According to sources familiar with the situation, Colony Capital, the organization that owns a primary stake in the ownership of the Santa Ynez property, has decided to sell it.
"Colony Capital has the legal right to sell the property to pay down the debt they are owed from the loan, interest, management fee and maintenance costs," a source said.
The ranch property itself was co-owned by Jackson and Colony Capital, which bought out Jackson's $23 million mortgage just as the property was about to go into foreclosure. The 2,500-acre ranch in the Santa Ynez Valley area of Santa Barbara County has an assessed value of $27 million.
On Thursday, officials with the Jackson estate issued a statement to fans:
"We are saddened at the prospect of the sale of Neverland which, under the agreement negotiated during Michael's lifetime, Colony has the right to sell. The estate will maintain Michael's family home in Encino, including its iconic recording studio there.”
The company said they’ll “continue to build upon Michael's legacy as an artistic genius and humanitarian through his music and new projects such as the Michael Jackson ONE show in Las Vegas.
“We hope and trust that any new owners of Neverland will respect the historical importance and special nature of this wonderful property. Michael's memory lives on in the hearts of his fans worldwide.
Officials stressed to Jackson’s fans that “although the estate has no right to stop or obstruct the sale,” they explored “a number of potential options for Neverland … but zoning, financial and land use restrictions limited the alternatives and ultimately Colony made the decision to sell."
Indeed, our sources revealed “efforts were made to keep Neverland, and Michael's estate tried to make it happen. However, they were unable to come to an agreement."
Neverland Ranch sits on 3,000 acres, and was Jackson's home from 1988 until the infamous molestation trial in Santa Maria in 2004.
During a raid by cops executing a search warrant during the investigation, Neverland was in a state of utter chaos; after Jackson was acquitted on the charges, he had a party for fans to thank them for their support during the trial, and on the advice of his lawyer, Tom Mesereau, moved out of his beloved home.
The price tag for Neverland could fetch nearly $60 million, insiders tell Radar.