Developer’s dreamed-of paradise never appeared

By Finn J.D. John
August 5, 2018

ONE DAY IN 1960, Lake County ranch and real-estate trader Phil Pittman ran into a friend, Evelyn Pettus, in Christmas Valley.

“Evelyn, you have to get your real-estate license,” Pittman told her excitedly. “I just sold a whole damn desert!”

It was a moment that would change the town of Christmas Valley forever — change it even more than Pittman had when he’d joined forces with legendary Fort Rock resident Reub Long to successfully lobby for the area to get electric service back in 1955. Because Pittman had sold that “whole damn desert” — 72,000 acres of sand dunes, sagebrush and jackrabbits, a giant slice of the old ZX and Century ranches, at a price of $10 an acre — to a real-estate developer, a big, bluff Daddy Warbucks type named M. Penn Phillips.

And Phillips had some very big plans for Christmas Valley.

MARION PENN PHILLIPS was originally from Parsons, Kansas, where he was born in 1887; so he was in his early 70s when he first came to Christmas Valley. A salesman born, he had gone into real estate and by the time he was in his 30s, he was a serious player in California real estate development. By the mid-1920s he was something of a golden boy, and his projects were getting bigger and more successful as he went along — in Bakersfield, Vista, and Las Vegas, he platted and developed whole neighborhoods. In the early 1930s he defied the Great Depression with an 18,000-acre project in the Coos Bay area, apparently his first venture in Oregon.

During the war, he took a break from his commercial activities to serve as executive vice-chairman of the U.S. Treasury Department War Finance Committee for Southern California, and no doubt broke some records selling war bonds. Phillips was more than just a super salesman; he was also a super sales coach, able to bring out the best in a whole team of hustlers.

After the war, he knocked off at least half a dozen more developments around fast-growing California. Then, in 1955, he went all in for his first really big community-building project, the first of three: the Mojave Desert town of Hesperia, Calif. Through his company, he bought 23,000 acres for about $55 an acre, including basically the whole township and almost-ghost town of Hesperia. Then he set about making a town grow there, for real.

Three years later, he had done so, more or less. He’d built a bunch of flashy amenities — water system, paved roads, an artificial lake, a showplace restaurant-hotel, all built to look good but not necessarily to last — to demonstrate to buyers that he wasn’t just selling promises. Then he mobilized his sales force to hustle properties — vacant lots as well as packages in which his company would build a home. The lots went fast. Then, once all the easy money was in the bank, Phillips was moving on.

He moved on to the Salton Sea, a colossal inland sea that had been accidentally created (or, rather, re-created) by a diversion of water from the Colorado River in 1905 into an old dry lakebed. The river had filled it up, and it was now being maintained by runoff from Imperial Valley irrigation canals.

This place, Phillips thought, had the potential to be a real moneymaker — an affordable seaside resort, a California Riviera. So, starting in 1958, he repeated the hustle that had made him so much money in Hesperia. It worked even better this time; he paid under $2 an acre for Salton Sea property, and sold the lots for $3,000 apiece. On May 21, 1958 — the opening day for sales — he raked in $4.25 million in 12 hours.

But suddenly some of the sins of his past were catching up with him. In May 1960, the California Real Estate Commission suspended his license and charged him with fraud. The problem was, his system — build flashy amenities, sell quick, get out and let others do the heavy lifting of building a community — left armies of new property owners who felt misled. Those hard feelings, combined with the fast-and-loose style of some of his salespeople, had made him some very powerful enemies.

Phillips was now out of business in California for several months, and the commissioner made no secret of his goal to make that situation permanent. So he turned his eyes once again northward ... and they fell on Christmas Valley.

ONCE HE OWNED Christmas Valley, Phillips got busy right away running the now-familiar play. He platted a town, a great sprawling metropolis, because he knew his big moneymaker was going to be lot sales; the land he’d picked up for $10 an acre was going to be sold for $150 an acre on easy monthly payment terms. Having successfully converted quite a lot of desert lands in the Imperial Valley into workable farms, he figured this could be done in Christmas Valley as well; so he marketed larger tracts of land, 20 acres and up, to would-be small farmers, and smaller 5- and 10-acre plots to older people looking for a quiet, pastoral paradise to retire to.

[EDITOR'S NOTE: In "reader view" some phone browsers truncate the story here, algorithmically "assuming" that the second column is advertising. (Most browsers do not recognize this page as mobile-device-friendly; it is designed to be browsed on any device without reflowing, by taking advantage of the "double-tap-to-zoom" function.) If the story ends here on your device, you may have to exit "reader view" (sometimes labeled "Make This Page Mobile Friendly Mode") to continue reading. We apologize for the inconvenience.]

—(Jump to top of next column)—

First, of course, he built some infrastructure: a water system, an airport, a golf course, and a first-class restaurant on the shores of a large artificial lake (the Christmas Valley Lodge). He knew that once all this was in place and looking great, potential buyers would see it as evidence that he was serious about developing Christmas Valley — that he wasn’t just a hustler selling chunks of useless land.

Once all this was in place, he started the hustle.

He ran advertisements that were wildly overoptimistic about the development potential of the Oregon high desert in national magazines, featuring “artist’s conception” drawings of gorgeous pastoral landscapes with stately willow trees, tidy board fences, and herds of cattle and horses. People bought parcels of Christmas Valley land, sight unseen, based on these.

For bigger fish, his salesmen would fly them out to Christmas Valley in a DC-3 airliner, squiring them around to a few carefully manicured showplaces near the artificial lake and feeding them a gourmet dinner at the lodge before flying them home again, providing a carefully curated experience designed to give as glowing an impression as possible of what Christmas Valley might one day be.

As it always had, it worked like magic. Within three months Phillips had sold almost all the lots.

But this time there was a problem. He had marketed them to investors, not homeowners, and the appeal had been a sort of impulse purchase: “For $10 a month, you can own five acres in this beautiful community, that you can retire to someday when you no longer have to live in Akron or Allentown or wherever your job is.”

So thousands bought in — but dozens came to live. And of those dozens, all but a handful turned around and drove away. Some of the ones who drove away went straight to their attorneys’ offices, and soon Phillips was dealing with legal issues as well as logistical ones.

A community can’t grow without people in it. Phillips had predicted a population of over 5,000; by 1967, there were still just 150 or 200 there. But Phillips had made almost all the money he could make on the project. It’s highly unlikely that Phillips ever set foot in Christmas Valley again after 1963, although his jovial Daddy Warbucks face and prosperous cigar appeared at the top of his front-page column, “Penn Points,” in every issue of the weekly newspaper his company published, the Christmas Valley Gazette.

Finally, in 1970, Phillips officially gave up, disbanded his company, and threw himself wholeheartedly into the comfortable and easy life of a retired millionaire. He died in 1979 at the age of 91, in Sierra Madre, Calif.

So Christmas Valley — although it still benefits from the amenities Phillips put into it — faded back to something like what it had once been. Today it is a biggish sort of high-desert town boasting 1,500 or so residents, most of whom live on lots and parcels platted by Phillips in ’61.

TODAY, THE PRESENCE of Penn Phillips is just a memory, warmed and softened with nostalgia as the years go by. Longtime residents of Christmas Valley still have some great stories of the crazy go-go days of 1962 and 1963, along with the lake, lodge, golf course, and airport — amenities they probably would never have gotten without Penn Phillips.

They also have a surprisingly active real-estate market. On the popular real-estate website Zillow, as of August 2018, a little under half of all properties for sale in all of Lake County are in Christmas Valley. There are 103 listings for property for sale there — roughly one property for sale for every 12 men, women, and children living in and around Christmas Valley. Mostly the properties are unimproved five-acre lots that sell for $3,000 to $5,000 apiece ... which, after inflation, is roughly 45 to 65 percent of what Phillips sold them for back in 1963.

(Sources: Tupper, Melany. High Desert Roses, Vol. 1: Significant Stories from Central Oregon. Silver Lake, Ore.: Central Oregon Books, 2003; Gutglueck, Mark. “Penn Phillips: Developer, Government Official, Charlatan,” San Bernardino Sentinel, 25 Jul 2015; Steinkopf-Frank, Hannah. “The 1960s Real Estate Mirage of Christmas Valley,” Atlas Obscura, atlasobscura.com, 18 Aug 2017; Law, Rebecca. “The Story of Christmas Valley” (15 Dec 2010) and “The Saga of Salton City” (08 Jan 2011), Rebecca Law & Associates, rebeccalaw.net)

SUMMARY: Talking fast and dreaming big, M. Penn Phillips blew into the little high-desert town of Christmas Valley like a tornado. His dreams never came true, but he left an indelible impression on northern Lake County.

TAGS: #FortRock #SilverLake #Hesperia #SaltonSea #Rascals #Hustlers #Showmen #Promoters #HighDesert #RealEstate #ChristmasValleyLake #BaertLake