Charlie Zhang built his fortune in the restaurant business when he started fast-casual chain Pick Up Stix in 1989 in Rancho Santa Margarita—growing to 100 locations, then selling it in 2001 to TGI Friday’s owner Carlson Restaurants Worldwide for $50 million.
The businessman was just getting started. Not bad for a second passion.
Zhang’s first love had always been music, and after more than 40 years, he saw a chance to reconnect with his first, funded by his second, opening performing arts school OC Music & Dance in Irvine.
The school marked its one-year anniversary in April. In the first year, enrollment grew to 233 students, 47% under 18 on scholarship.
“Music is injected in my DNA, [but] I’m not going to be a musician, so I said I can give that chance to the next generation,” Zhang said.
The school offers group classes to students ages 5 to 18 in acting, dance, musical theater and public speaking, as well as private lessons in music and voice from nationally- and internationally-renowned instructors.
OC Music & Dance also promotes itself as the only nonprofit community arts school of its kind. The institution is focused on lowering the barrier to music and arts education for low-income families through its scholarship fund, which covers up to 90% of tuition for private and group classes.
Executive Chairman and Chief Executive Douglas Freeman said opening the door to every student, regardless of family income, convinced him to ditch retirement and head the school.
“We don’t need another music school [in Orange County] unless the purpose of this school is to provide the best in musical education to kids who can’t afford it,” he said. “No kid is denied access because they can’t afford it. If they can’t afford it, we pay, and if they can, then they pay.”
The school is funded by about 40% earned revenue and 60% donor support, said Freeman, who indicated it should be evenly split as enrollment increases, and this year’s revenue through mid-May is an estimated $896,000.
Freeman said the school’s in the process of creating an endowment. It currently has assets of $9.5 million and is working to create a $10 million scholarship endowment, having taken in just over $3 million in pledges so far.
“Our model is completely inverted, because we’d rather have the kids who can’t afford the $100 an hour,” he said.
“The revenue from the kids who can will just about keep the lights on, but it’s not going to cover all your costs. Charlie and I have committed to endow the place, and we’ve already started that process so that this place is self-sufficient permanently.”
Center Stage
OC Music & Dance happened by chance. Zhang, who serves on the Pacific Symphony board, heard that the orchestra’s lease at its then-Santa Ana location would be up in a few years.
Symphony Vice President of Development and External Relations Gregory Pierre Cox said its roughly 8,000-square-foot office there was in pretty bad shape.
“Charlie decided it was time for us to move. We were cramped, one on top of the other,” Cox said. “We had furniture from the Salvation Army. We’re not for-profit, so we like to have our money go to musicians, but it was really rough.”
Zhang purchased the 35,418-square-foot former Western Growers Association building off MacArthur Boulevard for $8.2 million, or $231.52 per square foot, according to CoStar. He gutted it to house the symphony. But the symphony said the space was too big, so he carved out 15,000 square feet for its new office—charging it the same rent as its former headquarters—and decided to use the remaining space for the performing arts school, spending $6.4 million to retrofit it.
Freeman said he was dumbfounded when he heard the news. The retired tax attorney helped build First Foundation Bank in Irvine and was the brains and zeal behind National Philanthropy Day, proclaimed by President Ronald Reagan in 1986. Freeman’s a lawyer by training but built a career in organizational management consulting to schools, such as the California Institute of the Arts.
“Charlie came with a vision and capacity, and as you may guess, tenacity and persistence to do something, and no one was going to stop him,” said Freeman, who despite a resume rich in counseling on leadership, is running his first operation.
“I made one request of Charlie. Complete autonomy. He gave it,” Freeman said.
The center features eight private music rooms, three dance studios, two classrooms, a recording studio, a 150-seat theater and the Monkey Business Cafe, which is run by at-risk and foster youth. Each room features security cameras so staff and parents waiting in the lobby can watch children during classes.
It’s also used by more than 11 local organizations, such as the Southern California Children’s Chorus, which rehearses in its theater. The school also supports teachers in the Newport-Mesa and Irvine school districts to help with music instruction, as well as opening a site this year at the Salvation Army in Santa Ana to host classes.
“We started at a high level,” Freeman said. “We didn’t crawl up, which is what you have to do when you’re undercapitalized and you don’t have enough personnel. We started with five people, and we just took off.”
First Chair
Zhang, president of Laguna Niguel-based real estate investment company Zion Enterprises, is completing a circle with his latest venture.
Born in Shanghai, his father owned a coffee roasting company but was sent to prison for 20 years under China’s communist regime when Zhang was 2. As a teenager, Zhang was one of the estimated 16 million urban youth sent to the countryside to work in the rice paddies during Mao Zedong’s Cultural Revolution. He worked for seven years and spent the time cherishing his brother’s clarinet, which he practiced playing in the fields at night.
In 1980, he arrived in the U.S. carrying his clarinet and $20 to attend Pasadena City College on a music scholarship.
He found a job as a dishwasher at Yen Ching in Old Towne Orange.
“Within six days, I cut my finger,” he said, showing the long scar. “My finger was damaged. My dream broken. I never felt lost, because I came to a great country, so I stuck in the restaurant business.”
Unable to afford to continue college, he dropped out and continued to work. He saved $7,200 in two years while living in a one-bedroom apartment with three roommates.
In 1989, he got the idea to launch Pick Up Stix, borrowing $50,000 from the now-defunct Grand National Bank.
Zhang said he grew the business slowly, waiting until 1992 to open locations in Irvine and Laguna Niguel. The business soon turned into a “cash cow,” he said.
“The cash flow was unbelievable. With some locations, within seven months we’d get a capital return—Aliso Viejo, Irvine, those were all within one year we’d get capital return,” Zhang said.
He grew restless after selling the company, joking that he bothered his wife with endless cleaning and home improvement projects. So he launched Aseptic Solutions in 2004.
The Corona-based company manufactures and co-packs organic beverages for brands, using technology that helps extend their shelf life. He sold it in 2012 for $60 million to Irish conglomerate Glanbia PLC.
Now it was time for Zhang to pay back his roots. He bought 50% of Yen Ching and paid for a much-needed remodeling at the 40-year-old restaurant.
Then it was time to say thank you to the music.
Cox said Zhang wasn’t able to pursue music professionally, but that through his business ventures, he’s been able to support budding Orange County musicians.
“Music has an extraordinary effect on people. It translates an emotion,” Cox said. “It’s creating a community of support for the parents and their children. It’s also the reality of offering paths to higher education, greater life, and a wonderful benefit to creating a heart of creativity in our area.”
