Did the Obamas buy a house in Rancho Mirage? Here's everything I know
Did the Obamas buy a house in Rancho Mirage? The question has dogged me since my fourth week at The Desert Sun, when former president Barack Obama visited the desert for a President's Day golfing trip in February 2015.
The pursuit has been a tricky one. Few people have firsthand information; those that may have firsthand knowledge are seldom willing to talk to me; and public property records, my usual reservoir of information, betray little. There are a lot of rumors, though — I’ve heard the same ones as you.
Although many tabloids have said a desert purchase is in the works or a “done deal,” we’ve never confirmed that these rumors are true. I don't know for sure whether the Obamas have, or will, buy a house here. But I do know some things for sure — so consider this a fact-check on the last three years of rumors.
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Speculation surrounding the Obamas’ desert visits has focused on two neighboring properties in Thunderbird Heights, a ritzy hillside community in Rancho Mirage.
The first is the Wambaugh House, named for its longtime owner Joseph Wambaugh, a novelist. The house went into escrow in summer 2014, and shortly thereafter, many media outlets reported that the Obamas were the buyers. The White House denied it, and when the sale was recorded with Riverside County, the deed showed the buyer to be an Omaha, Nebraska-based trust.
The signatories on the deed, and the trustees of the trust, are James and Karen Linder. James Linder is a medical doctor at the University of Nebraska and Karen Linder runs an investment firm.
"We bought the house for ourselves, and have no plans to sell. Spending a bit more time there is our only goal," James Linder said in an email to The Desert Sun this week. "Our only contact with the President has been to invite him to a house party. Alas, he was a no-show."
The Linders do not appear in OpenSecrets.org, a database that tracks political donations, as supporters of Obama or any other candidate.
Marc Lange, a real estate agent with HOM-Sotheby's, represented both the buyer and the seller in that sale. I asked him this week if the Linders in fact bought that house.
"Whoever's on record on title as being the owner is the owner," he replied.
The other house in question is the house at the top of Thunderbird Mesa, which belongs to James Costos and Michael Smith. The Howard Lapham-designed estate is where the Obamas are widely rumored to stay almost every time they visit, and Smith admitted as much on Twitter before their January visit.
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Smith is the interior designer who decorated Obama’s Oval Office, and Costos is a former HBO executive who served as Obama’s ambassador to Spain. An LLC listing Smith as its manager bought the property out of bankruptcy in 2011.
At the time, the property included two parcels of land. In 2014, Smith’s company signed an agreement to treat it as one parcel. Such documents are common when owners want to build on their property. According to the city of Rancho Mirage, new structures in Thunderbird Heights are only allowed on lots of at least an acre.
In May 2015, the deeds to vacant lots on either side of that 8-acre property were transferred to Smith’s LLC. On the same day, the county recorded a deed of trust — effectively a mortgage — for $2.925 million.
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Then, in December 2016, Smith’s LLC took out another loan on the property containing the house. The loan came from a different bank and was worth $2.85 million.
Second mortgages are common lines of credit that allow property owners access to capital. Public records do not reveal the borrower's motives. One possible scenario, however, is that the owners reached a private agreement with future buyers and agreed to put up the capital to make improvements to the property, in anticipation of that future sale.
I also reviewed building permits issued for the Lapham house. In 2013, according to the city, contractors built an 8-foot wall around the back of the property and moved the air conditioning units below a retaining wall, out of sight. In 2014, builders applied for permits to build an outdoor dining area and to add on to the tennis pavilion. Both projects were delayed due to presidential visits, according to the city; permits were re-issued in mid-2016.
Even contractors working on presidential homes have to apply for building permits — at least they did for Gerald and Betty Ford’s home at Thunderbird Country Club, a neighborhood near Thunderbird Heights to which the Fords retired. In 2007, a contractor received permits to convert a garage into a bedroom and install a new generator.
The Fords’ home was never owned in their name. Deed records show the property was bought by the University of Southern California in 1976, the year Ford was voted out of office, and sold by the university in 2012, after Betty Ford’s death.
According to Rancho Mirage, no building permits have been pulled for the Wambaugh house since work on the septic system in 2003.
Then there’s the question of whether the Obamas could afford either of these homes. I looked at Barack Obama’s 2015 financial disclosures in January and found that Obama held between $903,000 and $2.02 million in 2015, including investments in U.S. Treasury bonds, retirement accounts and a State of Illinois pension plan, which cannot easily be turned into cash. In checking and savings accounts, he reported $130,000 at most. Plus, he reported a mortgage worth between $500,000 and $1 million on a Chicago home.
According to the Riverside County Assessor’s office, the Wambaugh house is worth about $3.46 million. The Lapham house is worth $3.24 million, and the vacant lots on either side, $2.15 million total.
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I have vacillated between these houses for years now — believing that the Obamas did, in fact, buy the Wambaugh house; believing they’re in talks to buy one or the other; believing all of this is bunk.
The Obamas have not explicitly described their post-White House plans — beyond staying in Washington, D.C. until their younger daughter finishes high school — but presidents tend to earn large sums from speaking engagements after leaving office. Personally, I think the Lapham home is stunning. The theory that the former First Family might eventually buy that house currently makes the most sense to me — though that will likely change as I get more information.
There are some rumors I can’t publish now, because sources asked to tell me stories off the record. Many come from someone who has a friend in the neighborhood in question, but when I seek verification, that friend never answers his phone. If you're one of those people, reach out to me.
In the meantime, I’m going to keep checking property records and taking calls. I'll let you know when I know for sure.
Rosalie Murphy covers real estate and business at The Desert Sun. Reach her at rosalie.murphy@desertsun.com or on Twitter @rozmurph.