Copper Beech saga continues to unfold: buyer is Ray Dalio

Copper Beech

Copper Beech

(Bumped from yesterday)

The reported sale of Copper Beech for $120 million was baffling because the property was simply not worth anything like that amount; I’d guessed $35-$45 million, others thought a bit more, but $120 million? Not a chance. The two rumors floating around were that the buyer was either (a) a Russian, seeking to move assets out of Putin’s reach or (b) Greenwich’s Ray Dalio, founder of the world’s largest hedge fund, Bridgewater. I could understand, maybe, a Russian paying a huge premium over market value for property if his primary concern was getting his money over here, but why on earth would Dalio pay so much?

It turns out, he didn’t. Dalio’s been “confirmed” as the buyer (confirmed by impeccable sources, but remember: ten years ago, Dick Cheney was convinced by his impeccable sources that the Copper Beech mansion was stuffed with WMD), and the speculation is that he bought the $120 million debt owed on the property at a steep, steep discount.

Now that makes sense. Copper Beech’s lenders loaned their money based on timberland owned in the northwest and the Greenwich property. The timberland plummeted in value when the feds shut down lumbering to save the spotted owl and the Greenwich property by itself was never sufficient to cover the debt. (The full history of the property and Copper Beech’s owner, John Rudey, can be found here, in the NYT).

Some years ago, when a workout of the loan was being discussed, Fudrucker was approached by an out-of-town appraiser retained by the lender to come up with Copper Beech’s value. FF and I spent a fair amount of time looking at subdivision possibilities and the value of the mansion itself and came up with that $35-$45 million value.

Whether or not that was the final figure the appraiser gave his employer is unknown, but it’s unlikely they were under any illusion that their loan was secured in full. So enter Ray Dalio. Mystery solved as to the buyer but remaining unanswered, so far, is the fate of the property: a donation to the town for parkland, as wishful dreamers hope, or the new location of Chateau Dalio?  Time will tell.

41 Comments

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41 responses to “Copper Beech saga continues to unfold: buyer is Ray Dalio

  1. Sound Beacher

    What is the zoning there? Could it be his new headquarters for Bridgewater, since I don’t think they are going forward with the Yacht Haven boatyard site in Stamford. Your thoughts….?

  2. TraderVic

    I thought that David Ogilvy confirmed that the buyer was not from “in town”…?

  3. Phew….best outcome we could hope for…..

  4. TraderVic

    The Dalios’ improvements to Bruce Park this spring have been a huge home run, especially the new sidewalks.

  5. pulled up in OG

    If debt bought at “steep, steep discount” why would transfer fees/taxes be paid on the full nut?

    • FF

      You have to pay transfer fees based on the entire economic value of the property, even if debt is being purchased. If not, people would figure out ways to fully avoid these taxes all the time.
      If you want to know the real transfer price, ask David Ogilvy what his commission was

      • pulled up in OG

        I think Rudey bought that joint for $7.5M. If it ended up as collateral for ~$120M of debt, I fail to see why that should add some insane amount of “economic value” to the property beyond whatever “discount” price “Dalio” actually paid, for real estate transfer tax or commission purposes.

        Never mind that even that discount price (on some debt package) has f’all to do with the actual value of the property.

  6. Anonymous

    Wouldn’t the property make a great waterfront park for this part of town. If you live in central Greenwich and want to take a nice walk along Long Island Sound, you really have to drive to Todd’s. In this area there’s only a pier at the end of Steamboat Rd. or a few picnic tables next to the parking lot of Grass Island. Hopefully it will be Dalio Park at Cos Cob Harbor.

    • Anon

      That will make the neighbors happy.

    • Anonymous

      Why don’t you drop Mr Dalio a line, let’s hope he agrees with your vision!

    • pulled up in OG

      The last thing this town needs is another square inch of anything to look after.

    • Maybe he will hold the Greenwich Town Party there? not sure if a lot of people know but There is sunrise to sunset public access on the walkways along the water at Delamar Hotel and the big office building next door (old UBS building?). I think it was a zoning condition that to build them (renovate Delamar) that they have to continue to provide public access.

  7. Doesn’t Dalio presently live on the water nearly adjacent to Copper Beech, a bit west?

  8. Anonymous

    If Dalio has assumed the debt, was there ever really a sale here? Wouldn’t he simply own the right to the property after the default by the current owner? Does Ogilvy get a commission here as it doesn’t seem like his client, unless it is the bank, ever sold anything? I guess I’m a bit confused.

  9. Charles Ponzi

    If it’s true that the debt was purchased for cents on dollar, isn’t it misleading to report the purchase price as $120mm? It’s almost like saying you won $120mm in Powerball, but took the $50mm lump sum.

  10. Anonymous

    Dalio lives nest door- his property is contiguous to Copper Beach. Still don’t understand the $120,000,000 Will someone please explain

  11. Just_looking

    I wonder if the timber land was included in the deal.

  12. AJ

    I thought he was going to turn it into a water park with giant water slides, something like what you might find in New Jersey. With easy on, easy off access at exit 4, it would be the perfect spot.

  13. NextOnTheTee

    Driving range?
    9 hole course?
    Come on Ray!

  14. Nopo chick

    Chris please post about the house down the street that just came on the market: 10 Florence…thanks!

    • NextOnTheTee

      Someone needs to knock 10 Florence down.
      And one or two of its neighbors as well.
      Especially that half finished, now dilapidated dwelling of a crazy guy and his mommy.

      • housecat

        Careful – someone at the nut house apparently reads (comments? Yikes) this blog. I wouldn’t give too many clues to my ID if I were you – you might end up with plywood manifesto attached to your garage.

      • Nopo chick

        That house is on Bonwit, make them an offer!

        • Anonymous

          You mean that house with the house inside of it? What a freaking eye sore….what the heck happened there? I heard the contractor took off with their money and it’s been like that for years now. How the town allows that to continue and gave them a CO is beyond me. I would hang my head in shame, and move to Bridgeport ASAP.

  15. Patrick

    Ray Dalio lives in Belle Haven. His CFO bought adjacent to copper beech

    • chimney

      Ray Dalio lives in Mead Point, Nipowin Lane, where he completely
      renovated an old house, previously owned by Bus Mosbacher. His CFO
      bought the property Mike Carpenter and before, John Griswold owned.

  16. Anonymous

    maybe he’ll rename it palladium point.

  17. Publius

    Food for thought. Let’s say RD paid a larger nut that thought ( deep discount, not) given that the banks being what they are may have been reluctant to take a huge haircut. Say he paid 80-90mm for the property for arguments sake. Consider the possibility that a large portion of the property directly east of Bruce Park could be donated to the town. A value of that property would have to be established for tax purposes. Let’s say it is valued @ 50% of the purchase price. I know locals will disagree with this, but a very good tax accountant or tax lawyer can probably make the case that this is so, particularly if the land donated extends all the way to LIS. This is why they exist and this is why you pay them the big bucks.

    I have to assume that RD or a taxable family entity is the sole owner of the LLC. In that case the flow through of a donation to the town valued at say 40-45mm would go back to the taxable entity. RD’s tax return (speculation here) would contain both sizable ordinary income and capital gain/loss. The fund results have been very plebian the last 2 calendar years so his income may have been crimped somewhat. The tax code does impose restrictions on the deductibility of charitable giving based on reported income but any donation not used in a given tax year can be carried forward for 5 years. It is likely that RD will be generating significant taxable income over the next 5 years so a large donation in 2014 not fully used should be fully used in the next few years. Another assumption is that the marginal tax rate on the federal level is 39.6% and the CT state tax is 6.7% for a combined 46.3%.

    Taking a lower end purchase price of $80mm, there are potential tax savings based on the above of $18.5mm (46.3% of 50% of the purchase price) that further reduces the net effective purchase price to RD not to mention the civic benefits of keeping the bulls-eye off one’s back by the proletariat. Given that the D’s funded a buffing and puffing of Bruce Park that abuts the property it would not be unreasonable to speculate that this will come to pass. My opinion only although I have it on good authority that he was the purchaser of the property at what price I only speculate at this point.

  18. Anon

    Nice present to the town if true, but who’s going to pay to maintain it? Does it come with a trust fund?

  19. Kevin

    As mentioned before does anyone know if the MT property is part of the deal. Who now has title to that property? If MT has higher transfer taxes could be that more value was assigned to the Greenwich property.

  20. Anonymous

    If you build it, they will come….

  21. Mr. and Mrs. Dalio are the very generous benefactors of the Greenwich Town Party on May 24, with Buddy Guy and Carlos Santana this year. Mrs. Balzac and I are in. Who will join us? Gonna be fun.
    http://greenwichtownparty.com/

  22. Anonymous

    Dalio’s son now lives in the Belle Haven house that Ray use to live in