OC 20:
Inside the Wealthiest Here: Real Estate, Technology, Inheritances,Even Hot Pockets
No. 1
Donald Bren
Owner, chairman,
The Irvine Company
Estimated Worth: $7 billion
Don Bren didn’t grow a billion dollars richer in the past year.
We decided to raise our estimate of Bren’s worth from $6 billion,where it’s been for the past two years,primarily because of better accounting of his holdings and their market value.
We’ve always suspected Bren is worth more than $6 billion. This year we could justify raising him based on our better number crunching and some real estate appreciation. Even so, we still feel $7 billion is conservative.
Interestingly, Forbes still has Bren at $4 billion, where he’s been for the past few years.
Our change widens the gap between Bren and the next wealthiest men in Orange County, Broadcom Corp. cofounders Henry Samueli and Henry Nicholas. The two Henrys have enjoyed resurgence in their wealth with an uptick in Broadcom’s stock, despite July’s pullback. But Bren still comes in at double Samueli and Nicholas combined.
Bren’s wealth comes from a real estate portfolio of unrivaled size for an individual in California and perhaps the country. He’s benefited from good fortune and his own business acumen and daring.
His empire includes 359 office and industrial buildings, 32 retail centers, 82 apartment complexes, two hotels, four marinas and three golf courses. He’s said to shun stocks.
Bren’s investment properties come in at about 30 million square feet. His holdings of developed or developable land are estimated at 25,000 acres in OC.
Among Bren’s holdings: a good part of the 5,000-acre Irvine Spectrum and Newport Center, half of the 185-acre University Research Park 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 Los Angeles, San Diego and Silicon Valley. In March, Bren paid an estimated $135 million for Symphony Towers, a downtown San Diego trophy tower.
Bren’s diverse real estate portfolio has helped him weather the downturn. Granted, there’s a lot of empty space in the Irvine Spectrum, which has a 20% vacancy rate. But Bren continues to command premium prices for lots he sells to homebuilders and wealthy buyers at Shady Canyon, Turtle Ridge and Quail Hill.
His Irvine Apartment Communities arm is developing key sites in Irvine and a big project in Silicon Valley. The apartment market still is soft,people are buying homes with interest rates so low,but there are no signs of hurting.
And Bren’s malls and shopping centers are enjoying strong demand from consumers who keep spending, aided in part by refinanced mortgages.
For the most part, Bren’s moves have been solid. The company has about a million square feet of space in Milpitas that’s leased to Cisco Systems Inc. but never has been occupied,more Cisco’s problem than Bren’s.
And he’s fighting Sweden’s IKEA International AS for allegedly violating a lease at The MarketPlace in Tustin, which the furniture retailer bailed on earlier this year for larger space in Costa Mesa.
Bren has been a great patron of the University of California, endowing more chairs than any other donor. He has given more than $21 million to UC Irvine alone.
After graduating from the University of Washington and a stint in the Marines, Bren got his start in real estate. Early on, he formed Bren Co., a homebuilder now called California Pacific Homes. With partners, in 1963 he formed Mission Viejo Co., which was sold to Phillip Morris Cos. in 1972.
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
No. 2
HENRY NICHOLAS
Cofounder, Broadcom Corp.
Estimated worth: $1.6 billion
No. 3
HENRY SAMUELI
Cofounder, chairman,
chief technical officer,
Broadcom Corp.
Estimated worth: $1.55 billion
Henry Nicholas and Henry Samueli don’t work together anymore. But their wealth still is tied to the chipmaker they started in 1991.
The founders of Irvine-based Broadcom Corp. repeat in the No. 2 and No. 3 spots this year. This year’s resurgence in Broadcom’s stock, even after July’s pullback, has lifted their fortunes up from about $1.2 billion apiece last year.
We put Nicholas slightly ahead of Samueli at $1.6 billion.
We’ve done so to try and reflect what our sources say are good investments Nicholas has made in real estate and other areas. And Samueli has given away more money than Nicholas.
Nicholas stepped down as Broadcom’s chief executive in January amid changes at the chipmaker and to spend time with his family.
At their 2000 peak, Nicholas and Samueli were worth about $8 billion each. The two struck gold when their original stakes in the company went public in a bang-up 1998 public offering.
Today, both men own about 31 million shares of Broadcom and a third each of the voting stock. Nicholas also resigned his board seat in May.
After a stock downturn last month prompted by fears of more competition, the Broadcom holdings of the two check in at about $700 million each.
We valued their wealth higher after looking at several years of stock sales and compensation. In 2000 alone, both executives cashed out about $500 million in Broadcom shares.
This year, Nicholas has been steadily exercising options and selling shares.
He’s likely OC’s richest stay-at-home dad. In recent months he has been going on family vacations and doing parent volunteer work.
He’s rumored to be working on new ventures, regularly flying in his private jet to business meetings.
Samueli, meanwhile, says he’s happy as the master designer behind Broadcom’s chips and has no plans to leave.
In Broadcom’s heyday, the quiet, thoughtful Samueli and hard driving, outspoken Nicholas were opposites who clicked. It proved to be part of Nicholas’ exit, as his cocksure personality put off customers and soured workers and board members, sources say.
The two 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.
Nicholas also has donated to UCI and other causes.
,Andrew Simons
No. 4
Ernest S. RADY
Chairman, chief executive, Westcorp Inc.;
chairman, WFS Financial Inc.;
chairman, chief executive,
American Assets Inc.
Estimated worth: $1.5 billion
We’ve always known Ernest Rady is super rich. But this is the first time he makes it onto our list, thanks to a surge in the stock of Irvine-based Westcorp, holding company for Western Financial Bank and parent of auto financier WFS Financial Inc. in Irvine.
His stakes in WFS and Westcorp,he owns more than two-thirds of the parent company,check in at more than $1.2 billion, including shares he owns through his San Diego-based American Assets Inc., a real estate development and insurance company.
That’s why we decided to list Rady this year. Even though he lives in La Jolla, a good chunk of his wealth comes from here.
With real estate in San Diego, investments in his native Canada and other ventures, we conservatively estimate Rady’s total worth at about $1.5 billion. American Assets is privately held, so getting a read on its value isn’t easy. But the company’s real estate and insurance holdings are sizable.
Rady’s business dealings don’t end there. Last year, he sold his 53% stake in oil producer Summit Resources Ltd. to Paramount Resources Ltd., both of Calgary, Alberta, as part of Paramount’s $225 million buy of Summit.
In 2001, Rady sold his stake in San Diego’s Coast Distributing as part of Anheuser-Busch Cos.’ buy of the beer distributor.
Grandfatherly Rady, who shuns publicity, cofounded Westcorp in 1972 and has been its driving force since then. The 65-year-old comes to the company’s Irvine office once a week or so and regularly meets with clients and investors.
Despite his low profile, Rady and his wife, Evelyn, are known in San Diego for their giving. In 2000, the couple 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 Dr. Max and Rose Rady, his parents.
At the Congregation Beth Israel synagogue in San Diego’s Golden Triangle area, an administration center is named for the Radys. They also are big supporters of San Diego Performing Arts League. Ernest Rady is a trustee of the Salk Institute for Biological Studies.
,Michael Lyster
No. 5
George Argyros
Ambassador to Spain;
owner, Arnel & Affiliates;
limited partner, Westar Capital LLC
Estimated Worth: $1 billion
George Argyros, one of Orange County’s richest men, is gelling well with Spain’s elite, according to a high-level dispatch from Madrid.
“Spain’s wealthy live at a level only people like Argyros live at,” said Michael Liikala, counselor for commercial affairs at the U.S. Embassy in Madrid. “The wealth in Spain among these players is extraordinary. Very few people and very few Americans know how to talk and live in that world.”
The ambassador to Spain made his fortune here in apartments and commercial real estate and later venture capital and stock investments.
Before Argyros’ 2001 appointment, he was chairman and chief executive of Costa Mesa-based real estate developer and owner Arnel & Affiliates. He still owns the company and is a financial backer of Westar Capital LLC, a Costa Mesa venture capital firm he started.
By our estimate, real estate makes up half of Argyros’ wealth. The rest comes from Westar and an extensive stock portfolio that includes holdings in Santa Ana-based First American Corp. and Kansas City, Mo.-based DST Systems Inc. (an early Westar investment).
One of Argyros’ stocks, Valencia-based Newhall Land and Farming Co., got a pop last month on a buyout offer from Lennar Corp. and LNR Property Corp.
As ambassador, Argyros isn’t involved in the day-to-day doings of his companies, though he retains ownership and oversight.
His financial-disclosure report filed before becoming ambassador put his assets as high as $2 billion. After factoring in real estate debt and stock fluctuations, we feel $1 billion is an accurate ballpark estimate of Argyros’ wealth, which we left unchanged from last year.
His real estate holdings include 5,400 apartments and more than 2 million square feet of office, industrial and retail space. Among them are the 280,000-square-foot Metro Pointe in Costa Mesa and the 356,000-square-foot Puente Hills Business Center in Industry.
Argyros has homes at Newport Beach’s Harbor Island, Indian Wells and Sun Valley, Idaho. These days, he lives in a four-bedroom suite on the second floor of the ambassador’s home next to the U.S. Embassy in Madrid. His days are filled with visits by dignitaries, government officials and other guests.
His ambassador appointment topped years of Republican fundraising, including $30 million for the Bush campaign. (In 1990, then-President Bush appointed him to the Federal Home Loan Mortgage Corp. board.) Argyros was the most prominent backer of an El Toro airport.
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
No. 6
ANNE CATHERINE
GETTY EARHART
Heiress to J. Paul Getty
Estimated worth: $775 million
No. 6
CAROLINE GETTY
Heiress to J. Paul Getty
Estimated worth: $775 million
Anne Catherine Getty Earhart and sister Caroline Getty are intensely private heiresses of late oil tycoon J. Paul Getty. They are two of the nation’s richest women and are among 16 grandchildren of the autocratic billionaire.
We’re pegging both at $775 million, based on Forbes’ numbers and conservative estimates of how their fortunes have fared.
Earhart, a 50-year-old Laguna Beach resident and giver to environmental causes, 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. She sits on the California board of trustees for the Nature Conservancy.
Sister Caroline, also an ardent environmentalist, drew attention in 2002. That’s when she said she was the mystery donor behind $1 million given to the Nature Conservancy in support of two California parks bonds. Caroline, a Corona del Mar resident, listed her donations under “Rosebud LLC” and “Wild Rose LLC.”
It’s unlikely Caroline, called a “down-to-earth nature lover,” would have come forward had the donations not been criticized for their anonymity.
Caroline, 45, 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.
J. Paul Getty 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.
A renowned tightwad, Getty used his will to secure his four sons’ loyalty. He reportedly changed his will 21 times.
In 1985, settlement of a nine-year battle over Getty’s will resulted in Anne Catherine, Caroline and one other daughter of his late son George Franklin Getty II sharing $750 million. 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 selling the trust’s 40% share of Getty Oil to Texaco in 1984. The sale went through in 1986 for $10 billion. Caroline and Anne Catherine got another $400 million each from the sale.
,Sherri Cruz
No. 8
James Jannard
Founder, chairman, chief executive,
Oakley Inc.
Estimated worth: $700 million
Jim Jannard has all the trappings of a multimillionaire. He even owns his own island and has a racecar and other big toys.
The founder of Foothill Ranch-based Oakley Inc. splits his time between OC and Spieden Island, Wash., a getaway he bought in 1997 for $22 million.
Since 1996, Jannard has foregone a salary while buying stock. In September, he bought 250,000 Oakley shares for about $2.4 million.
In all, Jannard owns nearly 43 million shares, worth about $430 million at recent check. We estimate him at $700 million to try and account for past stock sales, including $170 million during the company’s 1995 initial public offering and $200 million worth in 1996.
Our estimate still is lower than Forbes’ most recent listing for Jannard, which put him at $1.2 billion. We presume Forbes’ number was derived at a time when Oakley’s stock was flying higher than it is today. The company’s shares are off 60% from their early 2001 high and off 30% in the past year.
Jannard,a blunt, cigar-smoking Univers-ity of Southern California dropout,shows up at stockholder meetings wearing Oakley shorts, a T-shirt and athletic shoes. He has a shaved head, as do most of his male Oakley colleagues. He’s donned radical Oakley headpieces, such as an over-the-head contraption with fake dreds shooting out the back.
Besides sunglasses, Jannard’s passion is drag racing. His company backs Mohawk-wearing Scotty Cannon and other drivers who compete in Oakley’s Time Bomb racecar, which inspired a limited edition wristwatch.
“The goal of having the fastest car in the world is a personal choice I made,” Jannard told shareholders at a recent meeting.
The financial cost to Oakley is “microscopic,” according to Jannard.
Most racing expenses “come out of my pocket,” he said.
Jannard is pushing the company’s bid to go from “best sunglass” brand to “best consumer” brand with shoes, clothes and other offerings. But the ride hasn’t been easy.
The company faces a tough retail climate compounded recently by bad weather. Second-quarter sales were flat at $143.8 million from a year earlier.
Oakley now expects 2003 sales growth of about 10%, down from a prior estimate of 15%.
Jannard still is bullish.
“I’ve been really careful with what I’ve asked for with Oakley,” he said. “And we have the tools to get there. There are always obstacles. But the question for you is, ‘Are you betting we’re going to get past the obstacles?’ I am.”
In 1975, Jannard started peddling motorcycle handle grips from his station wagon, moving on to goggles and then sunglasses,still Oakley’s bread and butter.
He is a reclusive to the extreme and rarely grants interviews or photos, though he’s a photography buff himself. He raises “Oakley English Setter” show dogs (the company name is taken from his favorite dog breed).
,Jennifer Bellantonio
No. 9
Paul Merage
Cofounder, former chief executive,
Chef America Inc.
Estimated worth: $600 million
You could call Paul Merage Orange County’s nouveau riche.
The cofounder of Chef America Inc., maker of Hot Pockets and other frozen foods, is said to have had a house here for a while.
But after selling Colorado-based Chef America to Nestl & #233; SA last year for about $2 billion, Merage now lives most of the time in OC, where he manages his family’s investments from Irvine.
We’re estimating Merage’s wealth at $600 million,a little higher than Forbes’ $550 million,assuming some gains on investments.
Merage could be worth more. Getting a read on how much he owned of Chef America isn’t easy. Merage himself shuns publicity. It’s believed he and his brother, David, Chef America’s other founder, owned most of the company.
The brothers came to the U.S. from Iran in the early 1960s. After graduating with a master’s in business administration from the University of California, Berkeley, Paul went to work at Maxwell House, now part of Kraft Foods Inc., and later Hunt-Wesson, now part of ConAgra Foods Inc.
He teamed up with his brother in 1977 to start Chef America in Chatsworth. Paul took out three mortgages on his Encino home and borrowed money from relatives, according to the Wall Street Journal. The brothers first sold frozen Belgian waffles to schools and coffee shops.
The proliferation of microwaves led the brothers to develop frozen snacks that could be made in minutes. Other trends helped propel Hot Pockets: more women at work, people eating on the run and “grazers” eating throughout the day instead of sitting down for meals.
The first offerings, pepperoni pizza and ham and cheddar Hot Pockets, were sold in convenience stores. They hit grocery stores in 1994. Since then, there have been low-calorie and breakfast versions of the calzone-style sandwich.
Today, Hot Pockets are an American staple like macaroni and cheese.
Before Chef America was sold, the company’s yearly sales were estimated at more than $700 million.
Hot Pockets’ prevalence in supermarkets and home freezers caught Nestl & #233;’s eye. The Swiss consumer products company looked at buying Chef America as early as a decade ago.
A few years back, Chef America put itself up for sale, but the Merage brothers balked at offers of about $1.5 billion, according to the Wall Street Journal.
Paul Merage seldom has granted interviews or made his picture available for the media, even during the high-profile Nestl & #233; buyout.
,Michael Lyster
No. 10
DAVID SUN
Cofounder, chief operating officer,
Kingston Technology Co.
Estimated worth: $550 million
No. 10
JOHN TU
Cofounder, president,
Kingston Technology Co.
Estimated worth: $550 million
You’d never guess this pair struck it rich.
David Sun and John Tu, who run big memory products maker Kingston Technology Co. in Fountain Valley, are known for shunning ties and sitting in cubicles along with everyone else.
Sun, a golfer, lets employees bring clubs to work and take swings at a driving range behind Kingston’s main building.
The duo made their fortunes after selling 80% of Kingston 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.
We’ve pegged Sun and Tu at $550 million apiece, up slightly from $500 million last year. Memory prices have rebounded somewhat in the past year, boosting the company’s value. Kingston’s sales also have improved, hitting $1.4 billion last year.
Both men shy away from the public eye. Sun doesn’t often give interviews and once stood up a Forbes writer. Tu is a little more open but still keeps a low profile.
Tu is the soft-spoken public face of the company, while Sun is the hard-core operations man. Tu drives a Mercedes, while Sun drives a Chevy Suburban. Tu lives on the ritzy Palos Verdes peninsula. Sun calls Irvine’s modest Woodbridge home.
In 1996, the two made headlines when they handed out $100 million in bonuses to workers after selling the company to Softbank.
It’s hard to be nice all the time. In the past year, the duo was forced to cut benefits, halt bonuses and lay off workers for the first time.
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. The pair lost $7 million after entrusting it to a friend to invest in 1987.
After that they started Kingston. While building the company, the two were said to forego contracts and instead struck deals on handshakes.
Both 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.
,Andrew Simons
No. 12
Anthony Maglica
Owner, founder, president,
Mag Instrument Inc.
Estimated worth: $500 million
Anthony Maglica of Ontario’s Mag Instru-ment Inc. is the flashlight king whose products have spawned imitators and lawsuits,even against two rivals who were like sons to him.
Last year, Maglica, who lives in Anaheim Hills, was awarded $1.2 million from brothers Stephen and Christopher Halasz and their Bison Sportslights LLC in Englewood, Colo. The Halasz are the sons of Maglica’s former common law wife, Clarie Halasz, who waged a bitter palimony case against him in the 1990s.
“I felt betrayed,” Maglica said in published reports at the time. “I raised these boys for much of their lives. I paid for all their education. What happened here I wouldn’t expect in a million years to happen.”
Maglica sued the Halasz brothers, charging them with trying to lure away workers and stealing trade secrets they learned while working at Mag. Maglica also took aim at their claim to have eliminated the “black hole”,that little black circle in the center of flashlight beams.
Before starting Bison, Christopher worked at Mag for six years, primarily in research and development. Stephen was a partner at the Denver law firm of Sherman & Howard, representing Mag for nearly a decade.
The case was laden with drama, including countercharges that each side was out for blood.
Today, Bison is regrouping after the jury ruling, which wiped out most of its product line at the time, Stephen said. The company plans to come out with some new flashlights this fall, he said.
In 2000, Maglica settled an eight-year palimony fight with Claire for $29 million. She lived with Maglica for 23 years and shared his last name for a time, though the two never wed. Clarie worked at Mag Instrument in personnel and marketing.
In the 1970s, Maglica’s first (and official) wife received half of his assets in a bitter divorce.
By the end of the court fight with Clarie, 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.
Mag counts 850 workers in Ontario in some 450,000 square feet of space.
In January, the company won a $113,000 judgment against Japan’s Asahi Electric Corp., which made cheaper flashlights that looked like Mag’s.
Born in New York in 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.
In 1950, Maglica returned to the U.S., though he spoke no English. Most of his training came while working as an experimental machinist. By 1955, he managed to save $125 to buy a lathe and start his own machine tool business.
Maglica made precision parts for industry, aerospace and the military, earning a reputation for quality. The company’s trademark flashlight was introduced in 1979. In 1993, Maglica rescued a blinded boy, his mother and sister from the war zone in Bosnia.
Last year, Mag gave $25,000 to the National Fallen Firefighters Foundation.
,Michael Lyster
No. 12
Igor Olenicoff
Owner, founder, president,
Olen Properties Corp.
Estimated Worth: $500 million
As if in a classic American tale, Igor Olenicoff made a fortune here after he and his family fled Soviet Moscow and landed in America by way of Iran in 1957.
His Olen Properties Corp. owns 4.5 million square feet of office and industrial space from Brea to San Clemente. The company also has 10,500 apartments in Las Vegas, Phoenix and South Florida.
And Olenicoff also has another play: He’s teamed with Hadi Makarechian of Newport Beach-based Capital Pacific Holdings Inc. to develop a colossal masterplanned community on more than 20,000 acres in Colorado. Plans call for 70,000 homes and more than 60 million square feet of commercial space. The move ensures Olen land to build on as space in OC shrinks.
His latest venture is the acquisition of 1,200 masterplanned acres in South Florida, including a golf course and 1,500 sites for homes.
The lots are being sold to homebuilders, with half already sold. Olenicoff plans to keep the golf course as a long-term investment for his company.
Also in South Florida, Olenicoff is building a big entertainment and retail center as part of a venture with a Canadian partner.
Olenicoff’s prime OC holdings include Olen Point Brea, Irvine’s Spectrum Technology Center and Spectrum Pointe in Lake Forest. Last year, he finished the 100,000-square-foot Orchard Technology Park in Lake Forest.
Also this past year, he picked up the One Venture and Two Venture buildings in the Irvine Spectrum.
His company also owns vacant land set to house another 1.25 million square feet. He’s set to start this year on a five-story, 135,000-square-foot building at Olen Pointe Brea.
Olenicoff is regarded as a shrewd businessman who knows how to get around obstacles to get his projects done, including using other entities to buy land.
Earlier this year he prevailed in a tax dispute, settling with the Internal Revenue Service for $272,024 in back taxes. The IRS originally sought $148 million.
Olenicoff worked his way through the University of Southern California, where he graduated with four degrees,a bachelor’s in finance and engineering, a master’s of business administration and a master’s in statistics and quantitative analysis.
His parents fled Soviet Russia due to family ties with Czar Nicholas II. The family fled to Iran, where they stayed for nearly 15 years. Olenicoff attended missionary school in Tehran, where he became fluent in English, Russian and Farsi. He came to the U.S. in 1957.
,Mathew Padilla
No. 12
JANIE TSAO
Cofounder, vice president of
business development,
Linksys Group Inc.
Estimated worth: $500 million
VICTOR TSAO
Cofounder, chief executive officer,
Linksys Group Inc.
Newly minted technology multimillionaires still happen.
Victor and Janie Tsao sold Irvine consumer networking products maker Link-sys Group Inc. to Cisco Systems Inc. in March, becoming multimillionaires in the process.
We’ve put Victor and Janie at a collective $500 million.
We arrived at our figure by dividing the $500 million Cisco paid for Linksys by the $14 price of Cisco shares at the time. That works out to 35 million Cisco shares. We then subtracted 10% for stock options awarded to workers. We allocated the balance to the Tsaos and factored in a rise in Cisco’s shares after the deal closed.
Our figure is conservative and doesn’t include other investments the Tsaos may have.
The Tsaos are humble, shying away from talk of their wealth. For many years, while they grew Linksys, the couple lived in a modest house in Irvine.
Only in the past couple of years as Linksys began to take off did the Tsaos splurge on a house in Newport Coast.
They live there with their two teenage sons,with whom Victor says he likes playing basketball.
Both consider themselves down to earth.
Following the Cisco buy, the couple didn’t splurge on new cars or a second home. They did take a trip to Egypt.
“It was a place we always wanted to go,” Janie said.
Victor says his biggest splurge is a leather jacket.
“I always wanted a leather jacket,” he told Inc. magazine. “Now I could afford it, but I don’t want one.” Janie said she enjoys spending time with her sons.
The Tsaos built Linksys from the ground up. The couple left cushy computer jobs in 1988 to start Linksys in their house.
The original goal for the company: 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. Linksys saw sales of $429 million for 2002 and expects to grow sales 30% this year.
The Tsaos get to run Linksys as a separate unit,the first time in Cisco history an acquisition has gotten to keep its brand.
For now, the Tsaos say they’ll stay at Linksys.
“Every day is like a vacation,” Victor said.
,Andrew Simons
No. 15
Joan Irvine Smith
Heiress to James Irvine
Estimated worth: $400 million
Joan Irvine Smith has fought to preserve open space in OC. Now she’s also joined the fight to preserve embattled Gov. Gray Davis.
Smith is among a handful of notables from OC who’ve given money to Davis’ anti-recall effort. She herself has donated $5,000 to the cause.
Smith has other fights on her hands. Alongside the Sierra Club and other environmental groups, she is trying to stop the Rancho Mission Viejo LLC’s plans for homes and other development on 25,000 acres in South County.
Her proposal: having environmentalists buy the land to preserve it. But Rancho Mission Viejo officials insist the land isn’t for sale.
In late 2001, Smith and Donald Bren found some common ground: 11,000 acres of permanent open space set aside by The Irvine Company.
“My grandfather would be so very, very pleased,” Smith said at the land dedication hosted by Bren.
Smith’s grandfather, James Irvine II, started The Irvine Company. Her great-grandfather, land baron James Irvine I, made his wealth in the California Gold Rush and assembled 120,000 acres of what now is OC.
Smith herself once was a dissident on the Irvine Co. board. Her lawyers fought for eight years over how much Bren should pay Smith and her now-deceased mom, Athalie Clarke, for their shares in the company.
They settled on $256 million in 1991 and have remained cordial since then.
Based on input from sources, we’re putting Smith’s estimated worth at $400 million.
Smith has emerged as a force when it comes to development and environmental issues.
She played a big role in scuttling plans for pricey new cottages at Crystal Cove State Park. She opposed a proposal to extend the Foothill (241) Toll Road through undeveloped hillsides to San Clemente, near Smith’s horse estate. And she worked with environmental groups to urge the Orange County Sanitation District to implement secondary treatment standards on wastewater.
But Smith still has a little developer in her: Two years ago she placed her two acres of bluff-top land in Laguna Beach up for sale at about $40 million.
Known for her philanthropic endeavors, Smith has given millions to environmental causes such as water research and to various local charities, including the Reeve-Irvine Research Center at the University of California, Irvine.
She spearheaded efforts to donate 1,000 acres of land to the University of California that later would become the UCI campus. This year, she’s loaned some of her personal collection of oil paintings for a traveling art exhibit that runs through September to promote preservation of California’s natural beauty.
A noted horsewoman, Smith has bred, sold and showed world-class horses at her farms in San Juan Capistrano and Virginia. She recently turned over management of her two horse shows to R.J. Brandes, chief executive of Blenheim EquiSports of California LLC.
She once was married to the late Morton “Cappy” Smith, a competitive horseman.
Smith has co-authored two books on California history: “California, This Golden Land of Promise” and “Reflections of California.”
Gov. Davis declared March 20, 2002, as Joan Irvine Smith Day for her contributions to the arts and historical preservation.
,Sherri Cruz
No. 15
VINCENT SMITH
Chairman, chief executive,
Quest Software Inc.
Estimated worth: $400 million
Vincent “Vinny” Smith could get richer, if industry speculation is to be believed.
Rumors floating around Wall Street have his Quest Software Inc. as a candidate to be bought in a wave of consolidation sweeping the software industry. Quest could fetch a 30% premium above its recent market value of $800 million.
Smith became a multimillionaire,and, for a while, a billionaire,after Quest went public in 1999.
From 2001 to 2002, Smith saw a 70% decline in the price of his Quest shares, putting his wealth at an estimated $400 million.
Our figure reflects Quest’s improved market value since last year, despite a recent pullback. On a smaller scale, it also tries to reflect some of Smith’s other investments, which aren’t as easy to get a read on.
Known as a savvy investor, Smith says he likes to dabble in a variety of investments, such as the stake he recently took in Fusion International, a local surfwear venture.
“I like to try new things,” he said.
Smith also has various real estate holdings and has a stake in at least 20 restaurants, among other ventures.
“If I like a company, I’ll buy a 10% to 25% stake,” he said.
Before joining Quest, Smith made an initial fortune by helping to start Patrol Software, which BMC Software Inc. bought in 1994. He went on to serve as BMC’s director of open systems, managing sales operations.
From 1987 to 1992, Smith worked at Oracle Corp. in sales management positions.
In 1997, Smith grew bored with the Colorado ski slopes and came on to replace Quest cofounder David Doyle as chief executive. In 2000, he was named an Ernst & Young Entrepreneur of the Year.
Smith is the quintessential tech executive: casual, outgoing, athletic. He’s said to regularly come to Quest’s Irvine Spectrum tower headquarters in jeans, a T-shirt and a cap.
,Andrew Simons
No. 15
William Gross
Chief investment officer,
managing director,
Pacific Investment Management Co.
Estimated worth: $400 million
Bill 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 Albertsons offering to manage money.
Today Gross manages $360 billion in assets, including the $75.8 billion Pimco Total Return Fund. The chief investment officer of Newport Beach-based Pacific Investment Management Co. made a fortune when German insurer Allianz AG bought the bond fund manager in 2000 for $3.3 billion.
At the time, Gross had a Pimco stake of more than 10%, according to sources. That alone would have been worth about $300 million. After Allianz bought the 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 estimating his worth at $400 million.
Gross was a leader in the formation of Pimco Advisors in 1994, which spun off from Pacific Mutual Life Insurance (now Pacific Life Insurance Co). Today, it is the world’s largest bond fund manager.
Gross has a different investing style known as “core plus” in which he also ventures into derivatives, options and even emerging market bonds.
He’s a marquee commentator on bonds and other matters, doing television feeds from Pimco’s own broadcast facility in Newport Center. Despite being dubbed as the king of bonds and the oracle of Orange County, Gross is soft-spoken, even humble.
This year, he’s made two local speaking engagements,one to accept the Business Journal’s Businessperson of the Year Honor and the other at a luncheon hosted by Women Investing in Security and Education. The outings are a rarity for Gross, who doesn’t like to leave Pimco’s trading floor during market hours.
Gross warns investors to get used to a new era of single-digit returns in which 5% is a realistic expectation for long-term gains on stocks and bonds.
From a Mediterranean-style home atop a Laguna Beach cliff, Gross starts nearly every day with a yoga session. He’s a slave to his routine, turning on his desktop computer monitors in the same order each day.
Gross funded the James Hines Foundation, which contributes $100,000 annually to OC Teachers of the Year. He donated $1.5 million to the Sage Hill, a private school in Newport Beach.
His online commentaries about the markets and the economy are well read. Earlier this year, the Vietnam veteran and self-described “Orange County Republican” came out against invading Iraq, saying an attack “may lessen our vulnerability but lose a piece of our soul.”
Another Gross prediction didn’t realize: Last September, he said the 7,000 Dow only was worth 5,000.
,Michael Lyster
No. 18
STEVE JOHNSON
Founding partner, chief executive,
Sage Hill Partners;
Cofounder, Johnson-Grace Co.
Estimated worth: $350 million
Steve Johnson hit it big after he and a partner sold Johnson-Grace Co. to America Online Inc. in 1996 for $70 million in stock.
In the next few years, Johnson’s AOL shares catapulted some 5,000%. After working at AOL for a while, he went on to start Cambridge, Mass.-based Sage Hill Partners and gave more than $1 million to Newport Beach’s Sage Hill School.
Johnson’s primary address is in Massachusetts, though he also has a Newport Beach home. We list Johnson because of his OC ties and because his initial fortune came from here.
Our estimate was derived with some input from Johnson two years ago. He hasn’t responded to more recent inquiries. Our estimate assumes he has sold AOL shares and put the money into other investments.
Johnson stayed on as an AOL vice president until mid-1999. That’s when he left to head and fund Sage Hill Partners. He’s also a limited partner at Waltham, Mass.-based Greylock Venture Capital.
Johnson’s ties here diminished in the past year. He was a director of Western Digital Corp.’s Keen Personal Media unit, which was shuttered last year. He also resigned his board seat at Irvine-based Go2 Systems Inc.
He no longer sits on the board of Cabin John, Md.-based The Wondir Foundation, a nonprofit group developing an advanced Internet search engine. The group is headed by former AOL colleague Matt Koll.
Johnson holds a U.S. patent, issued in 1999, for the image compression technology used in AOL’s service. Three years ago, he had looked at another Internet venture, called Amazilla.com, with colleagues from Johnson-Grace.
Johnson started Johnson-Grace with partner Christopher Grace and $75,000 in seed money in 1992. The two had planned on a public offering for the company but found the AOL deal more lucrative.
,Andrew Simons
No. 19
Kosti Shirvanian
Founder, Western Waste Industries
Estimated worth: $275 million
Linda Isle resident Kosti Shirvanian hit it big in trash in the 1990s.
Shirvanian grew a one-truck operation into a big regional trash hauler, Western Waste Industries of Torrance, which sold to USA Waste Services in 1996, which in turn bought Waste Management Inc. in 1998 for $19 billion and kept the Waste Management name.
At one point, Shirvanian was the largest individual investor in Waste Management. His stake registered as high as $500 million at one point. We’re estimating his wealth at about $275 million.
Shirvanian was among many Waste Management shareholders to sue the company after a series of insider trading and accounting troubles a few years back. The trash hauler eventually settled all shareholder lawsuits for about $500 million.
Since selling his business, Shirvanian has been quiet in recent years. He served for a while as a director of Atlanta-based holding company SATX Inc. but resigned last year before the company filed for bankruptcy.
These days, he works with Moreno Valley-based Smart Truck Systems, a maker of side-loading trash bodies for trucks and trash containers.
In the 1950s, the Iranian immigrant of Armenian descent started picking up trash in a battered Chevy truck.
He had planned to become a medical student but instead said he accidentally enlisted in the U.S. Army.
Shirvanian served an 18-month stint in Korea, where he saw combat action as a medic.
Shirvanian came to Southern California in 1955, where he and his sister, Savey Tufenkian, started a scavenging business around the time that many Armenians were setting up small waste-hauling companies.
Shirvanian drove the truck; she did the books.
The Shirvanian trash empire grew when he bought a rival’s route for about $800. By the 1990s, Western Waste was a regional player with more than 1,500 workers and a fleet of orange trash trucks. Yearly revenue at one point neared $300 million.
Then came the sale to Texas-based USA Waste Services for $525 million in stock. Under the deal, Western became a subsidiary of USA Waste, and, eventually, Waste Management.
In 1995, the Texas Legislature adopted a resolution honoring Shirvanian on the 40th anniversary of Western Waste Industries.
At one point, Shirvanian was a vice chairman and director of USA Waste. Those who know Shirvanian call him astute. In 1996, he came under scrutiny from FBI and Internal Revenue Service agents conducting a probe of suspected political corruption and bribery at Western Waste.
The company came up in the extortion trial of former Compton City Councilwoman Patricia Moore.
Her conviction came after a Western Waste vice president pled guilty to arranging for the company to pay $150,000 for a worthless parcel of land in Louisiana to obtain a landfill permit near Baton Rouge, according to press accounts at the time.
,Michael Lyster
No. 20
Duane Roberts
Chairman, chief executive,
Entrepreneurial Corporate Group
Estimated worth: $250 million
Maybe you’ve stayed with Duane Roberts.
The Inland Empire transplant to Orange County counts the stately Mission Inn in Riverside among his various ventures.
Roberts bought the landmark 235-room Mission Inn in 1992 for $16 million and saved it 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 June, 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 now is part of Tyson Foods Inc.
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 a big shareholder, later was bought by Zions Bancorp.
In the early 1980s, Roberts founded DRR Investments, which later became Entrepren-eurial Capital, an investment arm of Entre-preneurial Corporate Group.
In 2001, Entrepreneurial Capital kicked in $2 million in funding to help start Corona del Mar-based Miramar Venture Partners, the venture firm started by Bruce Hallett and others.
Roberts’ other interests include Entrepre-neurial Hospitality Corp., which runs the Riverside Convention Center, and Entrepreneurial Foods Group LLC, which owns four British companies.
Roberts has been active in the Republican Party for about 20 years and has been a top contributor to GOP campaigns.
He was among 249 contributors who gave at least $100,000 in support of President Bush and other Republican candidates. In the past decade, he’s given $400,000 to Republicans.
He also is involved in Olive Crest Treatment Centers, the Anaheim-based nonprofit for abused and neglected children. He started the group’s Inland Empire branch.
A few years back, he and his wife hosted a party for Olive Crest supporters at their 12,000-square-foot Laguna Beach home.
Roberts paid nearly $10 million for their bluff-top estate in 1998. He and his wife said they were attracted to the house because it reminds them of the French Riviera where they wed in the 1990s.
,Michael Lyster
