The 25 wealthiest people in Orange County,including eight billionaires,count a collective $28 billion in estimated worth, according to the Business Journal’s fifth annual list.
Their combined wealth is more than the gross domestic product of Luxembourg. The Irvine Company’s Donald Bren, who easily tops the list, is estimated to be worth more than the economy of Brunei.
This year’s group, which includes one more person than last year, counts $4 billion more in wealth than 2004’s.
Much of the gain came from higher estimates with rising real estate and stock prices. In other cases, we upped estimates for some after coming up with what we feel are better reflections of their wealth.
The cutoff to make this year’s list is $300 million, up from $250 million last year. To crack the top 10, you’ll need at least $775 million, versus last year’s $700 million. The top five? $1.75 billion, up from $1.2 billion.
Our list appears on page 24. Our special report on OC’s Wealthiest starts on page 21.
Two people joined the billionaires on the list,bond fund manager Bill Gross and Oakley Inc.’s Jim Jannard,based on an analysis of how Forbes values them.
They bring the number of billionaires to eight from six last year.
Bren, chairman and owner of the Irvine Co., dominates the list, accounting for an estimated 28% of the group’s wealth.
We upped our estimate for Bren from $7.5 billion last year to $8 billion. Some of that is accounting on our part. The rest is rising valuations for offices, apartments, shopping centers and land for homes.
Our valuation of Roland Arnall, owner and chairman of Orange-based mortgage company Ameriquest Capital Corp., got a billion-dollar boost to $2.1 billion.
Even with a 75% increase from last year, we still consider our number a reasonable, if not conservative.
The figure is based in part on what we can glean from a smaller rival, Irvine-based New Century Financial Corp., which has a market value of $2.5 billion at recent check.
Arnall, a big political donor, recently was nominated by President Bush to serve as ambassador to the Netherlands.
Another Ambassador?
If confirmed, Arnall would be the second from our list to serve as an ambassador after George Argyros, who represented the U.S. in Spain up until last year.
Another big gainer was William Lyon, chief executive of Newport Beach-based homebuilder William Lyon Homes Inc.
Our estimate for Lyon this year is $675 million, up from $500 million. Shares of his company have soared on Wall Street in the past year, though the rise has been bittersweet for Lyon, known as the General.
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%.
The list, which isn’t easy to break into, includes three newcomers.
The highest debut is No. 20 Maurice McAlister, chairman of Newport Beach-based Downey Financial Corp.
Like others on our list, McAlister doesn’t live here, but his wealth comes from here. McAlister lives in Bullhead City and comes to Downey for board meetings and other business.
With a 20% stake in Downey, McAlister is conservatively valued at $425 million. The savings and loan operator had a market value of $2 billion last week.
Two manufacturing entrepreneurs are the other newcomers.
No. 24 James Downey recently saw his life’s work,Huntington Beach-based C & D; Aerospace Group,sell to France’s Zodiac SA for $600 million.
We’re estimating Downey’s wealth at $350 million as a result of the sale.
Downey and a longtime friend started C & D; in 1972. This year, the business expects about $450 million in sales of aircraft interiors and other products to Boeing Co., Airbus SAS and others.
Simon and RSI
No. 25 Ronald Simon checks in at an estimated $300 million with his Newport Beach-based RSI Holding Corp., a maker of household cabinets and other products.
Simon started the company in 1989 after differing on strategy with the buyers of his family’s business, Perma-Bilt Industries.
Simon saw rising Asian competition and came up with a low-cost manufacturing model. Instead of implementing it at Perma-Bilt, he did so at RSI. Now Perma-Bilt is gone and RSI counts yearly sales of $500 million.
Entrepreneuers, from Simon and Downey to Broadcom Corp.’s Henry Sameuli and Henry Nicholas, make up a big part of our list.
“Wealth is concentrated where people think they can run a business,” said Joel Kotkin, author of “The City: a Global History” and an Irvine Fellow at the New America Foundation.
Immigrants also are well-represented at nine of the entries, including No. 2 Ernest Rady who’s from Canada and No. 18 Anthony Maglica, who was born in New York, raised in Croatia and returned to New York knowing little English.
“OC has been very fortunate in that it has attracted all sorts of immigrants,” Kotkin said.
Methodology
To come up with our list, we’ve spent weeks looking into individual holdings, company assets, public records and press clippings and talking with trusted sources.
Even so, our listing comes with caveats.
Like the Forbes 400 and similar listings, our numbers are conservative, ballpark figures. We’ve done our best to catalog assets, factor in debt, determine the cost of exercising stock options and account for other factors.
But only the people on our list and their advisers know their true value.
Nor is our listing all-inclusive. We’ve done our best to track down who we believe are OC’s wealthiest people. But we are sure to have missed some. We look forward to comments on those we may have missed.
We’ve already got our eye on one person: Howard Phanstiel, chief executive of Cypress-based PacifiCare Health Systems Inc., who’s set to get up to $200 million in cash and stock upon the company’s $8 billion sale to UnitedHealth Group Inc.
Our definition of “worth” includes stocks, real estate and other assets held by individuals after debt, stock and other factors. It includes shares or other assets held in family trusts or family-owned corporations controlled by an individual.
Our lists are limited to people who live here or derive most of their wealth from companies in OC.
For those on our lists: We know you’re likely to get calls from everyone from financial planners to long-lost cousins. That’s certainly not our intent.
Our goal is to showcase how entrepreneurial efforts, education and risk-taking can be handsomely rewarded.
