KEEPING UP THE PRESIDENTIAL PAYMENTS

For all the power and perquisites of the U.S. presidency, some of the problems of ordinary citizens necessarily follow a man into the White House. Like living within one's income, and keeping up the payments on the mortgage.

The latter can be troublesome, particularly when the President is Richard Nixon, for whom the White House is not entirely a home. He is, by his own testimony, a "saltwater man," and in a relatively short span of time has picked up two seaside abodes in Florida, another in California, as well as retaining his leasehold on the old family manse in Whittier, Calif. While none of the four dwellings is perhaps fit for a king, the three recent acquisitions are certainly suitable to the style of a First Family, with all that that entails. How in the world does Nixon meet those monthly mortgage bills on a salary of only $200,000 a year?

Slightly Surrealistic. Well, it helps to have been a Wall Street lawyer--in more ways than one. Consider the ledgerdemain of the San Clemente spread. The price for the estate of 21 acres, including the large, Spanish-style villa now known familiarly as White House West, was $1.4 million. The terms were $400,000 down and $100,000 per year, plus 7 1/2% interest per year on the initial outstanding debt of $1,000,000. The sale called for the principal to be paid off within five years. Normally, such an undertaking would require prodigious amounts of cash: annual payments of $175,000 for five years and then a liquidating wallop payout of $500,000.

Nixon, however, elected to purchase with his own capital only the five seaside acres of the estate and the house. This gives him only one-fifth of the property, and only one-fifth of the down payment and maintenance charges to cope with personally. His portion of the down payment was $80,000, the principal is $20,000 annually and the interest is $15,000 per year. In addition, the President exercised an option to buy the remaining four-fifths of the surrounding grounds. This was done for him by a trustee, the Title Insurance and Trust Co. of Los Angeles. The trustee pays for the remaining four-fifths with $1,000,000 that Nixon borrowed from the Cotton Estate, previous owners of the spread. Out of this money comes the necessary $320,000 down payment, as well as the $80,000 for the principal payment and $60,000 in interest per year.

This arrangement seems slightly surrealistic, but it is cheaper than most available mortgages would be. In effect, the President is paying off the additional land at today's prices, holding it and gambling on a continuation of the upward trend in real estate prices in the San Clemente area. Within the five-year period, the President will sell all but his five acres and house. If his gamble pays off, he will retire the debt on the borrowed money and perhaps even make a profit. Just to whom the President will sell is not known. It could be a "compatible" buyer--perhaps Nixon's wealthy, longtime friend "Bebe" Rebozo--or it could be the Nixon Foundation, which might build a presidential library and museum on the land, though the President's California home town of Whittier would like that honor.

In the meanwhile, Nixon is able to enjoy the luxury of his San Clemente estate, while paying only a fraction of what it would cost him to buy outright. To make it even more pleasant, the President is getting an estimated $75,000 golf course free. Local firms are building the small course (four greens, seven tees just behind the villa's swimming pool) at their own expense. At the same time, Nixon is adding his own distinctive touches to enhance the comforts of the house. Recent visitors noticed a new bulletproof glass wall beside the swimming pool and a sound system to soothe the presidential nerves with the piped-in music of Mantovani and Kostelanetz. And he has already had some luck: his post-purchase survey of the land showed that it was not 21 but 26 acres in extent--a five-acre bonanza that Nixon's advisers estimate could eventually be worth as much as $300,000.

The President's other mortgage obligations are less Zeckendorfian. The two houses he bought on Bay Lane in Key Biscayne formed a $252,800 package. The house at 516 Bay Lane has a mortgage of $100,000, payable in 25 years at 7 1/2% interest. The second house, at 500 Bay Lane, has two mortgages totaling almost $80,000, each for ten years at 6%. The presidential compound formed by the two houses is flanked by Nixon's friends. The ubiquitous Rebozo owns a house adjacent to the President's property. The house next to Rebozo's was bought early this year by Robert Abplanalp, a strong Nixon supporter during the 1968 presidential campaign, who owns Grand Cay in the Bahamas, a retreat the President favors. Nixon's third house, in Whittier, Calif., where his mother once lived, is a potential profitmaker. The house and lot are valued at $75,000--the mortgage is for $54,400 --but the area has just been rezoned for commercial use, which should enhance its worth considerably.

Taxing Experience. Despite the many residences, the presidential purse does not seem too strained. When Nixon sold his Fifth Avenue apartment in New York City last May, he received $326,000--twice what he paid for it in 1963. In April, the President sold 185,891 shares he had held in Fisher's Island, Inc., a land-development firm near Miami. Selling at $2 a share, the President doubled his original investment. With his White House salary, and what he saved from the fat years as a corporate attorney in New York, Richard Nixon is reasonably well off. And, of course, all the interest he pays on his holdings is deductible from his personal income taxes. His only real estate problem seems to be that, whenever the Nixons move into a neighborhood, they drive property values up. In the ten months that Nixon has owned the two houses in Key Biscayne, they have both reassessed upward by $52,000--a taxing experience, as every homeowner knows.

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