Last June, one of Palm Beach County’s largest privately owned estates hit the market. Asking price $ 79.5 million. According to the Wall Street Journal, Oracle founder / Tesla investor Larry Ellison scooped it for just “upwards of $ 80 million”.
Located on 7.35 acres in a North Palm Beach gated community, this incredible property has a 520-foot seashore. The 15,500-square-foot main house has seven bedrooms, a home theater, and an exceptionally large liquor room. The grounds, which resemble a golf course, have several pools, a tennis court, and large sports centers.
The seller, activist investor Gabby Hoffman, bought the property in 2012 for $ 17.5 million. This is a 9-year ownership increase! If you think about it, Gabe was originally paid $ 7 million to stay at home (before maintenance costs and property taxes).
Here is a tour of the stunning beach complex:
Who is Larry Ellison?
Larry Ellison earned the bulk of his $ 89 billion fortune for software / database company Oracle, which he founded in 1977. For those who don’t know what Oracle does – you know how PC computers run on Microsoft products? Most business and government computers (servers, payroll services, databases) run on Oracle products.
Larry and Bill Gates are rivals for lifelong jackfruit. Oracle went public on March 12, 1986. The next day Microsoft went public. Today Microsoft only has a market cap of $ 2 trillion. Unfortunately for Larry, today is about 10x Oracle’s market cap. Larry still owns more than 30% of his company, while Gates owns less than 3% of Microsoft.
Oracle is not the only source of Larry. In the 2018 period, Larry quietly spent $ 1 billion buying Tesla stock. By the time he disclosed his stake to the SEC, he had accumulated 1.7% of Tesla, enough to make him the second largest individual shareholder behind Elon Musk. Elon immediately added Larry to the board of Tales.
In the last year or so, Larry’s share of Tesla’s share has increased in value by a factor of 10. At today’s closing price, Larry’s Tesla shares are valued at $ 11.5 billion.
With total assets of $ 89 billion, Larry is currently the 10th richest person on the planet.
Why leave California?
In December, Larry announced that he was planning to leave California. Larry cited California’s extremely high (and only perishable) taxes as the primary reason for leaving his home of more than 50 years.
Larry has a bit of income to save from taxes! Larry owns 1.1 billion shares of Oracle. Whenever Oracle pays a dividend, Larry receives a large injection of cash. For example, just two days ago – April 7 – Oracle issued a dividend of $ 0.34 per share. This means that Larry received $ 374 million of direct deposits from his company this week.
In 2020, Oracle issued four dividends, resulting in approximately $ 1 billion in cash payments to Mr. Ellison. Since 2003 he has received $ 12 billion from Oracle dividends alone. This works out to an average of $ 1.7 billion per year.
And with each of those dividend payments, the California Franchise Tax Board has taken 13.3% from the top. At $ 12 billion earned since 2003, California’s tax man has earned $ 1.6 billion.
There is no state income tax in Florida. If Larry earns another $ 12 billion in dividends over the next seven years, he will save by moving to Florida:
$ 230 million every year!
Every single day that Larry Ellison lives in Florida, California, he will save $ 644,000. Every day.
In other words, Larry will pay his new $ 80 million mansion for free and on dividend tax savings every four months!
Larry’s Real Estate Portfolio
Larry significantly leaves California’s real estate footprint behind. For the past several decades, his primary home has been a 45-acre property in the Bay Area suburb of Woodside. The estate and mansion are built after the 16th-century Japanese garden estate. It even has a 3-acre man-made lake with several waterfalls. Those who have gone there have described it as nothing less than magical. The property could be worth $ 200 million if it was ever listed for sale.
Then there is Malibu. Between 2004 and 2005, Larry spent $ 180 million to acquire 12 properties in Malibu, California. They spent a total of $ 65 million to acquire five contiguous properties on a portion of Malibu’s ultra-exclusive Carbon Beach.
It is followed by Rancho Mirage / Indian Wells. In 2009 Larry paid $ 100 million for the Indian Wells Tennis Garden (a large tennis center), which hosts the annual BNP Paribus Open. Two years later he paid $ 43 million for a nearby 249-acre Porchini Creek Estate golf course located halfway between Palm Springs and Palm Desert. Only last week, Larry received permission from the Rancho Mirage Town Council to convert the 191-acre Porchine Creek into a special retreat. The remaining 60-acre acre is his private residence.
California owns the Hawaiian island of Lanai outside Larry. I do not say that as an exaggeration when I really mean that he owns a lot of land on the island. He owns the island. Larry bought Lanai in 2012 for $ 300 million. Over the past decade they have spent more than $ 500 million to upgrade the island, primarily its Four Seasons Hotel which is now a second location in addition to the original beachfront retreat.
Congratulations to the new house Larry! Sorry to leave you California! Hope the politicians of our state will wake up someday and realize that we need taxes on individuals. I don’t know why any billionaire would like to live in California at this time.