Stories in this week’s Orange County Business Journal
TOP STORIES
Newport Beach-based Pacific Investment Management Co. has sold all U.S. bonds from its $236.9 billion Pimco Total Return, the world’s largest mutual fund. The move is one of the strongest signals yet that Pimco co-Chief Investment Officer Bill Gross believes the bond rally of the past 30 years has run its course. Gross publicly questioned who will buy Treasuries once the Federal Reserve halts its latest round of bond purchases in June. He also has warned about U.S. deficit spending and the potential for inflation. The U.S. bond selloff by Pimco comes as the investment manager stages a push into stocks. Pimco manages $1.2 trillion in investments for pension funds, insurers, corporations and others (see related story, page 1).
Real estate owner Igor Olenicoff was the only one of nine Orange County entries to boost his ranking on Forbes’ 2011 list of the world’s billionaires. Olenicoff, founder and president of Newport Beach-based Olen Properties Corp., rose from No. 655 a year ago to No. 459 with a billion-dollar gain in Forbes’ estimate for him. The magazine put Olenicoff’s holdings at $2.5 billion, up from $1.5 billion last year. Donald Bren, chairman and owner of Irvine Company, is the highest ranking local on the list again at No. 64 with $12 billion. Jim Jannard of Foothill Ranch-based Oakley Inc. is No. 376 at $3 billion. David Sun and John Tu, owners of Fountain Valley-based Kingston Technology Co., rank No. 440 at an estimated $2.6 billion each. Pimco’s Gross ranked No. 564, Irvine-based Broadcom Corp. cofounder Henry Samueli came in at No. 595, Broadcom cofounder Henry Nicholas ranked No. 692, and businessman George Argyros was No. 736.
REAL ESTATE
Irvine city officials said $1.4 billion in anticipated state aid for the development of the Orange County Great Park can’t be diverted even if Gov. Jerry Brown’s plan to eliminate redevelopment agencies in the state is approved. The city’s redevelopment agency, which claims a portion of sales tax revenue in the area it covers, has an obligation to provide the funding under a development agreement signed in December, city officials said. The state Legislature is expected to vote on the proposal to eliminate the redevelopment agencies in coming days or weeks. Legal wrangling is likely to follow a vote in favor of Brown’s proposal.
Voters in San Clemente rejected a ballot measure that would have cleared the way for the 48,970-square-foot Playa Del Norte commercial development. Measure A was opposed by 58% of voters. The commercial project was proposed by Costa Mesa-based Lab Holdings.
HEALTHCARE
F. Michael Ball, president of Irvine drug maker Allergan Inc., is the new chief executive of Hospira Inc. in Lake Forest, Ill. Allergan said Chief Executive David Pyott will resume the president’s role, which he vacated in 2006 when Ball was elevated to that job. Hospira makes injectable drugs and devices that deliver drugs. Ball came to Allergan in 1995 and held several roles at the company, including executive vice president before assuming the president’s job.
EMPLOYMENT
Increasing gas prices and uncertainties about the state’s budget have employers in Orange County holding steady on hiring plans for the second quarter, according to Manpower Inc.’s Employment Outlook Survey. The survey found 10% of local companies expecting to hire during the period, down from 17% a year ago. Fewer companies are planning layoffs.
OTHER NEWS
The county’s population grew by 6% in the past decade to just more than 3 million, according to recently released data from the 2010 Census. It is now has the third-highest population of any California county, behind Los Angeles and San Diego.
A federal grand jury indicted a couple on charges of stealing $130 million from a number of banks by inflating the value of assets tied to their Anaheim-based Galleria USA Inc. in order to bolster credit lines for the defunct home decor importer. Thomas Chia Fu and Cheri L. Shyu were arrested last week at their Newport Coast home and face nine counts of bank fraud. The office of the Inspector General for the Troubled Asset Relief Program, the FBI and Secret Service conducted the investigation. Authorities contend that the couple inflated the value of accounts receivables by as much as 100 times and drew down credit lines, saddling banks with losses.
ECONOMIC INDICATOR
Mixed: Home equity in Orange County, where 17.7% of mortgages were higher than current values in the fourth quarter, according to Santa Ana-based CoreLogic Inc. The number of homes with negative equity rose by 0.8% from the prior quarter but fell by 12.6% from a year earlier.
