Going, going, gone? Maybe.
On Thursday, the 22,000-square-foot Lake Minnetonka house designed by Grammy Award-winning producer James “Jimmy Jam” Harris sold for $2.6 million — a fraction of its assessed value — during a live auction in the home’s kitchen.
The deal, which won’t be final until approved by the bank that repossessed the home from its previous owners, marks what could be a new era — or end — for the home. Several real estate agents and a handful of bidders speculated that the contemporary, flat-roofed house could get torn down.
“They’re not going to give it away, but they will take any reasonable offer,” said auctioneer Sam Marshall, as he started the auction with an opening bid of $1 million for the home on Hardscrabble Point in Minnetrista.
The winning bidder declined to give his name or his plans for the property. He was among 11 registered bidders and a couple of dozen spectators, including one who got his Rolls-Royce stuck on the icy driveway.
Listing agent Scott Stabeck of Lakes Sotheby’s International Realty in Wayzata said he’d received several cash offers during the four or five months the house was on the market, but none was accepted by JPMorgan Chase. It was the bank’s decision to put it on the auction block.
“There were definitely legitimate offers,” Stabeck said. “We’ve had a ton of interest in the house.”
Sal Cangiano, a real estate developer who lives in northern Virginia and owns a lake house nearby, said he bid on the house “just for kicks.” He backed off when the bidding went past $2 million.
“There’s a lot of work that needs to be done in this house,” Cangiano said, estimating that it needs at least $1 million in repairs.
Cangiano is no stranger to such auctions. He travels the country in his private jet buying large tracts of land that he sells to big national home developers, and recently squared off in an intense bidding war with developer Donald Trump for a winery that was being subdivided.
Harris, a record producer and Minnesota native, bought the 3.5-acre lot for $420,000 in 1987, and designed the home himself with a 12-car garage and an indoor swimming pool just off the kitchen. Construction was completed in 1991, and when Harris moved to Los Angeles, he listed it for $11 million. It sat on the market until June 2007, when Christopher and Sandra Hintz bought it for $7 million with a $150,000 down payment, according to public records.
After quickly refinancing that initial Washington Mutual mortgage, by early the next year the Hintzes stopped making payments and the mortgage went into default. Foreclosure proceedings were delayed because the couple filed a lawsuit claiming that they’d been the victims of predatory lending practices. They’d hoped to refinance the mortgage for at least $10 million to fix up the house. By September the government had seized the assets of Washington Mutual, which was then acquired by JPMorgan Chase, which took possession of the house in 2012. It hit the market last year for $4.499 million despite an estimated tax value of $6.4 million.
David Azbill, a sales agent with Coldwell Banker Burnet, agreed that the house isn’t without its challenges.
“It’s a tough sell, there’s not a big market for a house like this,” said Azbill, who was at the auction Thursday. “I don’t think that it was a steal, it was a reasonable value.”