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Malibu’s Turning Point

How a sleepy beachside town has morphed into the global epicenter of fun in the sun for the rich and famous.

Only a generation ago, Malibu was an also-ran to the affluent Southern California coastal communities of Pacific Palisades and Santa Monica. The bucolic hamlet didn’t have nearly the resources to compete with its neighbors’ thriving schools, perfectly manicured parks and growing retail districts. Back then, Malibu—so far out of the way it was actually affordable—was an alternative for middle-class families who had been priced out of L.A.’s Westside.

My, how times have changed.

These days, open Sunday’s Real Estate section and you will find more than a handful of properties in Malibu priced well over $20 million (and scarcely a home under $2 million). The area’s boom is not lost on luxury retailers, world-class restaurateurs and enterprising developers, who’ve all zeroed in on Malibu’s access to its influential residents and their buying power. And as Malibu’s surge in attention and affluence gives its Westside neighbors and its famous East Coast counterpart, the Hamptons, a run for their money, many of its longtime residents worry this former ranch town will lose its unassuming charm.

But Malibu has always been a place full of contradictions. To most, the name conjures images of pristine beaches, luxurious oceanfront estates in a fantasy playground for starlets and moguls. But Malibu’s 27 miles of coastline comprise but one part of its identity. Just inland from those postcard-perfect stretches of sand lies another world, where the hills and canyons of this city are filled with enclaves of traditionally planned neighborhoods with tract homes and cul-de-sacs, working ranches and horse farms.

Today, no place is more illustrative of Malibu’s paradoxical nature than local favorite John’s Garden, a hole-in-the-wall snack shack and one of the original tenants of the increasingly posh Malibu Country Mart. On any given day, you’ll find kids in Crocs and die-hard surfers lining up alongside stylish moms cradling their Birkin bags and Hollywood moguls pecking at BlackBerries. And after ordering from the chalkboard menu, everyone gets the same farewell (“Now you be good out there!”) delivered with avuncular charm by Steve Ridgway, who’s been manning the counter since the shop opened 32 years ago.

Real estate in Malibu has become an exercise in extremes as well. On Carbon Beach, high-tech estates worth tens of millions designed by architectural luminaries such as Richard Meier, Michael Graves and Charles Gwathmey nestle up against the remaining beach cottages. These modest holdouts may lack copper plumbing, yet billionaire buyers—especially neighbors in mansions looking to expand sideways—will get in line to pay a staggering fortune for the land alone.

The big changes created by the area’s mounting affluence and star wattage have also spilled over onto Malibu’s world-famous beaches. After fighting for two decades about beach access in front of his palatial estate on Carbon, entertainment mogul David Geffen agreed in 2005 to open a small public pathway to the ocean. City officials and daytrippers rejoiced; finally, people could have a front-row seat to the good life and enjoy one of the best dry beaches in town. But the access has come at a cost to celebrity residents and non-industry neighbors alike.

For the first time in its history, the prying paparazzi have become a regular fixture on this historically quiet stretch, as well as other formerly off-the-grid beaches around Malibu. Relishing the more pleasant work conditions than nights spent standing outside of Hollywood clubs, the scrappy photographers arrive by the dozen with their dogs, beach chairs, coolers and long-lens cameras in tow.

This change has prompted at least one celebrity to put her house on the market. Fitness guru and Malibu resident Drew Gerstein recalls one day a workout with Courteney Cox got particularly out of hand. “We went down the beach to play tennis and were simultaneously being followed and photographed by paparazzi on the beach, on the street and overhead in a helicopter.” Cox and husband David Arquette recently sold their John Lautner house on Carbon to Los Angeles Dodgers owner Frank McCourt for an estimated $33.5 million. (But that doesn’t mean the former “Friends” star is abandoning the area. Word on P.C.H. has it she has already purchased another home in Malibu, albeit in a more secluded location.)

Perhaps the residents of Carbon Beach are willing to put up with the changes because for most, it’s a second (or third, or fourth) home. But there’s also a growing number of residents who have chosen Malibu as a primary residence, and with those come an entirely different set of desires, needs and expectations.

While many still move here for a Pacific Ocean backyard, newcomers are also selecting Malibu distinctly for its rural charm. They want the same bells and whistles as the Carbon folk but are happy to trade sand for land—and lots of it. The plans for these huge lots often go far beyond a big lawn or tennis court: greenhouses, expansive formal gardens, and barns big enough to house 40 horses are just a few of the amenities installed by recent arrivals. To accommodate these kinds of flourishes, people have turned to Point Dume, Paradise Cove and Winding Way, which can offer more acreage than the pricier beachfront enclaves.

“I think it would shock you how many people in Point Dume are really into having their own chickens,” says real estate broker Chris Cortazzo, whose family has lived in Point Dume since 1966 and gets a huge kick out of gifting his “happy, free-range” eggs. “It’s not the same as when we rode three kids to a horse bareback to the local market, but the chickens, the wild peacocks and the horses preserve a little of that old country feeling.”

Even in recent months with headlines across the country dominated by a downturn in real estate prices, Malibu’s market has remained steady. “Malibu has been impervious to the panic,” says Cortazzo. “Most of the buyers out here are all-cash and are not affected by loan trends. Especially on the beach side, a good property still sells instantly. Nothing has changed.”

In the land of million-dollar mobile homes, it’s surprising that Malibu’s commercial realm hasn’t kept pace.

But that’s all about to change. Major developers are flocking to Malibu with their sights set on rebuilding its commercial identity. And that has exposed a divide among the residents who seem to have different ideas of what is the best for the community.

Ask anyone about development in Malibu, and the first person you’ll hear about is Oracle founder Larry Ellison. In addition to his string of beachfront residences, Ellison’s acquisition of 250 feet of frontage on Carbon Beach to house two restaurants caused a stir in 2003 and has been one of the most talked-about developments ever since.

Rumor has it, two of the restaurant world’s biggest names, Puck and Nobu, are moving into the spaces. Although Ellison’s architect Scott Mitchell refuses to confirm those rumors—or even the fact he’s working for the mogul, discreetly referring to him only as “the client”—hypothetically, he does agree that any tenant moving into this prized location will have as much to do with quality as with economics. “Why shouldn’t Malibu have world-class restaurants?” he asks. “It’s one of the most beautiful places in the world.”

As for the economics behind bringing luxury to the beach, Mitchell explains, “Given its density allowance, Carbon Beach is the most expensive real estate in the country. 59th Street and Fifth Avenue in Manhattan is not as expensive as Carbon Beach by square foot based on what you can develop there. When you have that kind of real estate value, it’s difficult to make your business plan add up at the end of the year when you’re selling burgers.”

David Geffen, another well-known resident, is hoping to offer the Malibu experience to out-of-towners with his renovation of the Malibu Beach Inn on Carbon Beach. Touted as the “only luxury oceanfront hotel destination between Santa Monica and Santa Barbara,” the new hotel will feature 47 meticulously outfitted rooms and suites, all with the same ocean view homeowners pay millions to enjoy.

Malibu resident and developer Richard Weintraub’s planned Rancho Malibu resort, adjacent to Pepperdine University, is what could really put the area on the map as a vacation destination. Weintraub has compared his vision for Rancho Malibu to the Hotel Bel-Air. Plans for 146 rooms on 28 acres are rumored to include restaurants, bars, a spa and even a private club for locals, making it the first ever full-fledged resort in the city’s history.

But no topic has sparked as much debate over the influx of luxe as Malibu’s surge in high-end store openings. An audience with incredible buying power and a waning interest in driving to Beverly Hills just to buy fancy cargo pants has caught the attention of designer retailers. Their arrival, however, puts the squeeze on some of Malibu’s mom-and-pop businesses.

“We live in a country that grants landowners certain rights that are protected under the constitution,” says Malibu City Councilwoman Sharon Barovsky, who, along with her colleagues, has advocated “absolutely slow growth.” “As much as I might want to tell Mr. Koss to keep his rents low and keep the local businesses here, I would be breaking the law,” she adds. “You can’t have rent control on commercial spaces. Whether you like it or not, we live in a Capitalist country.”

Barovsky is referring to Michael Koss, owner and developer of the Malibu Country Mart, by far Malibu’s most popular retail center. Koss has been criticized by some for raising rents and bringing in tenants such as Ralph Lauren (which now occupies three separate stores in the center), Ron Herman and James Perse. In his defense, Koss says, “The majority of the tenants here are not chain stores, and the Malibu Country Mart is not the only retail space in Malibu.” Koss says he has made a conscious choice to work with local and independent businesses on several occasions.

“We can’t say to people, ‘We don’t want you to sell that; we don’t want you to develop that,’” says Barovsky. “Legally and morally, we just can’t. What we should say is, ‘What can you build that will fit in with our community?” That was the approach the city council took when they solicited bids from developers for the vacant Malibu Lumber Yard site adjacent to Cross Creek’s Malibu Country Mart. The winning plan from Richard Weintraub and partner Richard Sperber will bring a flurry of posh new stores to Malibu, including Tory Burch, Intermix and trendy frozen yogurt sensation Pinkberry.

After renovating Brentwood’s popular Country Mart with a similar philosophy in mind, developers Jim Rosenfield and Dan Bercu have sights set on Malibu, too—specifically the Trancas area (Malibu’s northernmost commercial locale). “The Trancas Country Mart is about preserving the Malibu lifestyle and celebrating some of the most beautiful land in the state of California,” says Rosenfield.

This tranquil backwater getaway known for its beaches will soon be known for its world-class hotels, shops and restaurants. Malibu is about to have its moment in the sun.

By Jackie Marcus.
Photographed by Christian Horan.

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