Changing Times Challenge Segerstrom : Profile: Costa Mesa’s prolific developer shows no signs of stopping, but new climate challenges Bristol Street dream.
Dan Weikel and Chris Woodyard
Sunday, March 15, 1992
COSTA MESA — Hidden behind tree-covered berms, the Fairview Road headquarters of C. J. Segerstrom & Sons is both barnyard and corporate office. It is a place where sophisticated talk about development and fine art mixes with the drone of tractors and the pungent scent of fertilizer from the family farm out back.
The grounds befit the enigmatic man who runs the place–Henry T. Segerstrom, the lima bean scion turned real estate visionary, patron of the arts and leading purveyor of the notion that a shopping mall can be a center of culture.
For almost three decades, the slender 68-year-old has led a vast retail and commercial enterprise responsible for South Coast Plaza and the Orange County Performing Arts Center, which he worked tirelessly to build in a once obscure suburb known as Goat Hill to the upper crust of Newport Beach.
Recognizing early that urban decay would drive retailing centers from the major cities, Segerstrom had the foresight to turn much of the family farm into one of the premier business and cultural locations in the nation. The result has become such a powerful magnet that it draws from a potential market of 8 million people from San Diego to the mansion-lined streets of Pasadena.
“He has a very unusual ability to see the large picture and the small detail,” said Thomas R. Kendrick, president of the Performing Arts Center. “He focuses on excellence and has an uncanny ability to enlist others in his vision. He sees beyond bricks and mortar to what it all can represent.”
Beyond Southern California, Segerstrom has helped set in motion a national trend toward urban-village complexes, which contain business, retail, housing and entertainment focal points amid low-density cityscapes that surround metropolitan areas. “Edge cities” are what one author calls them.
Segerstrom, who apparently has no plans to retire soon, has gone about building his dreams with single-mindedness and enormous personal involvement, often selecting architects and building materials himself. He even persuaded the J. Paul Getty Museum in Malibu to loan ancient Roman mosaics on a long-term basis to enhance the tone of the posh Center Club, which he founded across from the Performing Arts Center.
But acquaintances who requested anonymity say Segerstrom has at times been uncompromising and imperious in the quest to fulfill his goals. In contrast to his graciousness and courtesy at public appearances, some have found him so reticent and distant that he seems bloodless.
His empire, too, has had its share of controversy over the years. During the 1960s, he became embroiled in a dispute with his relatives over inheritance of the family fortune. In the 1970s and 1980s, unhappy tenants filed two rounds of lawsuits against his company, alleging misrepresentation and breach of contract at South Coast Plaza Village, an open-air shopping center across from South Coast Plaza. One disgruntled shopkeeper mocked the location by putting up a banner reading “South Ghost Village.”
Last year, a company memo surfaced suggesting that it was looking for ways to avoid hiring or promoting homosexuals, creating a furor and threats of a boycott.
And, as he heads into the anniversary celebration of South Coast Plaza, which opened 25 years ago today, Segerstrom faces substantial challenges to his vision of turning Bristol Street into the rival of Wilshire Boulevard in Los Angeles and Park Avenue in New York.
While Segerstrom developments have made their mark on the Costa Mesa skyline, they also have brought the city a host of urban problems, which have not sat well with voters or some current political leaders.
“People all agree that Segerstrom puts out a quality development,” said Councilman Jay Humphrey. “The question is how dense and intense. The community does not want to see any more of the kind of density he has built in the past.”
Segerstrom, who lives in a bay-front home in Newport Beach, declined to talk specifically about the future of his business ventures, Costa Mesa politics or himself, except to say that development of his family’s land will eventually occur. In an interview with The Times, he also expressed his desire not to be the subject of a story. Friends, co-workers and relatives explain that he is an intensely private and modest man who does not like to call attention to himself.
“He makes few public statements,” said Costa Mesa Councilman Peter F. Buffa. “His is not the Donald Trump style. You know, ‘How much press can I get personally?’ That is not Henry.”
Segerstrom, however, is not so reluctant to seek publicity for his latest project or a new retailer he has recruited for South Coast Plaza. Even then, he prefers to release information through prepared statements, underlings or choreographed appearances at which he speaks carefully, as if every word takes a trip around his brain before he utters it.
Decorum is a priority. He is always impeccably dressed and has occasionally admonished Performing Arts Center employees for not wearing clothes he considers appropriate. On the other hand, Segerstrom has taken pains not to offend. Friends say that when the king and queen of Sweden visited South Coast Plaza and were late to a Segerstrom reception, there was some debate over whether to open the champagne without them. Segerstrom decided the champagne could wait for the regal guests.
It was a royal setting for a man raised as a farm boy. On April 5, 1923, Segerstrom was born into a large family that owned about 2,000 acres in what is now northern Costa Mesa. Their operation was the largest independent producer of lima beans in the nation.
At Santa Ana High School, Segerstrom excelled academically and was senior class president. He entered the Army as a private at 19 and was accepted for Officer Candidate School, where he was the top cadet in his class. During the Battle of Bulge, where the Allies fought back the last major German offensive of the war, Segerstrom was seriously wounded in the arm while assigned to a field artillery unit. He left the Army a captain.
After military service, Segerstrom attended Stanford University, receiving a bachelor’s degree and an MBA. He has two sons and a daughter from his first marriage, which ended in divorce in 1981 after 31 years. A few months later, he married his second wife, Renee.
His mother, Nellie Ruth Segerstrom, 94, recalls that her son took an important role in the family business upon graduation from college. He became a managing partner along with his cousin, Harold T. Jr., and eventually helped transform a bean farming business into the development firm he heads today.
“Henry is the leader and initiator. He probably deserves a lot of the credit,” said Nellie Ruth Segerstrom, who for years has been part of the inner circle of C. J. Segerstrom & Sons. “He has a lot of foresight and enthusiasm. There is no end to his contributions to the county.”
One of them is South Coast Plaza. If the shopping mall is today’s Main Street, Segerstrom has added bistros, Cartier and valet parking. To him, South Coast Plaza is not a shopping mall, it’s a “retail center,” a cultural experience, something higher, more dignified, than the mere exchange of money for goods.
What started in 1967 as a rather plain mall serving more utilitarian needs is now the area’s greatest monument to consumer culture, containing a stunning array of retailers from the proletarian to the bourgeois.
“The mall now is, in one word, incredible,” said Larry Ober, who operates four stores at South Coast Plaza. “The standards they have in housekeeping and security–you could eat off the floor at any given time. They take pride in what they do.”
For the most part, South Coast Plaza and the family’s other developments substantially reflect Segerstrom’s taste. He picked internationally known architect Cesar Pelli to design the new Plaza Tower that opened in October and traveled to Sweden to select granite for the Performing Arts Center. The grounds of the South Coast complex are sprinkled with major public sculptures by such artists as Alexander Calder, Henry Moore, Joan Miro and Isamu Noguchi.
“A lot of people want to seek out the best but don’t have the expertise or the discriminating taste to identify it,” Councilman Buffa said. “On stage, in the retail center or in development, he knows what world-class means.”
During his travels or by telephone, Segerstrom has persistently courted the purveyors of some of the finest merchandise money can buy–retailers such as Barney’s New York, Orefors, Armani, Chanel, Halston and Tiffany & Co. Some only have a few locations worldwide–Paris, New York, London, Tokyo, Costa Mesa.
His wooing of Nordstrom was typical. In the mid-1970s, the department store chain clung to the Northwest, where it sensed that customers appreciated a high degree of customer service.
“He was in Seattle on business, and he happened to go into one of our stores,” said Pete Nordstrom, the chain’s Orange County regional manager and the son of company Co-Chairman Bruce Nordstrom. “He really talked to us about coming down. . . . He was pretty relentless in his pursuit.”
Today, the South Coast Plaza Nordstrom is the highest grossing store in the department store chain.
“I get involved personally in projects,” Segerstrom said. “We simply try to reflect the community. Our views and perspectives have changed. We are now more cosmopolitan.”
What he has created does not stop at South Coast Plaza. A croissant’s throw from there is a cluster of office buildings, the Westin South Coast Plaza hotel, South Coast Repertory and the cultural centerpiece of it all, the Performing Arts Center.
The Center, where he has the best seats in the house–Row D, Tier 1, is probably Segerstrom’s greatest civic contribution. The facility and its dramatic architecture established the South Coast complex as an artistic hub of the county, but it has also helped serve the business interests of his family.
In the mid-1980s, Segerstrom donated the land for the Center, chipped in $6 million and headed the effort to raise $73 million needed for construction. He is credited as being the driving force behind a longstanding idea which had not gotten off the ground.
“He did not just give money. His energy, drive and contacts raised the money,” said Ray Watson, vice chairman of the Irvine Co., who served on the Center’s facilities committee. “He made it a status thing to give money to the Center, and he made you feel that you were part of something important.”
In the mid-1970s, well before the Performing Arts Center, Segerstrom donated land for South Coast Repertory and led one of the first campaigns for a cultural facility in Orange County. Now, South Coast Repertory garners critical acclaim, including a Tony Award in 1988 for outstanding regional theater.
“He has a real sense of seeing the full implications of ideas,” said David Emmes, the artistic director-producer of South Coast Repertory. “He is a person who embraces vision and a certain amount of risk taking. His efforts are far beyond the self serving. I think he is trying to make a well-rounded community.”
In a way, Segerstrom has been the future. His developments are part of a post-World War II trend toward urban villages–junior metropolises where the buildings are tallest, the daytime population the largest, and the traffic congestion the most severe.
Christopher B. Leinberger, an urban affairs expert, says Costa Mesa, Newport Beach and Irvine are good examples of how the urban-village complex is reshaping the greater Los Angeles area. Washington Post urban affairs writer Joseph Garreau calls them “edge cities.”
But the trend has gotten Segerstrom into some trouble in his grandfather’s hometown. Today, he faces substantial political and economic challenges to his grand vision of transforming the Bristol Street environs into a stylish corridor of office buildings.
The economy is locked in a 20-month recession that has devastated the commercial real estate market. Gone, too, are the relatively compliant and appreciative City Council members with whom the Segerstroms used to close deals with a handshake and woo during lunches and dinners at the ancestral home on Fairview Road. Missing as well are the days when people were apologetic about opposing Segerstrom projects.
Now, in the old guard’s place is a new council majority, which does not necessarily share Segerstrom’s ambitions for growth. Although they respect his past accomplishments and the enormous tax base he helped create, some council members say they no longer want high-density development.
“The Segerstroms are used to getting what they want, but now money (campaign contributions) can’t always buy you a consistent council,” said Councilwoman Sandra L. Genis, referring to the fact that Segerstrom is a major contributor to political candidates. “They have this vision of making Costa Mesa into an urban center, but he doesn’t live here. He has got major political opposition in the community. We want a residential community.”
The tables turned on Segerstrom in the November, 1988, election, when voters turned down the company’s proposal to build a $300-million commercial project off Fairview Road near the San Diego Freeway. The Home Ranch project lost by a 3-2 margin after Segerstrom spent about $390,000 on the political campaign to get the development passed during a referendum.
Former company executives and politicians who once supported Segerstrom said he was disappointed and in disbelief after the defeat of the Home Ranch project, something former Councilman Al Pinkley called “a first-class lynching.”
David Shaw, a Newport Beach developer who considers himself a close friend of Segerstrom, said Segerstrom has weathered the setbacks. “You never hear of Henry backbiting anybody or getting in a fight with a politician,” Shaw said.
Friends and co-workers attribute Segerstrom’s tremendous success to more than just the good fortune of inheriting a substantial amount of land from his relatives. He is well-prepared, meticulous and a tough negotiator who, they say, sets high standards for himself and others.
“He is an intense competitor, and a good competitor,” said Watson of the Irvine Co., whose Newport Center Fashion Island mall has been eclipsed by South Coast Plaza. “He is a dedicated owner and entrepreneur. He takes risks, and stores have gone broke. The easy route to go is the established chain stores, but he brought in all those exclusive boutiques.”
Not everything Segerstrom has touched over the years has been a success, however. In July, 1980, Segerstrom participated in consortium of prominent Orange County businessmen who bought the California Surf Soccer Team. It folded a mere 14 months later after reportedly losing up to $2 million.
Two shopping centers, Crystal Court and South Coast Plaza Village, which are adjacent to South Coast Plaza, have not done well. South Coast Plaza Village in particular has been plagued by repeated lawsuits in the 1970s and 1980s alleging that the Segerstroms mismanaged the center and made false promises to tenants. Attorneys for Segerstrom have denied the charges and maintain that the mall was properly promoted.
In the 1970s, about 20 civil lawsuits were filed against the Segerstroms, alleging that the company reneged on promises to build a 110-foot tower, a wine tasting cellar and a farmer’s market. The Orange County district attorney also sued and collected a $20,000 civil penalty. The tenants’ lawsuits were settled with the promise of increased promotions and a business consultant to help retailers.
Years later, in October, 1991, it was revealed that the company’s operations manager had sent Segerstrom a memo suggesting that the company was looking for ways to avoid hiring or promoting homosexuals. It was an embarrassing moment.
“We can refuse to hire a person on the grounds that he or she is gay or lesbian,” wrote an operations manager in response to a query from Segerstrom. “If we wish to continue to be able to refuse to hire or promote because of sexual preference, I recommend we make no present statement or announcement to curtail that ability.”
An outcry over the leaked memorandum came from gay activists, who threatened a boycott. The next day, the company denied that it had discriminated in the past and announced that it was revising its written hiring policy to prohibit bias against gays and lesbians.
The Segerstroms were also embroiled in a family feud to determine whether certain family members could inherit holdings amassed bJ. Segerstrom & Sons. The dispute erupted in 1964 after the death of Henry’s father and his aunt, Ann. Charles, Erich and Ester, the children of patriarch C. J. Segerstrom, said they had failed to receive their rightful inheritance.
According to court records, Ruth Segerstrom, Harold Sr. and Henry Segerstrom sued in Orange County Superior Court on the grounds that only members of the C. J. Segerstrom & Sons partnership were entitled to the Orange County holdings.
The rebuffed relatives countersued, arguing that they automatically inherited an ownership in the property through the estate of their grandmother, Bertha, who had died without a will.
Ultimately, the court fight was settled. According to family members, the C. J. Segerstrom & Sons partnership agreed to give $932,500 to be divided among the relatives who had requested part of the estate.
Despite the imbroglio, Segerstrom is said to be devoted to his family. Former Costa Mesa City Councilman Al Pinkley, 82, recalled that Segerstrom once asked the council to expedite a resolution in the early 1960s to place a memorial to his father, Anton, in Estancia Park.
“Henry’s father was ill,” Pinkley said. “He came to me to get the deal done before his father passed. It showed me his concern for family.”
Since then other monuments have been created or preserved by the Segerstrom family. Streets are named after them, and the old family home built in 1915 stills stands next to Segerstrom headquarters. And, hidden behind three banks and a shopping garage in the South Coast complex is a stack of 15 bronze-colored granite rocks. It is a wistful tribute to 90 years of farming on Segerstrom land. The sculpture by Isamu Noguchi is called “The Spirit of the Lima Bean.”
C.J. Segerstrom & Sons: Who’s Who
C.J. SEGERSTROM * Born in Sweden, June 29, 1856. * Emigrated to the United States in 1882 with wife, Bertha. * Moved to Orange County in 1898. * Couple had 11 children–six sons and five daughters. * Two oldest sons, Charles and Erich, moved to Sonora after the turn of the century and made their fortunes in banking, title insurance, mining and real estate. They furnished some of the money that father and brothers used to increase their dairy and farm holdings. * When he died in 1928, the four sons still at home–Fred, William, Anton and Harold–continued family business.
THE COMPANY OFFICIALS
NELLIE RUTH * Husband Anton Segerstrom was the senior member of C.J. Segerstrom & Sons until his death in 1963. * Succeeded husband in family business, joining son Henry and nephew Harold Jr. * At 94, still attends business meetings at partnership’s Costa Mesa headquarters.
HENRY THOMAS * Youngest of Anton Segerstrom’s two children; he is 68. * Assumed leading role as managing partner after his uncle, Harold T. Segerstrom Sr. died. * Handles partnership’s retail and commercial endeavors. * His vision was driving force in changing company’s focus from agriculture to real estate development.
HAROLD T. JR. * Only child of Harold T. Segerstrom Sr.; he is 63. * He and his cousin, Henry, were brought into company after deaths of their uncles, William and Fred. * Also a managing partner. * Oversees family farming operations upon which today’s C.J. Segerstrom & Sons was built.
THE NEXT GENERATION
TOREN * Henry’s oldest son, 37. Manages Harbor Gateway complex in Costa Mesa.
ANTON * Henry’s youngest child, 24. General manager of Crystal Court.
ANDREA * Henry’s oldest child, 41. Husband David Grant is South Coast Plaza’s operations director.
THEODORE * Harold Jr.’s only son, 35. Property manager in the family partnership.
Researched by DALLAS M. JACKSON / Los Angeles Times
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