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Don Koll has left Koll Development to form another firm

Donald M. Koll, one of Orange County’s most prominent developers, has left the company that bears his name to form a new venture.

Koll, 67, is launching the new company with two other Koll Development Co. colleagues and a prominent local commercial broker.

Sources, who asked not to be identified, said the move leaves NorthStar Capital Investment Co. in unquestioned control of Koll Development. NorthStar, a New York-based investment firm, financed the Don Koll-led buyout of Koll Development in 1998.

Koll Development recently reported having 49 current projects, about half of them in California, with a total value of about $1 billion. Koll Development recently completed an eight-story office building, 1900 Main St., next to the Sports Club Irvine, and has an adjacent eight-story tower, 1901 Main St., under construction.

According to sources, Don Koll formed his new company about a month ago as a limited liability corporation with himself and three others as the principals: Jerry Yahr, who was president, the No. 2 operating post, at Koll Development; Bryan McGowan, who was Koll Development’s chief financial officer; and Alan Airth, who had been managing director of Grubb & Ellis’ Newport Beach office.

Koll Development was owned by Don Koll, along with key employees and NorthStar. Koll Development would typically develop projects for a fee and a participation in profits both for itself and for key employees. NorthStar would sometimes make a separate, equity investment in those projects.

Don Koll reportedly is busy scouting out land and buildings for the new venture.

“He said he feels like a kid again,” said one colleague.

A source said that Don Koll negotiated the right to call the new firm The Koll Company, a name long associated with the Newport Beach builder. Interestingly, it is that name,not Koll Development,that graces the office building at 4343 Von Karman Ave., in Koll Center Newport, that houses the corporate offices of Koll Development.

Don Koll is a major partner in that building, but sources said that, at least for now, both Koll Development and Don Koll’s new venture will share space in the building. Also remaining in the building will be other Don Koll-related entities that were not part of the NorthStar relationship: the real estate investment fund Koll Bren Schreiber; Koll International, which includes the Mexican projects; and the building arm, Koll Construction.

Steve Van Amburgh, Koll Development’s CEO, works out of Dallas.

Don Koll formed his new company just weeks after Koll Development announced in late March that he was relinquishing the CEO duties to Van Amburgh, head of the company’s Dallas office. The announcement said that Don Koll was retaining the title of chairman of Koll Development. But now a source said Don Koll has relinquished that title, too.

Don Koll declined a request to be interviewed for this story.

Van Amburgh described the separation as amicable and downplayed its significance. He said Don Koll would “pursue other things with Jerry Yahr, his son-in-law.”

Rumors have swirled for months about differences between NorthStar and officials of Koll Development. The Business Journal reported in October on industry speculation that NorthStar had forced the sales of the 1900 Main St. building and of Koll Development’s stake in the former Koll Center South office project in Irvine, and that NorthStar might withdraw funding from Koll Development because it was unhappy with the return on its investment in the Newport Beach-based company.

At the time, officials of both Koll Development and NorthStar Capital denied there was any tension in the relationship.

When Van Amburgh was named CEO in March, he described it as part of a strategic shift by Koll Development away from the speculative building that has characterized Don Koll’s operations. Given a forecast of a slower economy in the months ahead, Van Amburgh said, the company wanted to focus more on build-to-suit projects.

Since founding his development company in 1962, Don Koll has built more than 72 million square feet of office, industrial, retail and entertainment space. n

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