their lumps now.”

The owner of the property is Hazama USA Corp., a subsidiary of a giant Japanese construction company. Hazama USA, based in Gardena, has shown virtually no interest in discussing the building, much less showing it off.

The watchman who comes to the front door simply shrugs his shoulders and says he doesn’t know anything about the building. The view from there is of a tastefully designed lobby with thick carpet and large, comfortable-looking easy chairs. The grounds around the building, one of the largest and grandest on Ocean Boulevard, are carefully manicured.

At night, a single model apartment on the seventh floor is lit. That condo boasts stylish white-framed patio furniture, plus full furnishings inside. A chandelier hangs over the fashionable dining room set.

It’s lights out everyplace else.

When The Pacific was going up, no one envisioned its darkened appearance of today. One of the marketers of the project, Scott Walker, said that as the building was being planned in the late 1980s, the real estate market in Southern California was going straight up. But the downward spiral began just before the condos were put up for sale in 1992, at asking prices of $170,000 to $500,000.

“Unfortunately, timing is as important as location,” said Walker, a partner in Coastco Inc., which specializes in new home sales and marketing. “It had missed that window where our market peaked.”

So there it sits, a project conservatively estimated at a worth of $50 million.

“It was built on time and on budget,” Fay said. “The units are fantastic.”

Dave Evans, operations officer of the Long Beach Bureau of Building and Safety, said the builders also cut no corners, including the payment of $568,000 in impact fees--money to cover the cost of more people using neighborhood roads and facilities--even though no one was moving in.

Walker said that before the decision was made to close the building, more than 100 people a week were viewing The Pacific models and that many of the units were in the first stages of being sold.

“When we opened, there was tremendous amount of interest that had been built up,” he said. “Obviously, it commands a lot of attention.”

Walker said the attention it gets now is mostly people driving by and wondering what ever happened to the building, though there are still people interested in living at The Pacific.

“I get calls two or three times a month from people who want to buy,” Walker said.

What will happen to the building remains unclear. Hazama USA, despite repeated calls, is not talking. But Walker and others said there is no lack of interest in the condo complex.

“There are potential buyers for the building,” he said. “The highest and best use of the building is to put it up for sale.”

So how much is the complex really worth?

“There are a number of people who ask me that question,” Walker said.