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.