Michael Jackson's Neverland Ranch might be a tough sell

Long after the fans have left the gates of Neverland, the fantastical Santa Barbara County ranch once owned by Michael Jackson, the far less whimsical question remains of what will happen to it.

Colony Capital, the private equity company that bought the loan on the property, sparing it from foreclosure, won't say what its plans are.

But the ranch, about two hours northwest of Los Angeles that once featured a zoo and amusement park and had an estimated value of $96 million to $120 million, could wind up as something of a white elephant.

The homes of even the most beloved stars rarely see any appreciable boost in value from their celebrity cachet, and in the case of Neverland Ranch and the Los Angeles mansion Jackson was leasing when he died, the association might even work against them.

"Neverland and the Jackson estate have an uphill economic battle," said Randall Bell, a specialist in valuing stigmatized properties with Laguna Beach, Calif.-based consulting outfit Bell Anderson & Sanders.

Jackson was in default on the loan on his ranch when it was purchased by Colony Capital last year for $22.5 million.

The people standing outside Neverland aren't the people with the financial resources to purchase the property, Bell said.

"Right or wrong, Jackson's properties are negatively perceived by some with regards to crimes against children," he said. "As we know from crime scenes across the country, even where convictions do not occur, these do have a significant impact on property values."

Stigma issues also have arisen with properties associated with O.J. Simpson and JonBenet Ramsey, among others.

Future buyers will have to consider "the Michael Jackson legacy as well as the negative perceptions," Bell said.

Even if the Jackson association is seen in a mostly positive light, it isn't likely to enhance the properties' value much because the regional real estate market is relatively immune to star power.

"People who buy houses like that are usually almost celebrities in their own right, so the star quality is not going to affect the price," said Raymond Bekeris, president of Los Angeles-based John Bruce Nelson & Associates, who sold a Beverly Hills mansion in 2004 that Jackson had been renting. "I don't remember ever being in a negotiation where someone said, 'Hey, you should pay more because Michael Jackson lived here."'

"Because a celebrity lived there doesn't make it worth more," said Billy Rose of Rose & Chang, Prudential California Realty in Beverly Hills, "but it may make it sell faster." Such properties can generate more interest.

One notable exception in which the owner's name added value was the sale of Frank Sinatra's former house in Palms Springs, Calif.

"It brought in additional money because there was a Rat Pack sensibility about it," said Ron De Salvo of Coldwell Banker in Beverly Hills.

But he hasn't seen that play out in the Los Angeles area. "What people pay extra for today is the architect more than the celebrity."

Colony Capital declined to comment for this article.

Whether the property occupied by a celebrity was owned or rented doesn't matter, Bell said. (Jackson had been leasing a French chateau-style estate built in 2002 with seven bedrooms and 13 bathrooms for $100,000 a month when he died.)

"Sharon Tate was a renter but nevertheless that property was very much impacted by crime scene stigma," he said, referring to the Manson family murders of 1969.

Likewise, if the house remains or is destroyed doesn't diminish the association with the address.

As for Neverland, "Whether the developers come in and try to capitalize in some way with a museum like they did with Elvis and Graceland or try to bulldoze it, they will have issues either way," Bell said.

A museum might be financially viable, he said, but the location is fairly remote.