Mammoth is poised for growth of large-scale commercial and residential real estate development—if it can create “a new story” that will offset the old story of financial ruin.
And it can, according to some of Mammoth’s longtime real estate experts.
What Mammoth has in its favor right now, according to BrokerInTrust Real Estate owner Madeleine “Mickey” Brown, is real estate prices that, while rising slowly and steadily, are still low enough to be appealing to large developers. What it also has is a comparatively large amount of land available for development, unlike many of its other peer resorts, which are now fully built out.
What it needs is something to talk about; a new story generated by at least one new, large project.
“What we need now is a new story, a new talking point,” she said.
“There is a huge amount of interest in doing big projects right now, but we need something new to generate that kind of enthusiasm.”
That isn’t as far-fetched as it sounds, said Matthew Lehman, real estate broker and owner of Matthew Lehman Real Estate.
It’s already happening, both on the smaller scale and the much larger scale, he said.
For example, he said, several of Mammoth’s big malls have recently changed hands, purchased at much lower prices than they went for during the boom years.
That means the new owners will be able to drop lease rates, allowing more businesses a chance to set up shop, he said.
“Before, the owners had to charge $2 a square foot,” he said. “Now, prices have been ‘reset’ since 2005 and locals and others will have a chance to jump back into the game.
“I already see this happening. I see it raising the synergy of the town. For example, look at what is happening on Old Mammoth Road at the Mammoth Tavern. That’s a home run. Look at the new bowling alley, and what’s happening at the Plaza Mall—that was kept 100 percent full even during the recession. Look at The Village. They were down about 55 percent occupancy by 2007-2008, now it’s at about 85 to 90 percent.”
There are also other, large-scale real estate transactions about to go public, he said, and those will go a long ways toward generating that “buzz” that is so critical.
These include, but are not limited to, several new homes built by John Hooper, a likely change in ownership in some parcels near/in The Village, and likely this year, a long-awaited land trade at the base of Mammoth Mountain that will put more than a dozen acres of federal land into Mammoth Mountain Ski Area hands—which plans to intensively develop the parcel.
All is not rosy, however.
Although the recession is receding and property prices are slowly recovering (following a trend in Southern California, which is considered to be Mammoth’s bellwether when it comes to real estate prices), the snowless winter has slowed interest in at least the residential real estate market, Brown said.
“There was a lot of interest in the last quarter of 2013, but that has backed off somewhat,” she said. “The lack of snow makes people nervous.”
Interest was particularly high in high-end homes, but the lack of inventory has acted like a bottleneck, she said—while also noting that John Hooper’s several projects scattered throughout town will help with that bottleneck.
Another issue that potential large-scale developers will have to deal with is an as-yet-unapproved proposed amendment to the Town of Mammoth’s General Plan that will set the density of Main Street and other commercial areas of town.
Although the amendment is moving through the planning process, the environmental analysis required by the state under the California Environmental Policy Act (CEQA) is still ahead, with all the mandated—and sometimes lengthy—public comment periods and documentation that CEQA triggers.
But Brown, who is also a member of the Town’s planning and economic development commission, believes Mammoth is moving in the right direction to assure potential developers that the town is recovering from the recession, the $29.5 million legal judgment by Mammoth Lakes Land Acquisition against it, and, that the Town is becoming an increasingly “efficient” governing body.
“Mammoth had a black eye, but we are fighting our way back,” she said.
“People are impressed with our plans to expand the airport, they are impressed with the work we are doing on the general plan amendment to set density. But we do have to prove ourselves. We do have to carry this ball across the finish line.”
Lehman said the lack of certainty created by an incomplete general plan amendment dealing with commercial space density is indeed real.
However, so is the current comparatively low price of property in Mammoth—and the other amenities that Mammoth has that many other resort communities no longer have, such as available land for both large commercial projects and smaller, real estate developments and single family homes.
“There won’t be a 100 percent comfort level, but the other side of the coin, when [regarding] real estate, is that you buy when there is blood in the street,” Lehman said. “That’s where we have been.”