1922 Underwritters Meeting
Edward Gardner (E.G.) Lewis
In University City, MO
By L. R. Schott
In 1921, Frank Vanderlip contacted the founder of University Park, MO, Atascadero, CA and entrepreneur, Edward Gardner Lewis, about purchasing the Syndicate property. Even though Lewis was a utopia visionary who had some questionable dealings, he was able to acquire an option to buy the entire property with considerable financing for a reported $5 million ($318/acre). Lewis envisioned a a development on the Peninsula with a state University, a population of over 200,000 people, an electric rail connecting the Peninsula to both Los Angeles and San Pedro and a development period of only 3 to 4 years. However, there were apparently some complex conditions with the transaction and financing, which also required Lewis to achieve certain goals and sale objectives. The Title Insurance and Trust Co. became the trustee for an underwriting subscription of $35 million in indenture notes. There was great interest in the project with over 4,700 people attending a downtown Los Angeles underwriters meeting in June of 1922. (Please see the photo on the right.) About that same time, the Redondo Hotel was leased to Lewis. It was used as the offices for the Olmsted Brothers to design what was first known as the Palos Verdes Project and also used for the first Palos Verdes Homes Association (PVHA) meetings (until the hotel was demolished in 1925).
However, when conditions of the Trust Co. decided that the terms of the trust agreement were not met by Lewis in early 1923, the Trust company withdrew as trustee. They returned all funds to the underwriters and Commonwealth Trust Co. became the new trustee, which was merged with Bank of America later that same year. Some 80% of the original subscribers reinvested in the new Palos Verdes Project and became solely owned by some 4,000 underwriters. From the funds received from the Palos Verdes project, the Vanderlip Syndicate was reportedly paid $1.5 million ($465/acre). However, Vanderlip retained most of the remaining acreage and transferred the land into an entity called Palos Verdes Corpration in 1925.
Even though the Olmsted firm developed plans for the entire 16,000 acres in early 1920's, largely due to financial issues, detailed plans were developed for Palos Verdes Estates in only two areas. The main area, consisting of five districts or neighborhoods, (including Valmonte, Malaga Cove, Margate and Lunada Bay) was located on the northwest part of the Peninsula near Redondo Beach. The second and much smaller area near San Pedro, was a district known as Miraleste. Together, these six districts comprised Palos Verdes Estates (PVE) containing what was mentioned as about 3,200 acres according to the 1926 PVE Map. (However, in a 1930 article by Warren D. Cheney a more specific area of 3,225 acres was mentioned.)
Once these two areas became more developed and established, the concept was to ultimately develop other districts between those noted and expand Palos Verdes Estates comprising most of the Peninsula, according to the Olmsted Brother's master plan. However, in the costal area around Portuguese Bend, considerations were made for Vanderlip, his friends and those in his syndicate to have large estates. There were even plans and efforts for a large state university on the Peninsula as part of this overall concept, along with light rail that would connect the Peninsula with the surrounding cities and downtown Los Angeles. Since PVE was considered to have a relatively remote location when it was being planned, each of the districts or neighborhoods had at least one or multiple business districts planned of various sizes. Along with a trail system comprised of green belts formed by parklands and that could also be accessed by Paths, PVE was planned for people to walk, ride on horseback and even use the light rail, besides using motorized vehicles on the streets. There were also plans for more affordable housing, including more areas for apartments and duplexes, as shown on the aforementioned map. Therefore, the original vision by both E. G. Gardner, Olmsted and others who founded PVE, was a much larger and diverse development than what it is today.
Events quickly spiraled downhill for Lewis after he left PVE. It seems that he was the "Bernie Madoff" of his day, owing tens of millions of dollars to thousands of people. This forced him into bankruptcy in 1925. A couple years later he was sentenced to a prison term of several years for mail fraud. He became a recluse thereafter and died broke in Atascadero at the age of 81 in 1950.
Despite the controversy surrounding Lewis that must have served as a distraction in the development of PVE during the mid 1920s, Lewis was instrumental in reengaging the Olmsted firm, and hiring a strong development team, including Charles Cheney and Myron Hunt. The indenture agreement that was developed for PVE was particularly noteworthy. It provided for extremely detailed covenants and restrictions, which were some of the most extensive ever prepared for a planned development. Within these, the PVHA was established with architectural guidelines and presided over 800 acres of land that were dedicated for parks and recreational use, known as Parkland.
Edward Gardner (E.G.) Lewis