Donald Bren
Owner, chairman, The Irvine Company
Estimated worth: $8 billion
Just about everything Don Bren owns rose in value in the past year. And he owns a lot,land, apartments, shopping centers, office buildings, hotels, golf courses, even marinas.
The big gains came by way of the still-hot housing market and the resurgent office sector.
Bren has been adding to his holdings. In May, the Irvine Co. paid an estimated $140 million for the Irvine campus of Verizon Wireless. It’s said to be bidding on downtown San Diego high-rises and a San Jose technology campus set to become housing.
We’re estimating Bren’s wealth to be about 5% higher than last year at $8 billion, in part due to rising values and better accounting on our part. Even so, we still feel our number is conservative. After running the numbers, an aggressive estimate could peg Bren at $10 billion or more.
We came up with our number by putting values on each segment of Bren’s holdings. We generally assessed his assets above the county’s median prices, but not much more. Then we factored in development costs and debt, the latter our sources tell us is lower than that of other real estate owners.
The value of Bren’s vacant land depends mostly on approvals he can get to develop it.
We figure the Irvine Co. could have 20,000 to 25,000 housing lots to sell in the next couple decades, or to develop as apartments.
The biggest remaining residential project for Bren is sections of Irvine’s Northern Sphere, which eventually could include 12,000 homes and apartments. His company also is developing in east Orange and Anaheim. Approvals for those could come by year’s end.
Interestingly, Forbes has Bren’s net worth at $4.3 billion, not much higher than where he’s been for the past few years.
Bren is far ahead of the second wealthiest person on our list, Ernest Rady, who runs Irvine-based Westcorp and checks in at an estimated $2.2 billion.
In fact, Bren’s estimated worth is more than all others in the top five combined, including Broadcom Corp. cofounders Henry Samueli and Henry Nicholas, who eclipsed Bren for a while during the technology boom.
Bren’s wealth comes from a real estate empire of unrivaled size for an individual in California, and perhaps the country.
His holdings include 400 office and industrial buildings, 35 shopping centers, 80 apartment complexes, two hotels, five marinas and three golf courses. He’s said to shun stocks.
In all, Bren’s investment properties come in at about 30 million square feet. His undeveloped land is estimated at 25,000 acres in Orange County, though probably half of that is developable.
Among Bren’s holdings: parts of the 5,000-acre Irvine Spectrum and Newport Center, half of the 185-acre University Research Park next to the University of California, Irvine, and all of Fashion Island, Jamboree Center and the Four Seasons Hotel Newport Beach.
He’s set aside more than half of the 93,000-acre Irvine Ranch as open space.
In recent years, Bren has expanded beyond OC, adding office buildings, shopping centers and apartments in San Diego, Los Angeles and Silicon Valley.
He’s rumored to be buying two more high-rises in San Diego: the SBC and NBC buildings downtown. The sale price could be around $130 million each.
In 2003, Bren paid an estimated $135 million for San Diego’s Symphony Towers.
Bren’s diverse real estate portfolio helped him weather the past couple of recessions. As commercial real estate dipped in 2001, Bren’s housing and retail operations gained steam. Lots sold to homebuilders and wealthy buyers at Shady Canyon, Newport Coast, Turtle Ridge, Quail Hill and Woodbury have commanded top dollar.
And Bren’s malls and shopping centers have enjoyed strong demand from consumers who keep spending, aided in part by refinanced mortgages.
Now, with some signs of cooling in housing, the office market seems ripe for a comeback. After a long downturn, brokers say Bren has begun raising rents at his most popular buildings around Fashion Island.
Likewise, Bren’s Irvine Apartment Com-munities arm could be in for resurgence. The unit is developing key sites in Irvine and in Silicon Valley. Rents are rising as the county adds jobs and higher interest rates cool the housing market.
OC has felt the ripple effects of Bren’s wealth. In May, he pledged an additional $20 million and created the Irvine Ranch Land Reserve Trust. In all, he’s given $50 million for a 50,000-acre land preserve that stretches from the hills to the Pacific Ocean.
In December 2003, Bren gave $20 million to UC Irvine’s computer school and was awarded the UC Medal.
In all, Bren’s given $42 million to UCI and has endowed more distinguished faculty chairs at the University of California than any other donor.
In 1977, Bren was part of a group that acquired a controlling stake in the Irvine Co. In 1983, he bought out most of his partners for $518 million. In 1996, he took sole ownership of the company.
,Mathew Padilla
Ernest RADY
Chairman, chief executive, Westcorp;
chairman, American Assets Inc.;
chief executive, president, ICW Group
Estimated worth: $2.2 billion
Irvine-based Westcorp is a big source of wealth for its 67-year-old Chief Executive Ernest Rady.
With a 40% rise in Westcorp’s shares in the past year, we’ve upped our estimate of Rady’s wealth from $2 billion last year to $2.2 billion, keeping him at No. 2 on our list.
He owns more than half of Westcorp, which counted a recent market value of $3 billion.
Westcorp runs Western Financial Bank and owns the majority of auto lender WFS Financial, which Rady is trying to bring back in-house.
Even at this year’s higher estimate, we don’t feel our number for Rady is aggressive. That’s because his wealth goes beyond Westcorp and includes San Diego real estate holdings, investment management and insurance companies.
His other businesses include San Diego-based American Assets Inc., which owns 3.7 million square feet of retail space, 1.4 million square feet of office space and more than 1,000 apartments, mostly in San Diego.
Then there’s San Diego’s ICW Group, a trio of insurers including Insurance Company of the West.
Since coming to San Diego from his hometown of Winnipeg, Manitoba, in 1966, Rady has owned stakes in beer distributors, radio stations, oil, hedge funds, the San Diego Padres baseball team and the San Diego Sockers indoor soccer team. Rady, who lives in La Jolla, earned degrees in law and commerce from the University of Manitoba.
“I have really enjoyed my career,” Rady said in a speech last year before the Jewish Foundation of Manitoba. “It has been a lot of fun and I want to thank you all for the gift you have given me and that is my (ethical) values and the importance of community that has served me so well through my career.”
Rady’s investments extend beyond Southern California.
In 2003, American Assets paid $136 million to the California State Teachers’ Retirement System for a pair of San Antonio, Texas, shopping centers. Early last year, American Assets paid $85 million for an open-air mall in Monterey and $69 million for a San Francisco office building.
This summer, the Irvine Co. was said to be paying about $260 million to American Assets to buy two downtown San Diego buildings, the SBC and NBC towers. The deal features the two richest men on our list,Rady and Donald Bren.
Rady bought the San Diego towers a year earlier.
Rady cofounded Westcorp in 1972 and has been its driving force since.
Rady and wife Evelyn made big news last year when they gave $30 million to the fledgling School of Management at the University of California, San Diego. The school now is named after publicity-shy Rady. It was among the largest ever donations to a business school anywhere in the U.S.
In 2000, the Radys gave $2 million to San Diego’s Children’s Convalescent Hospital. Ernest Rady served as chair of the children’s hospital’s board. The second floor of the Children’s Way Pavilion at the hospital is named for his parents.
,Pat Maio
Roland Arnall
Owner, chairman,
Ameriquest Capital Corp.
Estimated worth: $2.1 billion
Orange-based Ameriquest Capital Corp., the top subprime mortgage lender, is behind Roland Arnall’s immense wealth.
Arnall and Ameriquest are said to be shoring up their dominance by offering lower rates than rivals. At the same time, the company is pushing into more traditional mortgages for those with good credit.
A big political donor, Arnall last month was nominated to be President Bush’s ambassador to the Netherlands and is awaiting confirmation.
We’re estimating Arnall’s worth to be up 75% from last year’s list. And we still consider our number a reasonable, if not conservative, estimate.
Our figure is based in part on what we can glean from a smaller rival, Irvine-based New Century Financial Corp., which had a market value of $2.7 billion last week.
Arnall is the sole owner of Orange’s Ameriquest Capital, which owns retail lenders Ameriquest Mortgage Co. and Town & Country Credit Corp. and wholesaler lenders Argent Mortgage Co. and Olympus Mortgage Co.
Ameriquest Capital also has an automobile finance unit, Long Beach Acceptance Corp.
Like some others on our wealthiest list, Arnall doesn’t live in Orange County but derives his wealth from a company based here.
Arnall’s main home is in Holmby Hills, where he and wife Dawn paid $30 million in 2002 for Engelbert Humperdinck’s 10-acre compound. Last year, the Arnalls paid $46 million for an Aspen, Colo., getaway estate.
Ameriquest and other subprime lenders make loans to people with splotchy credit histories or difficulty documenting their income. Many of them are middle-class,the average California customer has a household income of $100,000, according to the company.
The industry has seen explosive growth, even as other refinancing has slowed.
But competition has heated up and profits on loans are being squeezed with rising short-term rates and flat long-term rates.
Executives from Ameriquest recently told industry publication American Banker that their wholesale staff earns less in commissions than they would at other lenders. The company said its account executives make up the difference by doing more loans.
The incentive to process more loans may have led some Ameriquest employees astray. The company’s faced scrutiny in several states for alleged fraud and other unethical tactics to get loans done.
Ameriquest said it has a program to combat fraud. “Do the right thing” is said to be an Arnall dictum.
On July 29, the day Arnall was nominated as ambassador, Ameriquest said it set aside $325 million as a reserve for a possible settlement with several state attorneys general.
Meanwhile, Ameriquest has stepped up its sports marketing and general advertising in recent years, in part because of government limits on telemarketing.
The company last year agreed to pay $2.5 million a year for 30 years for naming rights to the stadium home of the Texas Rangers, now known as Ameriquest Field in Arlington, Texas.
Arnall’s politics are decidedly Republican these days, though his giving has spanned both sides of the aisle. He was a big donor to former Gov. Gray Davis, who officiated at his wedding in 2000. Last year, Arnall gave $10,000 to the Democratic Congressional Campaign Committee.
But Arnall’s heavy spending in recent years has gone to Republicans. He and wife Dawn were the single biggest source of money for President Bush in the past three years, giving and raising at least $12 million.
Gov. Arnold Schwarzenegger has gotten more than $1.2 million from the Arnalls and Ameriquest. Arnall gave to the anti-recall effort but backed Schwarzenegger once he was elected.
Arnall, who was born in Paris and came to California by way of Montreal, also is a big charitable giver. Locally, the Arnalls support Anaheim-based nonprofit Olive Crest Homes and Services for Abused Children, The Fulfillment Fund and Otis College of Art and Design in Los Angeles, among others.
HENRY NICHOLAS
Cofounder, Broadcom Corp.
Estimated worth: $1.8 billion
HENRY SAMUELI
Cofounder, chairman,
chief technical officer,
Broadcom Corp.
Estimated worth: $1.75 billion
What’s good for Irvine-based Broadcom Corp. is good for the Henrys.
Henry Nicholas and Henry Samueli, dominant owners of the chipmaker, saw their wealth rise in the past year as Broadcom’s shares gained 23%.
Nicholas and Samueli each own about 26 million shares of Broadcom, stakes worth about $1.1 billion each at recent check. We estimate both men’s wealth to be nearly double that based on years of stock sales.
Both men have been diversifying out of Broadcom shares, decreasing their stakes from about 29 million a year ago.
Since Nicholas left Broadcom in early 2003, he’s been selling off chunks of his shares, putting him just behind Samueli in ownership.
Nicholas has distanced himself from the company but still plays a role in Broadcom affairs. He’s said to get product briefings and had a hand in the company’s chief executive search, which brought in current boss Scott McGregor.
Nicholas and Samueli control a third of the voting stock of the company they started in 1991. During the tech boom, their Broadcom shares made them the richest people in OC, eclipsing Don Bren for a time.
As with prior years, we value Nicholas slightly higher based on what our sources have told us are good investments in real estate and other areas. And while both are generous donors, Samueli has given away more money, becoming one of the nation’s top philanthropists.
Samueli made a big buy this year, paying Walt Disney Co. about $75 million for the Mighty Ducks of Anaheim hockey team. He also owns the management company that runs the Arrowhead Pond of Anaheim.
Since leaving Broadcom, Nicholas has kept a relatively low profile, though his wealth, ambition and engineering expertise prompt speculation about what he’ll do next.
Politics have entered the picture: Last year, Nicholas gave $3.3 million to help defeat Proposition 66, which would have weakened California’s three-strikes law.
Nicholas and Samueli first worked together at TRW Inc. designing chips for the military. They later joined Tustin-based PairGain Technologies Inc., now part of ADC Telecommunication Inc.
A former Air Force Academy student, Nicholas was Samueli’s first doctorate student at the University of California, Los Angeles, before turning business partner.
Samueli is revered as a visionary, an engineering genius. He’s given generously to the University of California’s Irvine and Los Angeles campuses, which renamed their engineering schools after him. In all, Samueli’s given more than $150 million in charitable gifts in the past decade.
Nicholas also has donated to UC Irvine and other causes, including a $10 million donation this year to St. Margaret’s Episcopal School in San Juan Capistrano, which his three kids attend.
,Andrew Simons
George Argyros
Chairman, chief executive, Arnel & Affiliates;
limited partner, Westar Capital LLC
Estimated worth: $1.2 billion
George Argyros is back in the real estate game.
Earlier this year, his Arnel & Affiliates of Costa Mesa bought a former Super K in La Habra and plans to turn the site into a 220,000-square-foot shopping center. Irvine-based Hopkins Real Estate Group also is in on the deal.
“I love the real estate business and I love Southern California,” said Argyros, who stepped down as ambassador to Spain after President Bush won re-election.
Our estimate for Argyros’ wealth is $1.2 billion this year, up from $1 billion last year. The increase is based on rising real estate valuations and gains in stock investments. About half of Argyros’ wealth is thought to come from stocks.
As for real estate, a big chunk of Argyros’ wealth is tied to his 5,200 apartments. They likely have increased in value in the past year.
While rents are modestly rising here, investors are bidding up the value of apartments with continuing low interest rates.
In all, Arnel & Affiliates owns more than 2 million square feet of office, industrial and retail space. Among them: the 280,000-square-foot Metro Pointe in Costa Mesa and the 356,000-square-foot Puente Hills Business Center in Industry.
As for stocks, Argyros owns shares of Santa Ana-based First American Corp., which have nearly doubled in the past year.
He also owns shares of Kansas City, Mo.-based DST Systems Inc., which are up more than 10% in the past year. DST is an early investment of Westar Capital LLC in Costa Mesa, which Argyros started in 1987.
One of Argyros’ stocks, Valencia-based Newhall Land and Farming Co., got a pop with its 2004 acquisition by Lennar Corp. and LNR Property Corp.
Argyros also has been getting back into politics. He was among those who helped raise $3 million for Gov. Arnold Schwarzenegger during a March visit to Irvine.
His ambassador appointment topped years of Republican fund raising, including $30 million for the 2000 Bush campaign. (In 1990, the first President Bush appointed him to the Federal Home Loan Mortgage Corp. board.)
Born in Detroit and raised in Pasadena, Argyros graduated from Chapman University in 1959 with a major in business and economics. He also is an alumnus of Michigan State University. He served as chairman of Chapman’s board of trustees from 1976 until his appointment and is the school’s leading benefactor. The business school and student center are named after him.
,Mathew Padilla
WILLIAM GROSS
Cofounder, chief investment officer,
managing director,
Pacific Investment Management Co.
Estimated worth: $1 billion
Making money on bonds can be like watching paint dry. But for Bill Gross, the bond guru at Newport Beach-based Pacific Invest-ment Management Co., wheeling and dealing in bonds has become an art.
The mustachioed 60-year-old has earned returns that have vaulted his funds to the top of their classes nearly every year, according to mutual fund research firm Morningstar Inc.
In 2004, the big story was exposure to Europe’s bonds, which bolstered returns even as his main fund missed some of the U.S. corporate rally.
Returns have been steady for Gross as manager of the $86 billion Pimco Total Return Fund, the world’s largest bond fund. Morningstar estimates the fund has managed returns of more than 7.36% annually in the past five years.
As Pimco’s chief investment officer, Gross managed $493 billion in assets as of June 30, up 25% from a year ago.
Bonds have made Gross rich. We’ve followed Forbes’ lead and upped our estimate of Gross to $1 billion, a fortune he got when German insurer Allianz AG bought Newport Beach-based Pimco for $3.3 billion in 2000.
At the time, Gross had a Pimco stake of more than 10%, according to sources. That alone would have been worth about $360 million.
After Allianz bought the 34-year-old company, it offered Gross a $200 million, five-year deal to stay on. Add to that dividend payments Gross received before Pimco was sold,he is said to have received $1 million every quarter,and we feel safe in calling Gross the best paid bond manager in the world.
Gross has come a long way since the day three decades ago when he put a card on a bulletin board at a Mission Viejo Albertson’s grocery store offering to manage money.
Gross was a leader in the formation of Pimco Advisors in 1994, which spun off from Pacific Mutual Life Insurance (now Newport Beach-based Pacific Life Insurance Co.)
He’s a marquee commentator on bonds and other matters, doing television feeds from Pimco’s own broadcast facility in Newport Center. Pimco’s headquarters today boasts 691 total workers, including 258 investment professionals.
In person, Gross is soft-spoken, even humble.
His online commentaries about the markets and the economy are well read. He came out against invading Iraq in 2003. This month he took on the arcane topic of investing based on the “capital asset pricing model” by comparing it to his mother’s stamp collecting as a future nest egg for Gross’ college.
Last year started rough but ended well for Gross and Pimco with a New Jersey fraud case and class action suits amid an industry wide mutual fund trading scandal. Pimco’s bond operations were cleared of wrongdoing. An Allianz stock fund business paid $18 million to settle charges.
Gross earned a bachelor’s degree from Duke University where he studied psychology. He helped arrange poker tournaments at his fraternity. He graduated in 1966, and showed keen interest playing Blackjack in Las Vegas. He likes to tell a story about using his Midas Touch to turn a few hundred dollars into $10,000 in a few months.
At the University of California, Los Angeles, he received a master’s in business administration. In 1971, he took an $11,000-a-year securities analyst position at insurance giant Pacific Life, where he learned how to make money with bonds by trading, not buying and holding.
He and his wife Sue Gross are philanthropists, giving $100,000 annually to Orange County Teachers of the Year. Last year, they pledged $23.5 million to Duke University in Durham, N.C., to endow scholarships for undergraduate and medical students. The couple also gave $20 million to the Hoag Hospital Foundation, in Newport Beach, to help construct a new women’s health facility at Hoag Memorial Hospital Presbyterian and buy digital mammography equipment for the hospital. The foundation has received $4 million of the gift, with the remainder to be paid over four years.
JAMES JANNARD
Founder, chairman, chief executive,
Oakley Inc.
For years, we’ve differed with Forbes on a valuation for Jim Jannard. Let’s just say we’re meeting in the middle this year.
We’re estimating Jannard at $1 billion, up from a conservative $700 million last year. Oakley’s shares have nearly doubled in the past year, though that’s only part of our revision. We’ve just done a better job accounting for historical stock sales.
But we’re not as comfortable going to Forbes’ $1.2 billion.
Both our numbers include Jannard’s current Oakley stake, about 43 millions shares worth $770 million at recent check.
They also include about $400 million in stock sales in the mid-1990s. But we’re erring on the side of conservative by presuming Jannard has put some of his proceeds back into Oakley and spent some here and there on racecars and other hobbies.
Jannard owns 63% of Oakley and has been buying more in the past year,about 250,000 shares since last spring.
The bet has paid off. Oakley’s shares are up on improving results, including an 11% rise in second-quarter sales to $170 million. Net income was up 25% to $20 million, thanks to new products.
The company is betting big on sunglasses with digital music players and wireless phone headsets built in.
Jannard, a blunt, cigar-smoking University of Southern California dropout, lives and breathes Oakley. The company’s name comes from his favorite dog breed, Oakley English Setters.
His other passion is drag racing. Oakley backs up-and-comer Eric Medlen and other drivers. Jannard has said most racing expenses come out of his pocket.
In 1975, Jannard started peddling motorcycle handle grips from his station wagon, moving on to goggles and then sunglasses.
Jannard is a recluse to the extreme and rarely grants interviews or photos, though he’s a photography buff himself. He splits his time between Orange County and Spieden Island, Wash., a getaway he bought in 1997 for $22 million.
,Michael Lyster
Igor Olenicoff
Owner, founder, president,
Olen Properties Corp.
Estimated worth: $800 million
Igor Olenicoff is richer today than a year ago, owning apartments and office buildings in several hot markets.
We’ve increased our estimate of his wealth by 7% from a year ago to $800 million, in recognition of investors bidding up the value of apartments and office buildings. We’ve also done a more thorough analysis of his holdings this year, accounting for some of the gain.
Olenicoff owns 11,000 apartments,some converting to condominiums,in South Florida, Phoenix and Las Vegas. His holdings are so vast he could be worth $1 billion or more.
We’ve decided to go conservative, given that some of his apartments are in markets where valuations aren’t as high as in Orange County and his debt level isn’t entirely clear to us.
Olenicoff continues to expand his holdings here and elsewhere. He plans to develop up to 2,000 apartments near John Wayne Airport, including up to two eight-story towers. In January he paid about $135 million for a pair of 13-story office towers on Main Street in Irvine.
Then there’s 1,400 acres of land in Temecula, Las Vegas and Florida. In South Florida, Olenicoff’s developing 400 condos and three shopping centers. Two office projects in South Florida are done, and Olenicoff said he’s seeking a third.
In Brea, Olenicoff is developing a 130,000-square-foot office building. The five-story building is a $20 million-plus final phase of his Olen Pointe Brea. A mortgage company has leased the building.
Newport Beach-based Olen Properties Corp., which Olenicoff started and owns, has about 5 million square feet of office and industrial space from Brea to San Clemente.
Last year Olenicoff cashed out of a big project in Colorado, where he had teamed with Hadi Makarechian of Capital Pacific Holdings Inc. and son Paul Makarechian of Makar Properties LLC to develop a masterplanned community on 24,000 acres in Colorado Springs.
Olenicoff sold his stake in the project for $90 million, according to newspaper accounts and a source familiar with the deal.
He made his fortune in Orange County after his family fled Soviet Moscow and landed in America by way of Iran in 1957. He’s regarded as a shrewd businessman who knows how to get around obstacles to get his projects done.
Olenicoff has had some disputes with the taxman over the years, and one is ongoing.
Son Andrei is playing a major role in the company.
Olenicoff worked his way through the University of Southern California, where he graduated with three degrees,a bachelor’s in finance and engineering, a master’s of business administration and a master’s in statistics and quantitative analysis.
ANNE CATHERINE GETTY EARHART
Heiress to J. Paul Getty
Estimated worth: $775 million
CAROLINE GETTY
Anne Catherine Getty Earhart and sister Caroline Getty are putting inherited oil fortunes to use backing environmental and Democratic causes.
The granddaughters of late oil tycoon J. Paul Getty are two of the nation’s richest women. They’re among 16 grandchildren of the autocratic billionaire.
We’re again pegging both at $775 million, based on Forbes’ numbers and conservative estimates of how their fortunes have fared.
Earhart, a 52-year-old Laguna Beach resident, gave $50,000 to the Democratic Party in October. She backed John Kerry’s presidential bid.
Earhart surfaced in 1992 when she and husband John Earhart, who headed up the Homeland Foundation of Laguna Beach, unsuccessfully fought the San Joaquin Hills (73) Toll Road.
Sister Caroline Getty, 47, also an ardent environmentalist, drew attention for a $1 million donation to the Nature Conservancy in support of two California parks bonds. Getty, who lives in Corona del Mar and has a San Francisco home, said she was the mystery donor behind a gift listed under “Wild Rose LLC,” an entity named for her dog. Voters approved the bonds.
Last year Getty, called a “down-to-earth nature lover,” was fined $135,000 by the California Fair Political Practices Commission for disguising herself as the source of the donation. Getty didn’t benefit financially from the corporation and her attorneys said she set it up only as a means to donate to environmental causes.
Getty is a member of the board of the Wilderness Society and has served on the boards of the World Wildlife Fund and the National Fish and Wildlife Organization.
The sisters’ wealth comes from J. Paul Getty, who struck oil in 1953 and founded Getty Oil Co. in 1956. He set up the original Getty Museum art collection and endowed the J. Paul Getty Trust, which funds the Los Angeles museum. He died in 1976.
After a nine-year battle over Getty’s estate, a 1985 settlement gave Earhart, Caroline Getty and one other daughter of his late son George Franklin Getty II $750 million each. The entire Getty Trust was $4.1 billion when the funds were dispersed into six separate trusts.
The haggling was nasty: Gordon Peter Getty was in charge of the trust, founded with a $3.3 million bequest by J. Paul Getty’s mother, Sarah. Gordon ended the family feud by resigning as trustee. Gordon had been criticized for 1984’s selling of the trust’s 40% share of Getty Oil to what’s now ChevronTexaco Corp. The sale went through in 1986 for $10 billion.
,Mike Mason
DAVID SUN
Cofounder, chief operating officer,
Kingston Technology Co.
Estimated worth: $700 million
JOHN TU
Cofounder, president,
Computer memory has been very memorable for David Sun and John Tu.
The two founded Fountain Valley-based Kingston Technology Co., one of the largest makers of computer memory products.
Thanks to improved sales, we revalued Sun and Tu’s interest in Kingston (they’re dual owners) up by $100 million from last year. Kingston’s 2004 sales grew 38% to $2.45 billion
Fortune came to Tu and Sun after building up Kingston and then selling 80% of it to Japan’s Softbank Corp. for $1.5 billion in 1996.
They bought it back for a fraction of what they were paid three years later.
Since then the company has grown steadily, save for some off years in 2001 and 2002 because of the technology bust and larger economic slowdown.
Both men like to keep low profiles and requested not to be on the Business Journal’s list.
They’re surrounded by people who love them at Kingston.
The two made headlines when they handed out $100 million in bonuses to workers after selling the company to Softbank.
Sun takes smoke breaks with workers and is known to bring his golf clubs to work to practice at the driving range at Kingston’s headquarters.
Tu is an avid joke teller and drummer who practices with his band, JT and California Dreamin’, at Kingston.
Kingston continues to bet big on China. The two put the finishing touches on a new Shanghai plant that stands to increase memory production to 60 million memory boards from about 20 million this year.
They’ve shifted some work from Orange County to China, but still employ about 900 here.
Both men are on their second fortunes, having founded memory products maker Camintonn in the 1980s and selling it to now-defunct AST Research Inc. They left AST to start Kingston after losing millions in Camintonn proceeds in the stock market crash.
Sun and Tu have electrical engineering degrees,Tu from Technische Hochschule Darmstadt in Germany, Sun from Taiwan’s Ta-Tung Institute of Technology. Tu, originally from China, moved to the U.S. in 1972. Sun, who was born in Taiwan, came in 1977.
William Lyon
Chairman, chief executive,
William Lyon Homes Inc.
Estimated worth: $675 million
The general, as William Lyon is known, has seen the value of his homebuilding company soar 50% in the past year. But the rise has been bittersweet.
Part of the surge came after Lyon offered to buy the rest of the company and take it private. Investors bid up the shares, betting Lyon would match them. He folded last month, resigning himself to controlling about 70%.
In calculating Lyon’s wealth, we added the value of the shares he owns with those in a trust he controls for his son,since that’s wealth Lyon helped create and is ultimately a form of estate planning.
The general also owns or manages 11,000 apartments, which we factored into our estimate.
And he has other investments. Lyon is a major investor in Commercial Bank of California in Costa Mesa, where he’s chairman. His involvement helped the bank attract $27 million in startup funds.
2004 was a banner year for William Lyon Homes: Profits more than doubled from 2003 to $171 million, and revenue doubled to $1.8 billion.
Like other homebuilders, the company now is showing some signs of slowing. But the general still has some big things on tap. He’s developing a portion of the former Tustin Marine base with partner Lennar Corp. of Miami.
Lyon’s been in homebuilding for five decades. He started Luxury Homes with brother Leon in Fullerton in 1954, and later sold the company to American Standard in 1968. He founded William Lyon Co. in Newport in 1972.
In 1987, Lyon acquired Newport’s Presley Development, which he ran separately from William Lyon Co. The downturn of the early 1990s took its toll on his empire. The general doggedly worked through the disaster without resorting to bankruptcy.
Then he started William Lyon Homes in 1993. In 1999, he combined William Lyon with Presley, creating the modern William Lyon Homes, just in time for the housing boom.
Lyon is a retired Air Force major general with 17 combat decorations. He was a fighter pilot during World War II and in Korea.
He’s an aviation buff: In 1981 he and George Argyros paid $62 million to buy AirCal. They turned around the troubled regional airline and sold it five years later for $225 million.
The general also owns a valuable collection of some 95 classic and antique cars, including 10 Duesenbergs (only 480 made). And his 130-acre Coto de Caza estate is worth millions.
,Mathew Padilla
PAUL MERAGE
Chairman, Falcon Investment Group LLC;
president, Merage Foundations;
cofounder, former chief executive,
Chef America Inc.
Estimated worth: $600 million
Paul Merage created a cultural icon,and a fortune,by inventing Hot Pockets.
“He’s proud of Chef America and what he did there,” said Marshall Kaplan, friend and manager of Merage’s foundations.
These days, Merage aims to be a “civic entrepreneur,” according to Kaplan. An Iranian immigrant, Merage sold his Colorado-based Chef America for $2.6 billion to Nestl & #233; SA in 2002. After that, he moved to Orange County to spend time with his family and become a philanthropist.
We’re estimating Merage’s wealth at $600 million. It’s believed he and brother David, Chef America’s other cofounder, owned most of the company.
Kaplan describes Merage as the perfect boss. Merage provides the broad overview. Once the agenda is set, he lets others follow through, he said.
“When it’s appropriate to talk, or when Paul can make a difference, he will say something and then it will be wise and strategic,” Kaplan said.
Merage earned his fortunes spotting trends. He saw the number of women going to work and combined that with technology to get Hot Pockets, frozen food you throw in the microwave.
These days, one of the trends Merage has spotted is the number of people who want more than golf greens after retiring.
Children First, Merage’s latest foundation, wants to recruit skilled retirees for jobs in early childhood development programs, Kaplan said. The other component of Children First is to fund educational programs through Social Security donations of the well to do.
Many kids of low-income parents don’t have the benefit of early childhood education, he said.
“Not because they’re bad parents, but because they have to work, or work two jobs,” Kaplan said.
Merage’s other two foundations are American Dream and U.S.-Israel Trade.
American Dream seeks to help immigrants. Merage doesn’t take a position on immigration policy, Kaplan said, but the foundation believes immigration historically has been good for America.
The foundation creates famous American immigrant DVDs that teachers can use in their classes. The foundation has made four so far and working on two a year.
The other foundation promotes economic growth in Israel by encouraging exports to the U.S.
Merage is a family man.
“His family is a real avocation,” Kaplan said.
He has three grown children and is married to Lilly, who’s also active in the foundations. He likes to play tennis and is passionate about music,classical and jazz. He also collects art.
Merage hasn’t abandoned business. He’s starting a few, one to do with hedge funds, another real estate and still another that is evolving.
,Sherri Cruz
JANIE TSAO
Cofounder, senior vice president, sales and marketing, Cisco-Linksys LLC
VICTOR TSAO
cofounder, senior vice president,
general manager, Cisco-Linksys LLC
Combined estimated worth: $550 million
Consumer networking gear sellers Janie and Victor Tsao are a little less rich then they were a year ago.
With a slip in shares of Cisco Systems Inc.,which bought the Tsaos’ Irvine-based Linksys Group Inc. for $500 million in 2003,the couple is about $50 million lighter than in 2004.
We’ve estimated the Tsaos worth based on the amount of Cisco shares granted to them in the Linksys sale.
We then subtracted 10% for stock options awarded to workers and allocated the balance to the Tsaos. Based on input from sources, we assume most of their wealth still is in Cisco. Shares of the networking gear maker are off 10% in the past year.
It looks like the Tsaos will be at Cisco for some time. The two re-upped their contracts with Cisco to lead the Linksys unit for at least two more years.
“I’ll be here for a while,” Victor Tsao said. “We have a lot we want to do.”
Linksys is growing under Cisco, which recently unveiled plans to buy Denmark’s Kiss Technology AS in a stock and cash deal valued at $61 million. Cisco said it plans to fold Kiss into Linksys.
That was the second deal for Cisco to fold into Linksys. In April, Cisco bought privately held Sipura Technology Inc., a voice-over-Internet company.
The Tsaos shy away from talk of their wealth. The couple lived in a modest house in Irvine for many years as they grew Linksys. Only when Linksys began to take off did the Tsaos splurge on a house in Newport Coast.
The Tsaos built Linksys from the ground up. The couple left cushy computer jobs in 1988 to start the company out of their house. The original goal: to find a way to link more than one computer to a printer.
They’ve come a long way since then, creating a company that makes products that link entire computer networks together wirelessly.
,Andrew Simons
HOWARD
AHMANSON JR.
Heir, philanthropist
Estimated worth: $525 million
If you were to judge Howard Ahmanson by the headlines he makes, you might conclude he’s a right-wing fanatic.
Or you could say he’s a complex man with religious convictions.
Some thoughts from Ahmanson: The biblical person he most identifies with is Moses. The sin he commits most often,pride.
That’s according to a lengthy, laid-bare series on Ahmanson in the Orange County Register last year.
The heir to the Home Savings & Loan fortune has emerged as a prominent opponent to the Anglican Church’s appointing of gay bishops and acceptance of same-sex marriages. He’s also a proponent and supporter of “Intelligent Design,” a challenge to Charles Darwin’s Theory of Evolution.
Ahmanson was one of Time magazine’s 25 most influential evangelicals.
Through his Fieldstead & Co., he funds groups that oppose gun control and affirmative action. He’s also an advocate of the poor. He gives to charities that feed the needy in developing countries and here in Orange County. He also supports charities that help make small loans to poor in developing countries.
Ahmanson, who lives in Newport Beach with wife Roberta, also suffers Tourette Syndrome, a neurological disorder that results in involuntary body movements and repetitive and compulsive thoughts.
A self-described trust fund baby, Ahmanson runs several foundations from Irvine. He’s backed President Bush as well as conservative politicians in OC and elsewhere. He’s supported the Claremont Institute and has paid to send inner city kids to bible school.
His father, Howard Fieldstead Ahmanson Sr., got his start foreclosing on properties during the Depression. He bought Home Savings in 1947 for $162,000.
By the time the elder Ahmanson died, the thrift had assets of $2.5 billion. He spent much of his later years as a philanthropist, creating the Ahmanson Theater in Los Angeles and the Ahmanson Gallery of the Los Angeles County Museum of Art.
When Ahmanson died, his estate was split between the Ahmanson Foundation and Howard Ahmanson Jr. Today, the foundation has assets of some $700 million. We’ve based our estimate of Howard Ahmanson Jr.’s wealth on that, and factored in money he’s given away.
Even so, our figure probably is conservative. Ahmanson had money before his father died and also inherited wealth from his late mother, Dorothy. In June, his stepmother Caroline Ahmanson, a charm school founder and philanthropist, died. Ahmanson could be in line to inherit more wealth.
Ahmanson has been described as reclusive, a behind-the-scenes activist. Tourette Syndrome keeps him from speaking in public,his wife generally speaks on his behalf, according to the 2004 Register story. He has described himself as being guilty about his wealth early in life and concerned about how God would perceive him. He later learned to use it for what was good in his eyes, he said.
Ahmanson’s politics are a mix of fundamental conservativism and libertarianism. He’s said to oppose government social programs and advocate personal responsibility and free enterprise.
His philosophy draws on the writings of Christian theologian C.S. Lewis and 16th century reformer John Calvin. He’s also said to identify with some, but not all, of the teachings of the late Rev. Rousas John Rushdoony. The father of the Christian Reconstructionists movement envisioned a society based on biblical laws.
Ahmanson is a big donor to American Anglican Council based in Washington, D.C. The group is leading the charge against the church’s shifting stance on gay issues. The council’s chief executive, David C. Anderson, ran St. James Episcopal Church in Newport Beach where Ahmanson worships.
Stories about Ahmanson describe him as a reluctant multimillionaire. Earlier in his life, he lived on $1,200 a month, drove a banged-up pickup truck and wore used flannel shirts, according to a 1996 Register story. He even toured Europe like a hippie in his younger days, when he was still formulating his religious identity.
Later in his life, Ahmanson camped out in Africa to learn about the needs of the poor and visited rural Indonesia to promote free enterprise.
Anthony Maglica
Owner, founder, president, Mag Instrument Inc.
Estimated worth: $500 million
Another year older and Anthony Maglica, 74, still is lighting up his company.
And everyday, Maglica (mag-lee-cuh), head of Ontario-based Mag Instrument Inc., doggedly fights to protect his patents,no matter what the monetary award.
His schedule: up at 4 a.m., works at his Anaheim Hills home a bit and arrives at Mag a little later. He said he doesn’t spend time on superfluous activities and doesn’t watch TV.
He told the Los Angeles Times: “I don’t think that I’ll ever die.”
For Maglica designing new products is a creative outlet.
“It’s fun doing it,” he said.
Maglite flashlights, known for their durability, have appeared in movies, TV and books and are a staple of police officers and everyday folks.
Maglica said he’s a believer in making his products in the U.S. and keeping jobs in Southern California. And his flashlight empire is set to get bigger next year. Mag is in the process of adding about 700,000 square feet of production space on 30 acres in Ontario. Maglica’s new plant is expected to create 1,600 jobs, according to the Business Press in San Bernardino.
Mag counts about 800 workers in Ontario.
“I could make more money,” Maglica said, by moving production to China.
Profits could be 10 times what they now are, he said.
“But what am I going to do with more money?” he said. “What will happen to these people here? What kind of human being would I be?”
If Mag were public, Maglica said he’d probably be fired. But Mag has no plans to go public, he said.
Selling the company isn’t an option either, even though Maglica said he’s had offers.
Still, Maglica said he’s worried about China. The U.S. can’t compete with labor there, he said.
To stay here, “you have to automate” and settle for less profit, Maglica said.
Two of Maglica’s sons work at Mag. One works in research and development and the other is an all-around businessman, he said. They are the likely candidates to take over, he said.
Maglica is listed as the inventor for several patents filed with the U.S. Patent and Trademark Office.
Mag’s products have spawned plenty of imitators and hundreds of lawsuits. In a recent interview, Maglica said his lead attorney is like a brother.
Mag recently spent $585,000 in legal costs to win $44,000 in damages from Ikea International AS, which was selling an alleged knockoff of the Mini Maglite.
In 2003, the company won a $113,000 judgment against Japan’s Asahi Electric Corp., which made cheaper flashlights that looked like Mag’s.
In 2002, Maglica was awarded $1.2 million from brothers Stephen and Christopher Halasz and their Bison Sportslights LLC in Englewood, Colo. They are the sons of Maglica’s former common law wife, Clarie Halasz, who waged a bitter palimony case against him in the 1990s.
By the end of the court fight with Clarie Halasz, Mag had gone from $400 million to $750 million in valuation, according to Maglica’s attorney. We’re conservatively estimating Maglica at $500 million, allowing room for any debt, minority ownership and his palimony settlement.
Born in New York during the Great Depression, Maglica was raised in his mother’s native Croatia. He was a small child when his mother returned to Zlarin Island, where she had family.
After a return visit to Zlarin, in 2000, Maglica enlisted in Cal State Polytechnic University, Pomona, to develop a plan for the island that would bring the people back and boost the economy. The project is ongoing, he said.
As a young man, Maglica returned to New York, though he spoke no English. Most of his training came while working as an experimental machinist.
He then moved to Denver for a few years and was lured to California when he was told that he didn’t need warm clothes and he could make $3 an hour, Maglica recently said in an interview with Screw Machine World, a trade publication.
By 1955, he managed to save $125 to buy a lathe and start his own machine tool business. Maglica made precision parts for aerospace and defense contractors, earning a reputation for quality. The company’s trademark flashlight was introduced in 1979.
,Sherri Cruz
VINCENT SMITH
Quest Software Inc.
Estimated worth: $450 million
Vincent “Vinny” Smith is a little richer this year, thanks to a rise in the share price of his Quest Software Inc.
We’ve valued Smith at $450 million based on his Quest shares, past stock sales and other investments. That’s a little higher than last year, thanks to his Quest stake. Like other software makers, Quest’s shares benefited from a strong year on Wall Street, increasing about 25% in the past year.
Smith is a low-key multimillionaire who goes by Vinny and is known to sport jeans and a cap. He’s not beyond a little bit of flash: The lobby of the company’s new Aliso Viejo headquarters has a 6,000-gallon fish tank, bamboo floors and dune grass inside glass walls.
Smith was a billionaire after Quest went public in 1999,the height of the technology boom.
Known as a savvy investor, Smith says he likes to dabble in a variety of investments, such as the stake he took in Fusion International, a local surfwear venture, in 2003.
Smith also has various real estate holdings and owns part of 20 restaurants, among other ventures.
Lately, Smith has been buying at Quest. So far this year, the maker of systems management software has bought Utah’s Vintela Inc. for $57 million and Imceda Software Inc. of Massachusetts for $61 million.
In a subtle stepping back, Smith in February promoted company insider Douglas Garn to president. Smith said he wanted to focus more on strategy.
Smith started his career with Oracle Corp. In 1992, he got to work on his first big payoff by starting San Francisco-based Patrol Software with an Oracle colleague. BMC Software Inc. bought Patrol in 1994.
Smith’s interest in Quest grew through an investment his Insight Capital Partners made in 1995.
Smith took a seat on the company’s board and gradually became more involved, becoming chief executive in 1997 and chairman a year later.
He replaced Quest cofounder David Doyle. In 2000, he was named an Ernst & Young Entrepreneur of the Year.
Maurice McAlister
Chairman, cofounder,
Downey Financial Corp.
Estimated worth: $425 million
Maurice McAlister doesn’t live in Orange County anymore, but the source of his wealth does.
He owns 20% of Newport Beach-based Downey Financial Corp., which counted a recent market value of $2 billion.
McAlister, a healthy, sharp 80-year-old, lives just over the state line in Arizona’s Bullhead City. He comes to Downey’s Back Bay headquarters for board meetings and other business.
The housing boom has been good for Downey. The company’s shares are up nearly 50% in the past year, thanks in large part to the thrift’s booming mortgage business.
McAlister owns about 5.6 million shares of Downey, parent of Downey Savings And Loan Association. He’s extremely private. There have been rumors of him selling from time to time, and they’ve always proved false.
Those who know McAlister call him down to earth. He’s also a family man who once got around traffic by taking a helicopter to see his grandson play in the Little League World Series.
McAlister cofounded Downey in 1957 with the late Gerald H. McQuarrie, who served as president of the thrift from 1957 until retiring in 1991.
In the early days, Downey made mortgage loans and developed shopping centers, back when savings and loans could do so.
These days, McAlister has real estate and other investments outside Downey.
At the thrift, he gets paid an annual $470,500 under a “founder retirement agreement,” plus $36,000 for being a Downey director.
In 2000, the founder’s agreement was amended so that he gets a guaranteed $39,210 a month so long as he lives. If he dies prior to 2010, the payments continue to his estate until that time.
,Pat Maio
JOAN IRVINE SMITH
Heiress to James Irvine
Count Joan Irvine Smith, great-granddaughter of James Irvine, original owner of the Irvine Ranch, as a fan of the proposed Great Park at the former El Toro Marine base.
“What I would like to see is something that’s world-class, a Smithsonian West,” she said.
Smith is known for her passions: the environment, horses and art.
Smith’s great-grandfather James Irvine struck it rich during the Gold Rush of 1849. That year, he and three partners bought 120,000 acres of land, roughly a quarter of OC then.
James Irvine II, Smith’s grandfather, incorporated the land as the Irvine Land Co. in the 1890s, under the laws of West Virginia, which gave him more control over the property.
Donald Bren, chairman and owner of The Irvine Company, bought out Smith and her late mother Athalie R. Clarke for $256 million in 1991, but not after a court fight.
Smith and Bren are on cordial terms, she said.
“We always chat,” Smith said of Bren. “I’ve told him he has a great legacy he can leave,open space.”
Based on input from sources, we’re putting Smith’s estimated worth at $425 million, up slightly from last year with some assumed appreciation in investments.
Smith’s conservationist streak began to appear when she joined the Irvine Co.’s board in 1957 at age 24. Not only was she the youngest director, she was the only woman. Adding to the tension: Smith and her mother were in litigation with the company for much of the next three decades.
She said she pushed for the board to give 1,000 acres for the University of California, Irvine. She also advocated a masterplan for developing the ranch.
She went on to oppose and block the company’s sale to Mobil Oil Corp.
Smith, a Democrat, said she is a “personal friend” of Arnold Schwarzenegger and Maria Shriver.
“I agree with some things, not others” that the governor has done, she said.
Smith is a collector of California Impressionist paintings, displayed at the Irvine Museum in Irvine. Smith said she and her mother started the museum to urge conservation of the natural scenery depicted in the art.
She’s written and co-authored art books on California history. In the works is the 750-page “A California Woman’s Story,” Smith said. The title came from Shriver.
A skilled horsewoman, Smith works with R.J. Brandes, chief executive of Blenheim EquiSports of California LLC, to put on The Oaks horse shows.
She breeds, trains and sells world-class jumping horses at her farms in San Juan Capistrano, northern San Diego County and Middleburg, Va.
Smith gave $1 million toward the Reeve-Irvine Research Center when she heard that the late Christopher Reeves didn’t blame his horse after his tragic accident.
After settling with the Irvine Co., Smith and her mother started the National Water Research Institute, which seeks to find new sources of fresh water through research and technology and to protect existing rivers, lakes and oceans.
Smith also supports UCI’s bid for a law school and its global warming research.
She had three brief marriages before tying the knot with the late Morton “Cappy” Smith, a competitive horseman from Virginia. The marriage lasted for 12 years and ended in 1976.
,Purnima Mudnal
DUANE ROBERTS
Chairman, chief executive,
Entrepreneurial Corporate Group
Estimated worth: $400 million
Duane Roberts is rich and isn’t afraid to write big checks for political causes.
Earlier this year, Roberts and wife Kelly anted up $100,000 for Gov. Arnold Schwarzenegger’s ballot initiatives, helping to make a March fund-raiser in Irvine the largest yet for the county at $3.2 million.
In February, Roberts gave $2,000 toward an effort opposing the recall of Murrieta’s mayor and two councilmen.
For President Bush’s inaugural celebration in January, Roberts’ Entrepreneurial Capital Corp. investment company kicked in $100,000.
In October, Roberts was among a group that hosted Schwarz-enegger at a Corona fund-raiser.
And that’s just what Roberts had done in the past year. Last summer, Roberts hosted Vice President Dick Cheney at his stately Mission Inn in Riverside.
Roberts, who made a fortune in frozen burritos, real estate and banking, has been an active GOP fund-raiser. He’s known as a “bundler”,a rainmaker who brings together other wealthy political donors. Roberts and other bundlers, the elite of which are known as Bush Rangers, have been a key part of the president’s fund-raising strategy.
Politics is a big part of Roberts’ activities these days. He lives in Laguna Beach but still is actively involved in the politics of the Inland Empire, where he’s originally from.
We’ve upped our estimate of Roberts’ wealth this year, based on input from sources.
Besides politics, Roberts is perhaps best known as the owner of the landmark 239-room Mission Inn, which he bought for $16 million in 1992 and saved from possible ruin.
As a child, the man now known as “keeper of the inn” went with his parents to parties and other events at the Mission Inn where he explored the castle-like hotel’s brick hallways.
“There are some businesses that are very profitable, and money is what drives you to do it,” Roberts said. “And there are other things that you get personal enjoyment from and are fun to do.”
In 2003, the Riverside native was given the Frank Miller Civic Achievement Award at the Historic Riverside County Courthouse. The award is named for Frank Miller, Mission Inn’s developer.
The Inland Empire figures large in Roberts’ background,and in much of his business interests. Roberts’ family ties to Riverside go back more than 50 years.
In 1950, his father, Harry Roberts, founded Butcher Boy Food Products Inc., a meat company that was the main supplier of hamburger patties to the original McDonald’s in San Bernardino. While working at Butcher Boy, 19-year-old Roberts came up with what he bills as the first frozen burrito.
At 27, Roberts became president and built Butcher Boy from one plant with 60 workers and $3 million in yearly sales to six plants with 1,400 workers.
By the time the family sold the business to Central Soya Inc. in 1980, Butcher Boy had an estimated $85 million in yearly sales.
Roberts stayed on as chairman of the company for about two years after the sale. The company later became part of Tyson Foods Inc. and recently was sold to a private equity group.
He later went on to sell another burrito company, Fernando’s Foods, to ConAgra Foods Inc. in the late 1990s for about $35 million in ConAgra stock.
Roberts took his Mexican food fortune and branched out into real estate, as well as banking and other investments.
He was a majority shareholder in Moreno Valley-based Cal-West National Bank, which was sold in 1993 to Overland Bank of Temecula.
The bank’s successor, First Pacific National Bank, in which Roberts was the largest shareholder, later was bought by Zions Bancorp.
In the early 1980s, Roberts founded DRR Investments, which later became Entrepreneurial Capital, an investment arm of Entrepreneurial Corporate Group.
Roberts’ other interests include two companies that own 13,500 apartments in the Southwest, and Entrepreneurial Foods Group LLC, which owns four British food makers.
Roberts has been active in the Republican Party for about 20 years and has been a top contributor to GOP campaigns.
He was among 250 contributors dubbed “Regents” who gave at least $100,000 in support of President Bush and other Republican candidates during the 2000 election. In the past decade, he’s given some $2 million to Republicans.
Roberts also is involved in Olive Crest Homes and Services for Abused Children, the Anaheim-based nonprofit for abused and neglected children. He started the group’s Inland Empire branch.
Michael Harrah
Owner, president,
Caribou Industries Inc.
Estimated worth: $375 million
Michael Harrah is putting his wealth to work on the project of his career: a 37-story office high-rise proposed for the heart of Santa Ana.
In April, he bankrolled an effort to get city voters to sign off on the project, which they did. Now he’s looking to sign on tenants and line up financing for the tower before starting construction.
Harrah sold three office buildings last summer to Birtcher Anderson Realty LLC for $58 million as a first step,some of the money is set to go toward initial costs.
In any case, Harrah must lease half the building before starting construction under an agreement with Santa Ana.
This year we have boosted Harrah’s wealth by 7% for several reasons. Nearly all real estate here has risen in value in the past year. The tower still isn’t certain but appears more likely. And Harrah has other big projects going in other markets.
Harrah plans a 35-story luxury condominium tower in downtown Honolulu, dubbed The Pinnacle Honolulu. He envisions a slender high-rise, averaging about two condos per floor for a total of 50.
Last June, Harrah paid $4 million for the 13,637-square-foot site.
Harrah owns 3 million square feet of downtown Santa Ana and Civic Center real estate. His buildings are about 95% leased. Based on market rates, the portfolio is worth more than $400 million.
Factoring in debt and other real estate Harrah owns in Arizona, Wyoming and Hawaii, we’ve come up with a $375 million estimate for him.
The Santa Ana tower is a variable. We’ve afforded Harrah some,but not all,the value for the recently approved project, dubbed One Broadway Plaza. We could up Harrah’s estimate next year if he lands a major tenant for the 518,000-square-foot building, which is a couple years away from being constructed.
Word is he’s courting two big tenants, Microsoft Corp. and SBC Communications Inc.
In the past decade, Harrah single-handedly has redeveloped much of Santa Ana, painstakingly restoring historic buildings. His latest include a theater and Original Mike’s, a restaurant at the site of an old Buick dealership.
Harrah is loved and hated in the city. Supporters call him a savior. Critics say he’s changing downtown for the worse with his tower. His Caribou Industries Inc. develops, builds and manages properties, doing about $40 million a year in revenue.
With a ZZ Top beard, Harrah’s something of an eccentric. He stands 6 feet, 6 inches tall, weighing 280 pounds. He has piloted his Cobra helicopter in aerial stunts in “Austin Powers: Gold Member,” “The Hulk” and “The Siege.” He’s a deputized reserve for Orange County Sheriff Mike Carona and has pledged his helicopter services to the county in case of a terrorist attack or other disaster.
By age 25, Harrah made a small fortune building apartments in Riverside. He went on to develop a Lake Havasu resort, shopping centers, hotels, golf courses, condominiums and other projects, earning him millions.
Another Havasu deal pushed Harrah to bankruptcy in 1990. He had to rent a room from his mother-in-law in Garden Grove to get by. He emerged from bankruptcy and turned to Santa Ana at a time when others had left the city for dead.
These days, Harrah owns homes on Newport Beach’s exclusive harbor islands. He’s a supporter of the Orange County High School of the Arts, where he’s given nearly $2 million and built the school’s campus. He also supports the Boys and Girls Club.
James Downey
Cofounder, former chief executive,
C & D; Aerospace Group
Estimated worth: $350 million
An aerospace buying spree has helped put a dollar value on the wealth James Downey has built at Huntington Beach-based C & D; Aerospace Group in the past 30 years.
About a month ago, France’s Zodiac SA agreed to pay $600 million for C & D;, which makes interiors for commercial and business jets.
With other owners and debt, the Business Journal estimates Downey’s stake to be worth about $350 million.
But don’t plan on Downey entering retirement.
Tom McFarland, who took over for Downey as chief executive of C & D;, now called C & D; Zodiac, said he wouldn’t be surprised if Downey returns to business.
“In my opinion, I think he definitely will,” McFarland said. “Being an entrepreneur is part of his fabric.”
Don’t expect a lot of fanfare if Downey forms another company.
Downey doesn’t yearn for the spotlight,rarely speaking to the media or, in general, making a fuss about how he built C & D.;
“He’s private about in terms of talking about what he’s doing,” McFarland said. “He sees it more as C & D; than Jim Downey.”
Downey formed the company back in 1972 when he and boyhood friend Toby Crowley bought a business that made aircraft holding tanks.
The watershed event for C & D; came in 1983 when it won a pact with TWA for overhead bins and sidewalls.
By 2004, C & D; had about $400 million in yearly sales. This year the company expects sales of $430 million to $450 million.
C & D; has locations worldwide, including Canada, Mexico, Brazil and France. It employs nearly 4,000 people, including more than 1,200 in Orange County.
The company’s growth was built on being a one-stop supplier for regional jet makers,and now larger players such as Boeing Co. and Airbus SAS. Some companies provide a piece or two of a plane’s interior. C & D; gives companies the whole shebang,from seats to ceiling panels.
“We make everything,” McFarland said.
Commercial aerospace,the crucial market for C & D;,saw healthier growth in 2004 after the 2001 terrorist attacks marked a steep decline for the industry. This year Boeing and Airbus have been pumping out press releases about orders for their jets. Everyone from screw makers to engine companies have benefited.
Downey and his partners sold at a time when many in the industry are looking to buy. Other OC companies have benefited.
In March, Portland, Ore.-based Precision Castparts Corp. said it would pay $194 million to buy Garden Grove-based Air Industries Corp. And Bellevue, Wash.-based Esterline Technologies Corp., which makes commercial and military electronics, displays, sensors and other products, paid $145 million for Buena Park’s Leach International Corp.
,Brian Womack
RONALD SIMON
RSI Holding Corp.
Estimated wealth: $300 million
The source of Ron Simon’s wealth may be in your kitchen, or maybe your bathroom.
His Newport Beach-based RSI Holding Corp. makes household cabinets and other products that are sold at Lowe’s and other big stores. The company counts yearly sales of more than $500 million.
We’ve always known Simon is wealthy,he’s been on our Other Centimillionaires list for years.
This year, we decided to put him on our main list after coming up with a valuation for his company, based on a look at rivals such as Virginia’s American Woodmark Corp., which, unlike RSI, is publicly traded.
In the past year, Simon has beefed up RSI with an acquisition and plans for a plant expansion. The company employs about 1,000 people locally and around 5,000 in all.
Last year, RSI bought Prestige Cabinets of Neodesha, Kan., for an undisclosed sum.
“The acquisition reflects an important step in RSI’s quest to become a market share leader in the kitchen cabinet industry,” Simon said in a statement.
And about a month ago, RSI said it would invest more than $9 million to double one of its plants in Lincolnton, N.C., to about 425,000 square feet.
The plant is part of RSI’s RSI Home Products Inc. unit, which makes and distributes cultured marble countertops and kitchen and bath cabinets.
This is the second time Simon has had his hand in building a business focused on kitchen and bathroom products.
In 1959, Simon took over his family’s business, Perma-Bilt Industries, in Los Angeles. He grew the business to become the largest maker of medicine cabinets, vanities and marble countertops, according to the Washington, D.C.-based Horatio Alger Association of Distinguished Americans Inc., which gave Simon the Horatio Alger Award earlier this year.
In 1987, he sold Perma-Bilt.
Simon stayed on the company board. But the owners rejected his ideas to cut manufacturing costs in the face of rising Asian competition and the emergence of big home improvement stores.
So, two years later, Simon resigned from the board and started RSI with the same business plan the owners had rejected.
Today, Perma-Bilt is gone.
Like others on our list, Simon is big in Republican politics. In 2000, he hosted then-presidential candidate George W. Bush at his Newport Beach home for a $25,000-per-couple, Western-themed dinner.
,Brian Womack
