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The funds that this financial group could invest on Reagan's behalf jumped dramatically in 1966. Just after he was elected Governor of California in that year, he sold most of his Malibu Canyon ranch to Twentieth Century-Fox Studios, which owned 2,500 acres of adjacent land, for $1.9 million. Staggering profits in the California land boom have since become commonplace, but even by California standards Reagan's return on his original $65,000 investment in Yearling Row was astounding. A Los Angeles County assessment appeals board eventually set a market value of $1,459,000 on the 236 acres that Reagan had sold the film studio.
Why Twentieth Century-Fox paid about $450,000 above market value for Yearling Row remains a mystery. While the timing of the purchase may have seemed suspicious, coming just after Reagan's election as Governor, there is no evidence that he ever granted the studio any favors. He did, however, name Harry Sokolov, a Twentieth Century-Fox executive, chairman of the California state parks and recreation board.
Eight years later, Twentieth Century-Fox sold its entire Malibu Canyon ranch, including both its own 2,500 acres plus the 236 acres bought from Reagan, to the State of California for $4.5 million as park land. In this deal, Twentieth Century-Fox received much less than it had paid Reagan on a per acre basis—about $1,800 vs. $8,000. However, it leased back the land from the state as a filming site for a mere $500 a month. The charges gradually climbed, and Fox now has to pay $700 a day whenever it uses the site. Reagan was not directly involved in the leasing deal.
Reagan's new financial counselors advised him to put most of the funds from the sale of the ranch into the Ronald Reagan Trust, a blind trust. Such a device has been used by many officials to avoid possible conflicts of interest (among them: Dwight Eisenhower, Lyndon Johnson, Jimmy Carter and Edward Kennedy). A blind trust's exact holdings are known only to the trustees, while the person who creates the trust merely receives reports about how much it is making or losing. Reagan's trust ceased being "blind" when he left office, but reverted to that original status when he became a candidate for national office in 1975 and again in 1979.
According to Trustee William French Smith, part of Reagan's money was parked in such safe havens as tax exempt bonds and U.S. Treasury notes. Greater risk was taken with the sums that went into real estate investment trusts, commonly known as REITs, and tax shelters such as cattle breeding operations. In general, REITs had a roller coaster performance during most of the 1970s and lost quite a bit of money for many investors, as did a large number of cattle breeding tax shelters.