by Paul R. Spitzzeri
In summer 1917, Walter P. Temple and his family were the beneficiaries of an astounding stroke of good fortune. Oil stumbled upon by eldest child, Thomas, three years earlier on the steep hillside of a 60-acre property Temple purchased in 1912 from the estate of Elias J. “Lucky” Baldwin and which Baldwin took by foreclosure from Temple’s father, F.P.F., over thirty years earlier, generated a productive well drilled by Standard Oil Company of California.
Over the next several years, some two dozen wells were drilled at this northeastern corner of the Montebello Hills and on the flat land adjacent to the east and, among these were several gushers. With a one-eighth royalty, the Temples made a small fortune, allowing Walter to start his own oil company, invest in others, and then move into real estate.
His initial endeavors in land development began in Alhambra, where the Temples settled soon after the revenue from the oil royalties began to flow (a house in that burgeoning city was purchased the same week the Temples acquired the 75-acre Workman Homestead, where the museum is now). Shortly afterward, however, property was picked up in San Gabriel (with its mission being an important part of the family’s history), El Monte, Puente, Monterey Park, the future Temple City and downtown Los Angeles.
In the latter, Temple joined syndicates that constructed two eleven-story office buildings on Spring Street on both sides of 8th Street and with Main Street at the rear. This location was particularly significant for contemporary and historical reasons. For the first, Spring Street was the financial district of the city and yet another in a series of building booms brought construction activity south to where these new structures were built. With respect to history, Temple’s uncle, Jonathan, and father owned prime piece of land, from about 1830 to roughly 1880, in what was long known as the Temple Block, between Spring and Main, with Temple on the north end and above 1st Street on the south.
Nearly a half-century after F.P.F. Temple lost his significant downtown holdings in the aftermath of the Temple and Workman bank collapse and Baldwin’s foreclosure on most of the property he and father-in-law William Workman possessed, Walter, thanks to his astonishing turn of luck, seemed dogged and determined to follow in his father’s footsteps.
One of the pair of Spring Street structures he helped build was the Great Republic Life Building, which stood on the north side of 8th. Its anchor tenant was a life insurance company in which Temple’s attorney and business partner, George H. Woodruff, was a director and whose president, A. Otis Birch, was an Orange County oilman and Los Angeles furniture company owner.
Among the other investors was Milton Kauffman, Temple’s business manager, and Albert Walker, an architect who, with his partner Percy Eisen, designed the structure and many other commercial buildings in Los Angeles. Walker and Eisen were also the initial architects of record for Temple’s La Casa Nueva, the Spanish Colonial Revival mansion at the Homestead begun in 1922.
The firm created to develop the Great Republic Life Building was the Central Finance Building Company, organized 1 December 1922 (four weeks before Temple’s wife, Laura, died) and which issued $700,000 in bonds acquired as a loan by S.W. Straus and Company, which was deeply invested in Los Angeles commercial property development during the Twenties and which was covered in a post on this blog about a year-and-a-half ago concerning a bond issue for the Edwards & Wildey Building, the architects of which were Walker and Eisen.
Issuing bonds for the building of commercial structures was a relatively recent development and the Straus firm was particularly aggressive in utilizing this form of security for the rapidly expanding downtown business district. In the case of the Great Republic Life building, the Central Finance Building Company’s five directors, including Temple, met on 26 March 1923 and voted to create the bond structure to be used for the project.
Temple’s copy of the minutes of that meeting, issued by Milton Kauffman, are in the Homestead’s collection, as is a balance sheet statement from a little over two years later on 30 April 1925. The minutes lay out the form of the bond issue, so that the principal was payable in graduated amounts from $15,000 to $38,000 on an annual basis from 1 October 1925 to that date in 1939 with the balance of $309,000 due on 1 October 1940.
The bonds were issued through 6 1/2% first mortgage gold bonds, dated 1 April 1923 and the document covered other aspects of the issue, including that the bonds “shall be payable both as to principal and interest at the office of S.W. Straus & Co.” Moreover, these payments were “secured by a mortgage or deed of trust upon such of the real property or real and personal property of this corporation, either now owned or which may hereafter be acquired . . . to Arthur W. Straus . . . as Trustee.” He was also to receive a temporary bond for $700,000 until permanent ones could be prepared.
With funding in place, construction soon began and continued into early 1924 and the use of bonds for development of such structures was rapidly advancing. A Long Beach Telegram article from the end of April 1923 noted that Straus was the largest issuer of building loans through bonds in the nation, having underwritten since the first of that year well over $50 million of such instruments.
The firm added that “there is a steady inquiry for capital for building construction purposes” and noted that “in Los Angeles, two of the largest building projects in the city—the mercantile arcade [known commonly as the Arcade Building] and the Great Republic Life building—are being financed by Straus loans.”
Ads taken out in local newspapers by Straus promoted the building and the securities and showing the “Straus Plan Amortization” laid out in the minutes. The security of the plan was based not only on the mortgage from the Central Finance Building Company but a first lien on income produced from the structure when completed and deposited with Straus to meet interest and principal due on the bonds.
Earnings were projected to be about $150,000 per year, three times the largest expected annual interest, while the location was declared to be an “exceptionally desirable space for stores and offices.” More than half of the space was reserved for those ready to ink long-term leases, including the anchor tenant and its two floors.
As to the borrower, the Central Finance Building Company, it was said to be “composed of several well-known Los Angeles business men,” including Birch, Walker, Woodruff, “Walter Temple—owner of vast oil-producing acreage” and Sylvester Dupuy, who, within two months, would join Temple, Woodruff and Kauffman as the developers of the new Town of Temple, renamed Temple City in 1928. Dupuy, a wealthy sheep rancher, later built the “Pyrenees Castle” in Alhambra that later was the residence of music producer Phil Spector, whose shooting death of a woman in the house led to his conviction and imprisonment.
By spring 1924, the Great Republic Life Building was completed and among its tenants, aside from its namesake, was the commercial development firm of W.H. Daum, which is still in business and, for example, has projects in the City of Industry; Walker and Eisen; Billie Woolf’s upscale clothing shop; Howard Throckmorton’s investment company; the Manufacturers’ and Wholesalers’ Finance Corporation; the United States National Bank; and developer the Harold G. Ferguson Corporation.
George Woodruff also had two of his law firms in the structure, including with long-time partner Clyde Shoemaker and then Woodruff, Musick, Pinney and Hartke. Walter Temple also housed his three main corporations in the building, including the Walter P. Temple Oil Company, the Temple Townsite Company and the Temple Estate Company, the latter handling all of his development projects outside Temple City.
In 1925, the Central Finance Building Company decided to issue just over $500,000 in stock, issued at $100 par. That June, the Los Angeles Stock Exchange approved the listing of these stocks, along with those of the National City Holding Company for the structure across the street from the Great Republic Life Building. The building company originally incorporated in 1922 with $1 million in stock and decided to offer the outstanding stock through the exchange. At the time Birch was president, Woodruff was vice-president, Dupuy was treasurer and Kauffman was secretary. Woodruff, Birch and Dupuy were joined by Temple and Walker as directors.
The balance sheet of 30 April 1925 from the Homestead’s holdings provides detailed information on the financial position of the Central Finance Building Company, including the value of the land as just above $525,000, the building’s value as a little north of $700,000, cash on hand at just under $9,000 and other assets for a total of more than $1.3 million. For liabilities, the bonded indebtedness was the original issue amount minus not quite $9,000 in payments to a sinking fund; notes payable of over $80,000, and accounts payable, payroll and others, for a total of about $780,000.
The newly issued capital stock was also shown, along with some earned surplus of about $17,000 minus $15,000 in dividends paid out to shareholders. Net earnings for the first four months of the year totaled a little under $20,000, leaving a surplus of $21,500. The net worth was tabulated as not quite $525,000.
A revenues and expenses page showed that rentals per month totaled $15,000, while there was only $525 in vacant space. When Straus advertised $150,000 in yearly income, this was a little shy of the income two years later, which would be closer to $180,000. As for expenses, there were rental operations and management fees of near $3,000 per month, taxes of $1.250 each month, monthly interest on the bonds of almost $4,000, and others for about $8,500. This left a net profit of just below $6,000 each month, less a monthly payment to the bond’s sinking fund of $1,250.
So, roughly a year after the building’s completion, the financial picture of the Great Republic Life Building looked solid on the balance sheet. As long as the national economy was humming along and the situation in the region and city were strong, the future looked bright.
In fact, the following year, 1926, Temple, Woodruff, Kauffman and Dupuy agreed to issue bonds for financing the continuing development of Temple City, but the problem was that the real estate market began to soften and Temple City had some issues with speculation by buyers of lots and a well-intentioned law for assessments for amenities like street-lighting, sidewalks and other infrastructure that forced property owners to pay the property tax of defaulting neighbors.
For Walter Temple, the decline at Temple City mirrored the decreasing production of oil at Montebello and a lack of success in other fields and he quickly was swallowed up by debt and declining revenues. By the time the Great Depression began at the end of the decade, he was in dire straits. His last building project, the Edison Building in Alhambra, was completed in April 1927 and he moved his three companies from the Great Republic Life Building to the Edison. All three were defunct within just a few years and Temple’s last property holding, his beloved Homestead, was lost to a bank foreclosure in July 1932 as the Depression sunk to its lowest depths.
As for the Great Republic Life Building, it was, naturally, significant impacted by the economic crisis. Though earnings were still decent and occupancy at capacity at the beginning of the Thirties, there was talk of refinancing the Straus bond with a lower rate first mortgage, though that proposal was indefinitely delayed. Yet, four years later, occupancy was just above one-half and earnings in 1933 could not keep up with expenses. It appears that the Central Finance Building Company had recently folded as there was a trustee in possession.
Like many of the historic buildings around it, the Great Republic Life Building is now comprised of lofts, so, as it approaches its centennial, it has survived and been adapted to the rapidly changing urban environment of modern Los Angeles.