Carlos Vigon: The man who sold the AES Power Plant on a cold call
Manhattan Beach resident grew up in Lennox and fished in front of the power plant he would one day sell
by Rachel Reeves
The sale of AES Redondo Beach, one of the largest real estate transactions in South Bay history, began with a cold call.
Carlos Vigon remembers the date, the weather, and the voice of the receptionist who answered the phone at the power plant, which had for years been the subject of headlines and citywide ballots.
Vigon has thought about that call often since that day six years ago because it was not only a highlight in his career but also confirmation of the mantra on his license plate: BLVNSCN. Believing is seeing.
“I really do believe that thought is creative,” Vigon said in an interview. “I grew up in Lennox. Back then I would have never imagined I could pick up the phone and call the owner of the power plant and ask if he wanted to sell it.”
Vigon, 61, immigrated to Los Angeles from Cuba in the sixties. His family gained citizenship as political refugees and settled in Lennox, a predominantly Latino neighborhood in the South Bay of Los Angeles.
“Most people in the Beach Cities don’t consider Lennox part of the South Bay,” he said. “People from Lennox generally don’t do things in the Beach Cities.”
Lennox has a per capita income one-sixth that of Manhattan Beach, where Vigon now lives with his wife and two boys. His early memories of the Beach Cities feature him riding his bike with his fishing pole, down 190th and past the power plant on Harbor Drive to the Redondo Beach Pier. He liked a secret spot in the harbor where the fish were always biting; it was where the plant expelled warm water used to produce the steam that spun the hulking turbines.
Vigon was an enterprising kid. He worked a paper route and went door-to-door selling candy and lightbulbs. He worked his way through high school and UCLA by finding jobs in sales and telemarketing, then began working as a real estate investor.
In 2014, while Vigon was working as a broker at the El Segundo office of CBRE Group, his boss asked if he’d lead a team that would represent a high-profile client interested in developing in the South Bay. CBRE is the largest commercial real estate company in the world. At the time, Vigon was bound by a confidentiality agreement; now it’s public knowledge the client was the Newport Beach-based Irvine Company. The client wanted scale.
Vigon offered to make some cold calls, though he could have delegated the task to a junior member of the team.
“I have always liked cold calling — everybody has their thing,” he said, laughing. “It’s this little adventure you can have sitting at your desk. You’re picking up the phone and calling phone numbers and at the other end there’s somebody who might answer and do what you want them to do, which helps them and makes you a lot of money.”
He began working his way through a list of the owners of the largest properties in the South Bay. Many didn’t answer. Some said they weren’t interested. Some demanded to know how he’d obtained their phone numbers. Some warned him not to call back.
Then he called AES Southland, owners of the power plant he’d passed on his bike on his way to the pier to go fishing.
A receptionist put him through to Eric Pendergraft, AES’ regional director. Vigon talked about what a nice day it was and how much he loved living on the coast, both easy commonalities, and then he asked Pendergraft if he had considered selling the 51-acre property.
“Well, Carlos, you know what?” Pendergraft said. “I have.”
State agencies had mandated the gradual paring-down of fossil fuels, so AES had designed what it called the Redondo Beach Energy Project, which proposed to “replace the existing power plant with a smaller, more efficient and environmentally friendly natural gas power plant.” The plan had been met with vehement public opposition leading to a 2013 ballot measure to retire the plant. The measure was narrowly defeated.
Vigon and Pendergraft arranged a lunch at Kincaid’s on the Redondo Beach Pier that would commence a series of meetings between AES and Irvine Company. In September 2014, the two parties signed a letter of intent to enter exclusive negotiations.
The market was exiting a recession and property values were appreciating. AES had also succeeded in getting Measure B on the March ballot. The measure asked voters to rezone the property for mixed-use development.
After Measure B lost, AES withdrew from its agreement with Irvine Company. For Vigon, that was the first disappointment in what would become a long, fraught process. The next came several months later, when the California Coastal Commission announced the power plant was sitting on six acres of natural wetlands that any development would need to restore, thus lowering the property’s value.
The property had been valued at over $200 million. Vigon made it his mission to convince AES to formally list the property with CBRE Group.
He thought about where it had all started for him: with fishing. He thought about how you don’t land a fish that’s bigger than your boat. This was a big fish; he needed a bigger boat. Vigon invited Kevin Shannon, one of the top-producing brokers at his firm, to join his team. In the fall, Pendergraft called and said AES would be accepting proposals from brokers interested in selling the property.
He and Shannon assembled a “broker dream team,” whose members possessed varying areas of expertise. In November, AES selected CBRE Group from a group of three competitors. The team began marketing the property in February 2016. In 30 years of working in commercial real estate, Vigon said, he had never seen such an overwhelming interest in a property.
His team fielded calls late into the summer. Vigon estimates he put more than 1,000 miles on his car, driving between his El Segundo office and the Redondo Beach plant to show the property.
More than 250 potential buyers from around the world signed non-disclosure agreements. Most were high-profile development firms. Leo Pustilnikov, a Ukranian immigrant in his mid-thirties, who would ultimately buy the property, was among the most low-profile of them all.
But a problem emerged: AES had never calculated the plant demolition and site remediation costs. The company put the marketing on hold while consultants did the analysis.
“When you’re in the brokerage business and you’ve got momentum and you’ve built up the energy and motion towards getting an offer from the right buyer, to stop it at that point is really disheartening and frustrating, to say the least,” Vigon recalled.
Marketing resumed in the summer of 2018. Many offers came with conditions. One potential buyer demanded a ballot initiative seeking community approval for development.
Eventually the contest narrowed to two buyers. One, Continental Development in El Segundo, stressed its openness to input from the community; the other, Pustilnikov, was willing to purchase the property without conditions related to community opposition or future legislation.
Pustilnikov won the bid in 2018, but many months would pass before the deal closed. During the waiting period, most of the members of the “dream team” left for other firms. Some married, some had kids. Vigon left CBRE in April of 2019 to open Paxcap Investors, a real estate investment firm. In November of that year, the California Public Utilities Commission voted to extend the life of gas-fired power plants in Huntington Beach, Long Beach, Oxnard, and Redondo Beach to 2022 in order to ensure there would be no gaps in the energy supply as California transitioned to renewable energy.
“That was another moment where it was like, the deal is dead again,” Vigon said. “You could write a book about this transaction. It’s somehow fitting that it would close in the midst of a global pandemic, in a financial crisis, in the unlikeliest of moments.”
The sale closed weeks after California’s leaders ordered everyone to stay at home to reduce the spread of Covid-19. The purchase price, which Pustilnikov has declined to disclose, was significantly lower than Vigon had expected that spring day when he made the most lucrative cold call of his career. Vigon describes the buyer as a visionary with the courage to purchase a property beset by activists.
“This is not a criticism of any of those parties, cities and citizens, because that’s how we continue to make the world sustainable and something we want to live in,” Vigon said. “But because of those obstacles this property traded for at least a third less, maybe half of, the price that it would’ve transacted if there was a clear and easy path to getting it entitled. I think [Pustilnikov] got a bargain. This wasn’t just the real estate land transaction of the century in the South Bay, but the deal of the century for the buyer.”
Pustilnikov said he will announce his plans for the site in October. Vigon said he could only speculate. In the meantime, when he looks at the property he sees a little Cuban boy who rode his bike from Lennox to fish at the Redondo Beach Pier and wondered what lay behind the gray walls of the fortress on Harbor Drive. ER
by Kevin Cody
Kevin is the publisher of Easy Reader and Beach. Share your news tips. 310 372-4611 ext. 110 or kevin[at]easyreadernews[dot]com