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INTERVIEW: MAESTRO OF DEVELOPMENT Henry
Segerstrom makes beautiful music with Orange County.
By Dave Orman
Photography by Josh Manashe of Quad Photo on location at the Segerstrom
Concert Hall
Henry Segerstrom enjoys a front-row seat. He’s had one for nearly six
decades now, providing an enviable perspective on the growth of Orange
County, that treasured chunk of Southern California landscape wedged between
Los Angeles to the north and San Diego to the south.
Actually, he’s done much more than just sit around and watch. Under his
stewardship, C.J. Segerstrom & Sons — which dates back to 1898 when his
grandfather Charles John Segerstrom came to Orange County to farm 20 acres
of leased land — has emerged as a key player in the region’s development.
The jewel of the family business, South Coast Plaza, is today recognized as
one of the world’s most successful luxury retail centers.
That success has spurred Henry Segerstrom to a lifetime of philanthropy,
highlighted by his lead gift a few years back of $40 million (the largest
charitable gift in Orange County history) for a new concert hall. In fact,
when the Renée and Henry Segerstrom Concert Hall opens this fall, Segerstrom
will be able to sit practically anywhere he wants. The new concert hall,
named for Segerstrom and his late wife, will face the existing Segerstrom
Hall — part of the Orange County Performing Arts Center built on land
previously donated by members of the Segerstrom family.
As an Orange County native, Segerstrom looks back on the "O.C." history
with much pride. "I’ve watched it grow in so many ways," he says.
"Population, gross income, number of theaters — people here have done an
extraordinary job of making this a wonderful place with a superior quality
of life."
The member of the Center Club in Costa Mesa, California, recently
toured the construction site while sharing his views on the value of freeway
access, luxury retailing, and the joy of giving back to the community.
What were the early days like for C.J. Segerstrom & Sons?
When my grandfather started farming here, there were at most 15,000
people living in what was a sparsely populated agricultural area. As late as
1948, when I joined the family business, we were exclusively into
agriculture on a little more than 2,000 acres. We pioneered the commercial
farming of lima beans. It was our biggest cash crop.
Today, the agricultural company your grandfather founded is focused on
the ultimate in luxury retail. How did that change occur?
It has, indeed, been a long transition to the real estate and shopping
center business. All of that started changing after we began getting
experience in leasing commercial projects. In 1962, we opened the county’s
first office building with central air conditioning. That was the same year
the San Diego Freeway was being designed, and we got a right-of-way
established on property we owned next to the freeway.
That same year, an architect from Los Angeles called about developing a
regional retail shopping center. The first store to open was the May Company
in the fall of 1966. The entire center opened in the spring of 1967, and I
guess you’d say the rest is history. A Seattle firm helped us construct and
manage the center for one year, but then we took over in 1968. My father had
passed away in 1963, so I was one of four managing partners — the one who
worked with the architects and the leasing people to develop the center.
South Coast Plaza has a long history of introducing retailers, such as
Nordstrom, to Southern California. How did that come about?
Because of Henry Segerstrom! Well, the Nordstrom family will tell you I
was persistent in talking with them about coming to Orange County. When
Nordstrom celebrated its 100th anniversary a few years ago, the Seattle
Times gave them three days of front-page articles. One of those articles
mentioned this "young Swede from Southern California" who kept after them to
expand into Southern California. The South Coast Plaza store continues today
as Nordstrom’s top performer in terms of total sales volume and sales
per square foot.
The highest-producing single stores of other retailers, such as Tiffany &
Co., Chanel, and Crate & Barrel, are also at South Coast Plaza. Just how
successful is the center?
We believe we were the first retail center to hit a billion dollars a
year in annual sales. We did that in our 2002-2003 lease year. Growth has
continued to accelerate to the point where we think we’ll hit $1.5 billion
in 2006.
What drives that kind of volume?
Primarily luxury goods. We’ve developed a unique collection of designer
and upscale stores, including a significant number of fine jewelers. In
terms of sales per square foot, in fact, seven of our top 10 retailers are
jewelers. There’s no place else in Southern California where shoppers will
find the depth and range of selection that they’ll find at South Coast
Plaza.
Do you like to shop? What’s the last thing you bought at South
Coast Plaza?
I do like to shop. I don’t exactly remember the last thing I
bought, but it was probably something for my wife.
You obviously enjoy gift giving. What motivates you to be so
philanthropic?
Our family has always felt a strong sense of giving back to our
community. In 1962, before my father died, we gave the city of Costa Mesa
five acres that included the Estancia Adobe, the oldest standing home in
Orange County. It was built in the early 1820s and is now a museum. That
same philosophy motivated gifts of land to other organizations, like the
Girl Scouts, the Boy Scouts, and the YMCA.
And then, in 1979, you made a slight adjustment in what you contributed
land for.
Yes. That’s the year we donated a five-acre site for a new performing
arts complex. It was our second gift for cultural resources, following an
earlier gift of land to the South Coast Repertory Theatre. Both were driven
by a strong belief that the arts are essential to enhancing the quality of
life for the present generation and those to come. The Orange County
Performing Arts Center opened in 1986, and it’s been very gratifying over
the years to see the immense changes the Center has had on so many lives.
The focus of the Performing Arts Center is Segerstrom Hall, an
acoustically acclaimed 3,000-seat auditorium. But you decided not to stop
there.
In 1998, we announced that we would donate the six-acre parcel of land
directly opposite the Performing Arts Center for the Segerstrom Center for
the Arts. Then, in 2000, I provided the lead gift of $40 million for the
construction of a 2,000-seat concert hall.
In recognition of your gift, it will be known as the Renée and Henry
Segerstrom Concert Hall. What will it be like to have your name on a
building visited by so many people?
I’ll certainly get a lot of satisfaction from that, as I have with the
existing Segerstrom Hall. But the real reward comes from doing something
good for others and seeing how much pride the community takes in these
facilities. In a metropolitan area as diverse and dynamic as Orange County,
world-class performing arts facilities — opera houses and concert halls —
are a natural outcome of our evolution as a society. People recognize that
and are thrilled that we’re able to have these marvelous buildings that will
last hundreds of years.
Hundreds of years? A baseball stadium lasts about 30 years today and
cities begin building new ones.
In the real estate business, we use a term called "useful life," and I
like to apply this term to our plans. Consider the Mariinsky Theater in
Russia. It’s nearly 225 years old, but to me it’s just getting started. I
envision that same kind of useful life for our new concert hall.
At the end of the day, what makes you smile?
I smile a lot when I realize how fortunate I am to be able to create
this kind of cultural environment. But I also smile when I think of how
involved my wife, Elizabeth, has become with this new complex. She’s serving
as chairman for the series of opening events this fall for our new
facilities — probably the most ambitious opening of this type the country
has ever experienced. It will last for five weeks. Plácido Domingo will be
here. The Kirov Orchestra, Ballet, and Opera will be here. We’ll be
presenting the full cycle of Wagner’s Ring of the Nibelung for the
first time in Southern California. If that doesn’t put a cultural complex on
the map, nothing does.
Los Angeles freelancer Dave Orman met his wife on a blind-date lunch some
15 years ago at South Coast Plaza, the focus of the Segerstrom organization.
If the date hadn’t worked out, at least he could have gone shopping.
HENRY SEGERSTROM
Club membership: Center Club, Costa Mesa, California (founding chairman
with Membership No. 1).
Occupation: Managing partner.
Residence: Newport Beach, California.
Family: Wife, Elizabeth; children through previous marriage: daughter
Andrea Grant and sons Toren and Anton.
Education: B.A., M.B.A., Stanford University. Honorary Doctor of Law
degrees from Whittier Law School and Western
State University College of Law.
Community activities: Served 28 years as an elected member of the Orange
County Water District. Became so involved when Orange County needed a bus
system that he is still known today as the "father" of the Orange County bus
system.
Military service: Awarded Purple Heart for injuries suffered during
World War II combat in Europe; retired as field artillery captain.
Hobbies: "I love to be with my wife."
BEST ADVICE
Don’t creep. Be bold!
Military and business tactics have a lot in common to Henry Segerstrom.
As a field artillery veteran of World War II, he attributes much of his
success to the advice he first heard while in training at Fort Sill,
Oklahoma: "Don’t creep. Be bold!"
For example, the original plans for the construction of South Coast Plaza
in the mid-1960s called for a modest start and the addition of 175,000
square feet of retail space in five years. Segerstrom pushed — successfully
— to build the entire center at once. He hasn’t looked back since. |