Nature's Trophy

June 22, 1992
June 22, 1992

Table of Contents
June 22, 1992

NBA Finals
Kirby Puckett
Brady Anderson
XXV Olympic Summer Games
Pebble Beach
Point After

Nature's Trophy

Pebble Beach, the glorious site of this week's U.S. Open, has always been an object of desire for the rich and powerful. Sadly, their greed has often taken precedence over golf

By William Oscar Johnson

I bought the property with 50 percent of my business mind and 50 percent of my golf mind because that was my dream.... I learned a very severe lesson from this transaction.
—MINORU ISUTANI, deposed owner of the Pebble Beach Co.

This is an article from the June 22, 1992 issue Original Layout

The Pebble Beach Golf links on California's Monterey Peninsula is the kind of god-blessed terrain that real estate mavens refer to as a "trophy property." And who could argue? It is known among the game's connoisseurs as "the Sistine Chapel of golf," and a painter who lived in the area during the early part of the century referred to it as "the most beautiful meeting of land and sea on the planet."

A trophy indeed, but, alas, one marred by dents and dulled by a bit of tarnish and the fingerprints of many men. For Pebble Beach has been won, lost, bought and sold pretty often, particularly in recent years. Certainly, there can be no ignoring the legendary spike marks left at Pebble Beach by the likes of Hogan, Palmer, Nicklaus and Watson since the course was carved out of the earth more than 70 years ago. But as a prime piece of real estate, the area's tumultuous history—filled as it is with heartless millionaires, high-minded environmentalists and piratical opportunists—makes for a lurid saga that is even more fascinating than its golf lore. Indeed, Pebble Beach's gallery of real estate entrepreneurs has left more than a few footprints on the place, too. Without the money, the visions and, of course, the profit motives of these moguls, the Sistine Chapel of American golf might now be a working sheep ranch.

Interestingly enough, the first owners of Pebble Beach, as well as its current owners, reflect vividly the global rearrangement of economic power that has occurred over the past century. In the beginning the land was owned by a consortium of California railroad barons; today, it is owned by the Japanese. In between, the trophy was held by an odd variety of people and companies, including: 1) Samuel F.B. Morse, an ex-Yale football captain, class of '07, who was the grandnephew and namesake of the inventor of the telegraph and who for 50 years ran the place as an arrogant but enlightened environmental emperor; 2) a Chicago sand-mining firm, which absolutely devastated a particularly gorgeous section of the peninsula and left it stripped to bedrock and rubble; 3) Twentieth Century Fox, which had no idea what to do with the place but bought it because it was wallowing in hundreds of millions of dollars from Star Wars and needed a place to park some of the cash; 4) Marvin Davis, the wily oil billionaire from Denver who treated the course as merely another property from which to wring profit; and 5) the above-quoted Isutani, the most pathetic of Pebble Beach's proprietors, a shadowy Japanese operator who began as a door-to-door salesman of frozen potatoes and encyclopedias, got into golf courses in his homeland and wound up losing his kimono in America—and nearly losing the 1992 U.S. Open for Pebble Beach.

Now, before we go further, let's describe exactly what the trophy consists of. In all, there are four golf courses (Pebble Beach, Spyglass Hill, Spanish Bay and Del Monte, the first course in the West, built in 1897); two hotels (The Lodge at Pebble Beach and The Inn at Spanish Bay); the famed 17-Mile Drive toll road ($6 per car); and the 5,300-acre Del Monte Forest, part of which can still be developed with new homes.

The original owners—railroad barons Leland Stanford, Mark Hopkins, Charles Crocker and Collis P. Huntington—formed a corporation, the Pacific Improvement Co., and paid about $5 an acre in 1880 for the undeveloped land ($35,000 total). They built the Hotel Del Monte and the Del Monte course, which had sand greens and more dirt than grass on its fairways. But the owners used the natural beauty of the place to lure San Francisco high society to the area by train. In 1915, Morse was hired by the railroad barons to run their resort, which was "something of an old ladies' home," as he saw it. But he spruced things up, emphasized dancing, smoking and drinking at the hotel, and he planted grass on the golf course, adding a new sprinkler system to keep it green. Morse also began to think about building a new course along the stunning Pebble Beach coast above Carmel Bay.

Now, Morse was no golfer, according to Frank D. (Sandy) Tatum, a San Francisco lawyer and former USGA president who once played a round with him. "His understanding of the game was minimal," says Tatum. "His occasional efforts to play were abysmal. Once, he hit a ball off the toe of his club on a right angle into the woods. After several strokes, some rebounding off trees, he hit an appalling shot that stuck in the bark of a tree, 20 feet off the ground. He was truly enraged, and he began cursing and pounding the tree trunk as if his club were an ax. He swore he would have the tree cut down the next day, but of course he didn't. However bad his golf was, Morse was an environmentalist years and years ahead of his time, and he had a very clear vision of how the aesthetic values of a golf course could work to save the land and preserve the natural beauty of a wonderful coastline."

Much of the land along the ocean cliffs, which would become the trademark terrain for Pebble Beach, had already been laid out for subdivision development by Jack Neville, a real estate salesman for Morse's company. In 1916, Morse summarily dumped the plan to build houses on the cliffs and assigned Neville to design the golf course instead. Neville was a great golfer, ultimately a five-time California State Amateur champion, but he had no experience in golf course architecture. He brought in Douglas Grant, another superb golfer who was a student of course architecture. The two of them walked the land for weeks and finally came up with a figure-eight design that followed the land's natural contours with a maximum number of holes laid out along the water.

At about the time Morse began seeing his golfing monument emerge from the rugged coastal terrain, the owners of Pacific Improvement decided it was time to sell everything. To Morse's chagrin, they refused to lend him the money to buy it. Morse had little wealth of his own, so he found a partner—a San Francisco banker and philanthropist named Herbert Fleishhacker. In 1919 they purchased it all for a little more than $1.3 million and renamed their acquisition the Del Monte Properties Co.

That same year the Pebble Beach Golf Links was officially opened. It was a heartbreaker in its natural beauty, but it still required some tinkering. The most spectacular improvement was made by H. Chandler Egan, a two-time National Amateur champion, who lengthened the glorious number 18 from a merely brilliant 379-yard par-4 to a 542-yard par-5 that was simply the best finishing hole on earth. Egan began his correction in 1927 in preparation for what was to be Pebble Beach's debut as a major league golf course—the 1929 National Amateur Championship. "The course was well known among the rich and literate who came West from the East as well as among San Francisco sophisticates," says Robert Trent Jones Jr., the golf architect. "But Pebble Beach was still a secret to the rest of the world. Morse wanted the National Amateur in the worst way, but the USGA had never gone west of St. Louis."

The barriers were broken by a rich, flamboyant San Franciscan, Roger D. Lapham Sr., a superb golfer, a brilliant bridge player and a member of the USGA executive committee. He persuaded the USGA to go west in 1929 and lured the British great of the day, Cyril Tolley, to Pebble Beach. "The very force of [Lapham's] personality changed the whole historical character of Pebble Beach," says Tatum. "He was solely responsible for its reputation spreading around the world."

Of course, Pebble's reputation was not hurt by the fact that Bobby Jones, the reigning Amateur and Open champion (not related to the architect), crossed the country to play in the tournament. Surprisingly, he lost in the very first round to Johnny Goodman, an impoverished alternate from Omaha. Pebble Beach probably reaped even more publicity because of the romantic beggar-beats-king nature of Jones's defeat, but Morse was chagrined by the unexpected turn of events, so he tried to get Jones to play a few casual rounds at Pebble Beach after his elimination. Jones, the Georgia gentleman, said that that would not be good form. Instead he played a round with Lapham on the area's fresh new jewel, Cypress Point, which had just been finished and was not yet officially open. Jones was overwhelmed by the course, saying it was even better than Pebble Beach. He played Cypress several days in a row, a few times with its designer, Alister MacKenzie, a remarkable Scottish architect who mastered the art of camouflage during the Boer War and brought a knack for illusion to golf course design. Ultimately, Jones invited MacKenzie to join him in Georgia to help build a new golf course. It became known as Augusta National.

But even as golf history was being written at Pebble Beach, no one ever forgot that the real name of the game was selling land—at least Morse didn't. In the company's 1920 annual report, he had written quite bluntly, "The links were constructed primarily to exploit the real estate." The plan worked beautifully for a while. As Golf Digest reported recently: "By the late 1920s, Morse had amassed resort profits of $1 million, with land sales of $4 million. Then the Depression destroyed almost everything. As 85 per cent of America's hotels went bankrupt, Morse's resorts lost money, and land sales crawled." But the company survived, thanks to a hugely profitable sand-mining operation in Spanish Bay, which Morse had begun in the late 1920s. Conservationist or not, Morse gladly took the cash that the sand produced, even though the mining ravaged the dunes in one section of the peninsula.

Morse lived until 1969, running the place to the end with an imperious grip. Bing Crosby, whose annual "clambake" pro-am tournament was first held at Pebble in 1947, once said with more wisdom than any crooner should be expected to display: "Without Sam Morse, there would be no Pebble Beach. It would all be Coney Island." Or, more likely these days, Orlando.

After Morse's death, the trophy was passed to the Wedron Silica Co., which owned sand mines at Pebble Beach and in live other states. In 1979, Twentieth Century Fox purchased the company—then known as the Pebble Beach Corporation—in a deal worth $72 million. Of the acquisition, Tom Oliver, 55, president of Pebble Beach, recalls, "The studio simply had to use that cash—somewhere, anywhere. They could as well have bought a bunch of meat-packing plants or a few buildings in downtown Chicago, but they bought Pebble Beach because it was a good price. There was a tremendous furor in the area over how we were about to be inundated in Hollywood glitz," says Oliver. "Someone took out an ad in the local paper, warning about the sin and degradation on the way up from the south, about how there would be neon signs and dancing girls everywhere. But Twentieth Century had no plan to invade us. They really had no idea what to do with us. We were never a priority with them."

The studio's ownership of Pebble Beach was benign and brief. In 1981, Davis, the billionaire oil wildcatter, operating with partners, laid out $722 million to buy the movie studio and everything it owned—which included, of course, the Pebble Beach properties, as well as the Aspen Ski Corp. and the 100-acre movie lot in Century City. Davis sold off just about everything else at a profit of perhaps $300 million. Pebble Beach was estimated to be worth $150 million when Davis bought it.

Four years later the value exceeded $300 million. The completion in 1987 of The Inn at Spanish Bay and its accompanying golf course, at a cost of $150 million, added immensely to the already swelling value of the property. As the '80s drew to a close, interest in Pebble Beach grew to global proportions. One of Davis's partners, Chicago developer Tom Klutznick, says, "From 1988 on, hardly a day went by without an offer to buy Pebble Beach. They came from Americans, Japanese, Europeans." By then, Klutznick figured that the value of the property had increased to between $700 million and $1 billion. At one point Tatum represented a group that was interested in making a deal. Myron (Micky) Miller, another Davis partner, told them, "The price is somewhere north of $900 million." The group found the number "completely unrealistic," said Tatum. Indeed, neutral real estate experts estimated the reasonable market price to be about $550 million.

Left without a buyer at the price he had set, Davis began a new policy at Pebble Beach: benign neglect. Jones, the golf architect, says, "It was a period of turmoil. The golf courses were let go. The course-maintenance people were leaving. The money that was needed to run the place dried up." Jack Nicklaus says of his favorite course, "It was very poorly maintained. You could reach under the lip of a bunker 18 inches before you got to sand." Tatum told Golf Digest, "It was clear that the place was being squeezed, in the process of improving cash flow. The golf courses were manifestly deteriorating, especially Pebble Beach."

Davis protests, saying, "That is absolutely not true. We spent a lot of money, over $250 million, at Pebble Beach. We fixed the courses up. They were not in great shape when we bought it. We were limited to what we could do because of the drought. We ran it the best way we could with the weather conditions. Of course, anyone likes to have good cash flow. In the big picture of my assets, Pebble Beach was just a pimple."

But to other moguls it was still an alluring trophy. In September 1990, Isutani paid a staggering $841 million for Marvin Davis's "pimple."

Interestingly enough, the sale of the local crown jewel to a Japanese buyer, at a time when the nation had become particularly sensitive to Japan's frenzied spending spree on prestigious U.S. properties, hardly triggered any response among the residents of the Monterey Peninsula, many of whom are retired military men with long memories of World War II. Oliver says, "There was less uproar over Japanese ownership than there was when Twentieth Century Fox had bought it and everyone thought the movie people were going to invade us." In Japan, the response was even more muted. I high Canaway, a Tokyo-based land development analyst for a British securities firm, said, "It was a much bigger story in the U.S. That's because Pebble Beach was dwarfed by other Japanese real estate purchases abroad."

Indeed, the desire to buy trophy real estate in the U.S. at inflated prices was spreading at the time like a plague through Japanese business circles. In the summer of 1990, in fact, there were at least four other parties dickering for Pebble Beach, one of whom, Davis says, offered $50 million more than Isutani had agreed to pay. But Davis stuck by his handshake deal with Isutani. Kekichi Honda, president of the Bank of Tokyo Land and Development Research Institute, says, "I call it the Marilyn Monroe syndrome: Every Japanese—and American—man would give anything to have her because of her glamour. Some are willing to pay any price. It's the prestige factor, mainly, even though they do want a return on their investment."

Any trophy that combines the qualities of Marilyn Monroe with those of the Sistine Chapel would seem to be worth just about any price. But, alas, Isutani had overpaid—grossly, as it turned out. Even as he was making the deal, the Japanese stock market was in a steep fall, interest rates were rising, a recession was moving relentlessly around the globe, a major stock scandal had sent a paralyzing chill through the Japanese business world, and the crisis in the Persian Gulf was heading rapidly toward war. "Isutani was a textbook case of doing everything wrong at the worst possible time," said Oliver.

Canaway, the Tokyo land expert, agrees: "Isutani charged out and tried to ride the economic bubble as it was expanding, but the moment he got on, it blew up in his face."

However, Isutani did have a plan that might have rescued him even as the bubble was exploding. He would sell memberships, which would guarantee tee time reservations, at very high prices to anyone who could afford them. This is a common practice in Japan, where wealthy businessmen routinely pay more than $1 million for guaranteed tee times for life at their favorite golf course. Pebble Beach had always been a public course, albeit one with greens fees of $150 per round for resort guests, $200 per round to the general public on a first-come, first-reserved basis. Such fees don't make the place accessible to the masses, but for the kind of once-in-a-lifetime thrill that most golfers get from playing there, it is well worth the money. Isutani's plan would have reserved two hours of prime tee times each morning, along with as many as 60 hotel rooms, for members of a proposed Pebble Beach National Club. It would have also reserved the last full hour of tee times each day to be held open for the general public, which was more guaranteed public time than was then available.

Isutani's original intended price tag for the memberships was never formally declared. But in December 1990, The Herald in Monterey reported that the Yukan Fuji, a Tokyo daily, had quoted Isutani as saying of Pebble Beach, "I could hold on to memberships...and easily sell each for 100 million yen." At the time that figure equaled $770,000. And in March 1991 the Osaka edition of Asahi, a Japanese daily, reported that Isutani planned to charge $740,000 apiece for 760 memberships. Neither of these figures was ever verified by Isutani, or anyone representing him, and Pebble Beach officials later told local government representatives that the company would more likely sell 1,500 memberships at a price of $150,000 each.

In order to activate the new "public reservations policy," as it was called—rather misleadingly, it turned out—several San Francisco lawyers representing Isutani had to seek approval from both the Monterey County Board of Supervisors and the California Coastal Commission, a watchdog agency charged with regulating land use up and down the 1,100-mile state coast.

In truth, the documents filed on behalf of Isutani were somewhat murky as to the company's ultimate goal. Still, in July 1991, the board of supervisors met and okayed the plan by a 4-to-1 vote. A longtime local environmentalist named Carl Larson, 69, a tall, bewhiskered retired marketing professor and wholesale lumber trader, had decided only at the last minute to attend the board meeting. He read a hurriedly prepared statement that accused the new owner of pursuing "the privatization of a public golf course." It would have been a violation of land-use restrictions that Pebble Beach had promised in previous documents filed with the Coastal Commission to keep the coast open to the public. (The Coastal Act of 1976 protects existing public access to the coast and requires that any new coastal development retain that accessibility.) Larson's was the only dissident voice at the sparsely attended meeting, but his objection became the catalyst that eventually thwarted Isutani's plan. "I guess I put my finger in the dike when no one else knew there was a leak," Larson says.

Diane Landry, a lawyer for the Coastal Commission, was also troubled by Isutani's plan. "It had bothered me from the start, but I couldn't figure out why," she says. "I read it, and I read it. I drew diagrams, made charts, and then I finally figured it out. The plan, played out to its logical end, meant almost total privatization of all the golf courses in the Pebble Beach company. We work with developers all the time who do lots and lots of obfuscation, misdirection, deflection and other tricky techniques so they get what they want without actually saying it. This was much more clever than most."

What Landry discovered was that if the "public reservations policy" was approved, all four of the courses under Isutani's ownership could eventually become subject to a "private" reservations policy. She envisioned this possible scenario: If 60 club members got 60 hotel rooms every day, they could reserve 60 tee times on any of the four courses. Since only 10 members' tee times were to be made available each day at the Pebble Beach course, the other 50 club members could reserve start times at one of the other three courses—Spyglass Hill, Del Monte or Spanish Bay. Altogether, on the average there are 96 daily starting times at those three courses, and if 50 were taken by club members, it would leave 46 available tee times for the general public, right? Not necessarily. If club members decided to reserve more than one tee time per day—say, at Spyglass in the morning and Spanish Bay in the afternoon—then all start times at the other three courses could conceivably be taken by club members, leaving the public with no access to them at all. "With members properly organized with early phone calls and staff cooperation, the whole block of tee time reservations could easily be filled with members only," says Landry. "And could you ever monitor it or control it? Good luck!"

When Landry presented her privatization scenario to Isutani's representatives, they all said, "No, no, we would never do that." But as Landry astutely notes, "Not one of them ever said that my theory was wrong and that my scenario couldn't happen. It was very, very clever."

Once Larson and Landry had sounded the alarm, the public responded. J.D. Cook, a Los Angeles expert on Pacific rim real estate deals, says, "The locals became outraged. They had these visions that Japanese golfers who had overpaid horribly for memberships would be swarming onto the course and they'd never get to play there again."

Honda, the Tokyo real estate expert, said that Isutani & Co. were "naive to think they could go in and run the course like it is done here in Japan. In Japan the government and business work hand in hand. In America the government is the watchdog over business."

The ultimate watchdog turned out to be the Coastal Commission. In a meeting in October 1991 the group voted 10 to 1 to reject the Isutani membership concept. Isutani's representatives angrily suggested that this was just another form of Japan-bashing, that Isutani had been shot down because of unsubstantiated charges about his character. Landry said coldly, "The issue was never a matter of character, it was never race. It was privatization. Marvin Davis would not have had an easier time than Mr. Isutani."

Once the membership plan disappeared, Isutani was wounded beyond recovery. He needed the money that memberships would have generated to begin paying off his enormous debt, having borrowed almost all of the $841 million Pebble Beach purchase price. From the beginning he had put the deal together through a labyrinthine corporate and financial structure. Indeed, his name never appeared on any paper connected with the actual purchase of Pebble Beach until he applied for a California State liquor license in late 1990.

He remained a mystery during the entire 18 months he owned the property. He was known to have visited the area no more than three times. He never tried to introduce himself or explain himself to any local politicians, civic leaders or even to any golfers. He refused to speak with American journalists until the very end of his reign over Pebble Beach, and he refused to respond to SI's repeated attempts to contact him about this story. No photograph of the man was even available—except for a fuzzy image reproduced from an NBC program, Exposè, which aired in June 1991 and strongly implied that Isutani was connected to the yakuza, Japan's mafia. Actually, Isutani's yakuza ties were never substantiated, and a veteran Tokyo police reporter said recently, "If there was even a hint of legitimate proof, our scandal sheets would be all over the story."

That is not to say the man is without flaws. Isutani had long been suspected of participating in a kind of golfing fraud that had become increasingly troublesome in Japan: overselling memberships at new golf courses. On more than one occasion members of two of his clubs near Tokyo have accused Isutani of selling 10 times the number of memberships promised, making it impossible to reserve weekend tee times even months in advance. Tokyo police sources say Isutani is under investigation for overselling memberships at two other courses, in the prefects of Saitama and Tochigi. He is also suspected of being connected to another oversubscription scandal in which Ken Mizuno, president of Ken International Inc., a Tokyo-based real estate firm, was charged with fraud and tax evasion for selling 52,000 memberships to a club that was supposed to have 3,000 members. (Mizuno is currently awaiting trial.) Isutani has never been charged in any of these cases. However, the bottom line is this: Isutani was not considered a "first-tier businessman" by the establishment. "He has a shady reputation," says Canaway, the British land development expert in Tokyo. "A sort of dodgy character is how he's viewed here."

Whatever else he might be, Isutani is an avid golfer who at the age of 15 got his passion for the game from an American soldier known to him only as Jimmy. One of the first things he did after purchasing Pebble Beach was to contact Nicklaus and ask him if he would redesign the Pebble Beach Golf Links for the 1992 Open. Stunned by what Nicklaus considered golf blasphemy, the four-time Open champion replied, "Whoa! Nobody redesigns Pebble Beach! It's an American shrine!" Isutani retreated from the idea of a full redesign and hired Nicklaus as a consultant to sharpen up the course and repair the damage that occurred under Davis's management. "We wanted to restore Pebble Beach to top condition while keeping its rustic and unkempt look," Nicklaus said. "We looked at a lot of old pictures and tried to re-create what was there from earlier days."

But even as the course got greener, Isutani fell deeper into the red. On Nov. 27, 1991, the Coastal Commission rejected another membership plan, saying it was even more restrictive than the first one. On Dec. 11, a Nevada company that was part of Isutani's corporate structure went bankrupt. And on Dec. 12, the Monterey County assessor declared the Pebble Beach Co. delinquent in $3 million of property taxes.

That's when an alarm sounded over the plight of the U.S. Open, which was still six months away. Would a bankrupt Pebble Beach Co. be able to serve as host? Grant Spaeth, who was then president of the USGA, recalls, "The downside at the time was that we might have to move [the Open]. In fact, we had a couple of other golf courses available."

Late in December, Isutani gave his first—and, so far, his only—extensive interview to an American journalist, Thorn Calandra of the San Francisco Examiner. Basically, Isutani saw himself as a victim of a tightened money supply in Japan ("Interest rates went from two percent to eight percent in one year," he said); of plunging property values in Japan, down 30%, which greatly reduced the value of his 17 golf courses; of the xenophobic U.S. media, which cast him as a swindler and a mobster; and of Davis, whom Isutani claimed misled him concerning the private membership plan. "This was the first topic on which I consulted Marvin Davis," Isutani was quoted as saying. "He assured us that we would not encounter any objections from the local community and authorities." Davis denies this: "We gave no assurance or guarantees to Mr. Isutani. We didn't know which way the authorities would go regarding private memberships."

When Isutani was asked if he thought he would be forced to sell Pebble Beach, he said jauntily, "Perhaps I should cite your own Mark Twain: 'Rumors of my death have been greatly exaggerated.' "

In truth, his demise as the owner of Pebble Beach was a fait accompli. Japan's business establishment had already begun to move with inexorable, if invisible, force to topple the maverick Isutani. He had become much more than a passing embarrassment to the image-conscious Japanese. He now was also perceived as a serious threat to already strained relations between the U.S. and Japan. Even Isutani admitted as much in the Examiner interview, saying, "If anything happens to the U.S. Open, it would be a disgrace to the Japanese."

Thus, after a series of high-powered, if arcane, moves deep in the bank vaults of Tokyo, Japan's largest issuer of VISA credit cards, the Sumitomo Credit Service Co., Ltd., and the Taiheiyo Club, Inc., became the new owners of Pebble Beach in January. The price was about $574 million. Even more important, they became the new keepers and protectors of the U.S. Open. As for Isutani, he was out of not only Pebble Beach but also some $267 million.

The new front man at Pebble Beach is a gentle, pleasant, golf-playing executive named Masatsugu Takabayashi. He spent 28 years as a Sumitomo banker. Then in 1986, at the bank chairman's request, he became president of Taiheiyo, which owns some of Japan's prime golf courses. Takabayashi, 58, is now also the president of The Lone Cypress Co., the corporation formed by the new owners of Pebble Beach. The company was given its brand-new ultra-California name by Hill and Knowlton, the famed American public relations firm, which has handled such controversial clients as the Church of Scientology. It has now been hired by Lone Cypress to help the new managers play the very delicate role of Japanese businessmen who have just bought a beloved American treasure.

One bit of solid advice Hill and Knowlton provided the new owners was that unlike the unseen Isutani they should be as publicly visible, voluble and available to the media as they would be if they were running for Monterey County clerk. Thus, Takabayashi appeared at The Lodge one bright afternoon late in May for a pleasant interview. He was accompanied by Daisuke Saji, 45, a wry, articulate Sumitomo officer who speaks superb English and on this occasion translated for Takabayashi, and by Paul C. Leach, a genial San Francisco investment banker who was the key U.S. adviser in Sumitomo and Taiheiyo's purchase. Takabayashi was asked what he thought of Isutani, and after a long pause, he replied through Saji. "I have never met Mr. Isutani. He was not a first-tier Japanese businessman. He was a fixer. He was, ah, notorious." Notorious? "Very notorious. Maybe not yakuza, though."

Any plan to sell memberships? Takabayashi hesitated not an instant: "That is dead. Gone with Isutani."

When did Sumitomo and Taiheiyo decide that Isutani had to be moved out? And why? Leach said, "We arrived on the scene in December of '91. The Pebble Beach Co. and Isutani were on the rocks.... If Isutani continued to own it, the company would be bankrupt before the time of the U.S. Open. The Open essentially forced the move. Pebble Beach had to have a quality owner before the Open."

Saji continued: "It was in December that the bank approached Mr. Takabayashi as the perfect buyer. He was the number one golf course builder in Japan, an ex-Sumitomo officer, a man of ultimate integrity. We had decided that the image of our bank and of Japan would have been devastated if the Open were hurt in any way."

Takabayashi explained the mix of patriotism and profit motive behind the deal: "Mr. Isutani's errors made a very bad image for Japan and Japanese business among the American people. It was very bad for the two nations. I wanted to repair those wounds. In that sense the business opportunity was extraordinarily good: If I made the acquisition, it could cure the bad image of Japanese in America and enhance relationships between the U.S. and my country."

And what of the future? Will Pebble Beach remain solely owned by Sumitomo and Taiheiyo? Saji replied, "We would like to enhance American investment in Pebble Beach. A partnership with The Lone Cypress Co. could be entertained. Perhaps a joint board of Americans and Japanese. We welcome further capital investment as long as it takes us in the correct direction. But I must quickly add, we are not here only to squeeze money out of this jewel, we are here to polish it."

Which is what trophies need, too—polish. It has been a long, twisted trail of ownership for this splendid old prize, but it seems to have fallen into good hands for the moment, at least. The Open next week may not be as melodramatic as Nicklaus's third victory in 1972 or Tom Watson's chip-shot triumph in 1982, but god knows it will be beautiful to see. The most beautiful meeting of land and sea on the planet—and in all of golf.

PHOTOJOHN ZIMMERMANPHOTOTONY ROBERTSThe scenery once lured the elite to 17-Mile Drive (opposite); today Pebble's majestic number 8 is open to all.PHOTOTHE PAT HATHAWAY COLLECTION[See caption above.]PHOTOJOHN ZIMMERMANAn errant shot at number 7 could get wet, unlike Crosby (opposite), who hosted his annual "clambake" at Pebble.PHOTOTHE PAT HATHAWAY COLLECTION[See caption above.]PHOTODOST AND EVANSSince its spartan beginnings (opposite), The Lodge has grown to become a noble backdrop to Pebble's 18th hole.PHOTOPEBBLE BEACH COMPANY ARCHIVES[See caption above.]PHOTOTHE WILLIAM C. BROOKS COLLECTIONYalie Morse (second from left) hired Neville (top) to design the coastal course.PHOTOPEBBLE BEACH COMPANY ARCHIVES[See caption above.]TWO PHOTOSORVILLE MEYERS/THE MONTEREY COUNTY HERALDUnlike Isutani (bottom), Takabayashi (top, right) has been a presence at Pebble.PHOTOTONY ROBERTSOpen drama at Pebble: Watson's chip (top) in '82 and Nicklaus's finish in '72.PHOTOJAMES DRAKE[See caption above.]PHOTOBILL PAULLUSLarson's voice for Pebble's natural wonders initiated Isutani's fall.PHOTOJOHN ZIMMERMAN[See caption above.]PHOTOORVILLE MEYERS THE MONTEREY COUNTY HERALDAfter 112 often stormy years, Pebble's future finally seems bright.