REAL ESTATE: The Desert Song

Roly-poly M. (for Marion) Penn Phillips, 70. claims he has sold more parcels of land (an estimated 100,000) than any other man alive. What is more remarkable is that most of the land was among the most forsaken and forbidding in the U.S.: the western desert, burned by searing sun and swept by fierce sand storms. Phillips and the 100 land development companies he heads have been prime movers in the great California desert boom. Once a death trap to pioneers, the desert’s rock and sand wastes, with their harsh beauty, dry, pollen-free air and brilliant sunsets, are a delight and a refuge to smog-smothered inhabitants of Los Angeles and other coastal cities. Developer Phillips operates on a simple principle: “You can’t buy a poor piece of California land; you can only pay too much for it.”

Last week he was once again proving this in his most ambitious project: Salton City, 150 miles southeast of Los Angeles. By the desert’s curious standards, Salton City is something of a bargain. Though the summer heat is high (up to 125° F.) and the land is low (234 ft. below sea level), there is water and there is a major highway (U.S. 99). By car and plane, buyers hustled to the sun-struck sands and low-lying, spiny, green clumps of greasewood along the shores of 30-mile-long Salton Sea. There they plunked down $1.2 million in one week, bringing to more than $30 million the total for lots purchased in the first Salton Sea resort development.

Three years ago, Phillips started buying his 19,600 acres along the west shores of Salton Sea for $2.4 million, divided it into 54,000 lots, most of them about one-third of an acre. Thus far, 11,000 lots have been developed with streets and water (from a 658-ft.-deep artesian well), and close to 7,000 have been sold despite their high ($2,000 to $4,000) price tags.

700 to 4,000. As a boy on his father’s ranch in the Oklahoma panhandle, Penn Phillips was taught about the value of land. Says he: “The nastiest thing my mother ever said about anybody was, ‘They’re just renters.’ ” He gave up a chance at college to go into business, became a real estate man during the Florida land boom, moved to California in 1921, where he built up a stake selling lots. His biggest successes came after World War II, when he recognized that the logical outlet for California’s pressing population was the desert.

Since then, Phillips has had a hand in developing many communities (see map), has lured more and more Californians into the desert, building them houses on the lots he sells. At his Hesperia development at the foot of the San Bernardino Mountains, the population grew from about 700 in 1954 to more than 4,000 now. Acre lots that sold for as low as $795 four years ago are now worth $6,000. His Edwards Estates at Edwards Air Force Base and Mountain View Estates at Victorville have grown from sandy wastes to thriving communities.

$40 to $2,000. Phillips keeps a sharp eye on the books of his 100 companies (1958 sales: $39 million), though he admits: “The building stage is the most exciting of all. I can’t stand the bookkeeping part. I tell them ‘I’ll make it and you count it.’ ”

To make it, Phillips so far has spent or committed $10.9 million on Salton City. Improvement costs are high, but so are profits. On a one-third-acre plot that costs Phillips about $40, he puts in another $400 for development and $600 for promotion. His selling price: $2,000 or more. After a land buyer has paid one-third the cost of his lot, the Phillips organization will provide 100% financing, at 7% interest, to build a house.

Although most banks consider desert building too speculative for loans to individual borrowers, they readily lend to Phillips because of his excellent record. Phillips’ companies each year build close to 1,000 homes, most in desert areas, in the $8,000-to-$11,000 price range, and there is no end in sight.

Penn Phillips is busy planning future desert developments, has already participated in the purchase of another 80,000 acres of land in the Mojave Desert for $9,000,000. Gazing at the great Mojave from the window of his private plane, Penn Phillips predicted: “That desert is going to be the cradle of a vast amount of our population.”