The Billionaire's Town

What would happen to a city if one company owned most of it?
Exhibit A: Irvine, California. By Michael Waters and John Gittelsohn.

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Episode Transcript

Speaker 1 (00:00):
The billionaire's town. What would happen to a city if
one company owned most of it? Exhibit A Irvine, California
by Michael Waters and John Gittleson Read Aloud by Mark Leeddhorf.
In the summer of twenty ten, Jennifer Henry moved to Irvine, California,

(00:21):
from Saint Paul, Minnesota, to attend her first year of
law school. She didn't know much about Irvine except that
it had a bit of a Disneyland vibe. Everything felt
new and precisely organized, and residents seemed to be brimming
with the slightly peculiar hope that in Irvine life would
be better. Just before the school year began, Henry and

(00:42):
two fellow students decided to look for an apartment together.
During their search, she kept seeing the same name on
all the rentals. Every single apartment available was from the
Irvine Company. She says they were the only game in town.
Henry did consider another apartment in the neighboring Sea of
Coasta Mesa, just outside the city limits of Irvine, but

(01:03):
in the end, she and her classmates gave in to
the inevitable. They landed at Villa Siena, a well manicured
apartment complex, complete with a pool, basketball and tennis courts,
and a spa, owned of course by Irvine Coe. It
certainly wasn't a bad place to be, but she was
fascinated enough that she wrote a law paper about the
company's curious influence on the city. Henry left Irvine in

(01:27):
twenty thirteen and now lives in Palm Springs. All these
years later, the experience has stayed with her. In what
other American city did a single landlord have such a
hold over the real estate? Not much as different today
for locals, it's an open secret. Ashley Bennett, a nurse
who grew up in nearby Corona, moved to Irvine a

(01:48):
few years ago and ended up calling the Irving co
Leasing office directly. We knew right off the bat that
it was going to be the Irvine Company, Bennett says.
I mean, unless you are renting someone's condo or home
in Irvine, I don't know that there's any other options.
Almost half the residence of Irvine, just a short drive
from Orange County's sun soaked beaches, are homeowners who live

(02:10):
in sprawling subdivisions with multimillion dollar single family houses. But
if you're renting anything in the city, it's another story.
Irvine Co owns about seventy five percent of the apartment
units in the city of Irvine, according to data provided
by the property management software company real Page. Irvine Co
says it's closer to half of all apartments. It also

(02:32):
owns almost every shopping center in Irvine, as well as
many of the city's office spaces. It owns a golf
club and a solar panel installation business. Even The Irvine Standard,
a community newspaper delivered to residents, is owned by Irvine Co.
At the helm of Irvine Co is Donald Brenn, the
wealthiest real estate developer in America, with about seventeen point

(02:56):
four billion dollars to his name. According to The Bloomberg Billionaire,
He operates the core of his empire like a one
man homeowners association. Under his leadership, Irvine Co sets strict
home design standards, requiring windows on all four sides of
single family houses, roofs with ceramic shingles or terra cotta tiles,

(03:17):
as well as specific fluor aery ratios allowing space for yards.
Each village gets a plant palette dictating which types of trees, shrubs,
and grasses are allowed, and Brenn has been known to
drive around town and direct his staff to redo aesthetic
choices he doesn't like. Many of the city's hallmarks, such
as its red tile roofed Mediterranean houses, came straight from

(03:39):
Bren's affection for Italian Palladian architecture, influencing everything, including the
city's schools and its fire stations. Brenn declined to speak
to Bloomberg BusinessWeek, but Irvine Co spokesperson Ryan Lilligren said
in an email that the company's decades long master planning
and partnership with the city has provided an unmatched qual

(04:00):
of life to Irvine residence, and that the city continues
to be a model new community. As chairman, Brenn remains
the ultimate decision maker at Irvine Co. He's tan athletic, forceful,
and confident, says James Dody, the former president of Chapman University,
a private liberal arts school in the city of Orange.

(04:21):
He speaks, you listen. Brenn comes into the office every day,
where he works on the ninth floor at a desk
overlooking the Fashion Island shopping center, which he owns, and
farther in the distance, the exclusive Harbor Island, an artificial
island where he has a mansion. He's been known to
sign off on construction documents and profit and loss statements

(04:42):
by hand. It's the kind of top down control one
might expect from a billionaire run planned utopia, such as
former Victoria's secret Chief executive officer Les Wexner's model Heartland
Town in Ohio or Oracle chairman Larry Ellison's privately owned
Hawaiian Island. But those other master planned communities are dwarfed

(05:03):
by Irvine's size, longevity, and diversity. Irvine has attracted a
mix of academics, immigrants, and entrepreneurs, fueling the hottest housing
market in the nation, as the Los Angeles Times proclaimed
last August, and making it one of America's most enviable
urban planning experiments. In the wake of the Los Angeles Fires,
Its meticulous fire emergency planning has also been heralded as

(05:26):
a model for other cities. Sixty years after Irvine co
transformed its historic ownership of a sprawling plot of farmland,
Irvine has become a thriving city of more than three
hundred thousand residents and about four hundred and fifty thousand jobs.
Its home to major tech companies, including game maker, Blizzard Entertainment,

(05:47):
and electric vehicle upstart Rivian Automotive, and the prestigious University
of California at Irvine, famous for its breakthroughs in chemistry,
climate research, and computer science in the Donald Brinn School
of Information and Computer Sciences. High earning tech workers and
executives have flocked there for its good schools, low crime rates,

(06:07):
and racial diversity. Noodle shops and Middle Eastern grocery stores
dot the city's strip malls. It's Los Angeles, but without
all the fuss. Brenn is now ninety two and has
no announced successor. Few know what will happen when the
person who planned Irvine down to all those fine details
is gone. But one thing they can expect is that

(06:28):
the one man Hoa has not left the future of
his city to chance. Irvine is so meticulously planned that
it can be easy to forget what it lacks. Graffiti
is rare and swiftly removed. The streets are incessantly clean.
There are no cannabis shops, no cemeteries, and almost no
above ground cables. You know you've left the city when

(06:50):
you start to see telephone polls hundreds of surveillance cameras
operated by law enforcement watch public spaces. The police department's Tesla.
Cyber trucks patrol the roads. Many of the city's residential
neighborhoods are laid out in concentric circles. Lisa Alvarez, a
professor at Irvine Valley College, says that even after almost

(07:10):
thirty years of teaching in Irvine, she still finds herself
getting lost driving. Once in a while, she'll make a
turn and there's this very spooky feeling, like, oh my gosh,
where am I now, she says, because it all looks
the same. Once you're aware of Irvine Coe's grip on
the city, you notice traces of it everywhere. The company's

(07:32):
red logo, a sun wave, which Irvine Co explains in
a Facebook post, was designed to resemble a combination of
the sun and ocean waves, is spotted everywhere. At the
Woodbridge Village Center, a small shopping mall flanked by two
artificial lakes, A digital sign encourages passers by to follow
Irvine Co on Instagram. When users log on to the

(07:55):
city's public Wi Fi paid for by Irvine Co, the
company's website pops up a few miles away at the
Irvine Spectrum Center, an open air mall owned by Irvine
Co that boasts an Apple store, a Capitol One cafe,
a giant ferris wheel, and a relentless stream of piped
in pop music. A sign advertises an Irvine Co developed

(08:17):
shopping app called Retail Therapy. The app offers daily discounts
at businesses that rent from Irvine Co owned properties, including
a one hundred dollars welcome bonus for becoming a member
of the local credit union. Local businesses face stiff terms
from the company. A lawyer who works on commercial lease
negotiations in the city says the standard Irvine Co contract

(08:40):
for businesses typically has three tiers of payment. In addition
to the normal base rent and the cost of upkeep,
Irvine Co also asks for a cut of the tenants revenue.
Irvine residents remember local businesses the ice cream shop Stricklands
or the halal restaurant cochi Kebab House that have disappeared
because Irvine Coe chose not to renew their leases. Irvine

(09:04):
Coe does not dispute this, but says that unfortunately, customer
tastes and preferences sometimes shift over time and these changes
can lead to a limited number of closures. Diana Ware,
who's lived in Irvine since the nineteen seventies, says she
misses her favorite diner and other restaurants that have been
replaced by designer cafes. People don't want to pay twenty

(09:26):
five dollars for bacon and eggs, she says. Still, she
loves her city, the sun, the nearby sand, and the safety.
You couldn't pay me to live anywhere else. Siblings, Kevin
and Stephanie Lynn, left Irvine after high school, moving away
for college and work, only to return home. Growing up here,

(09:46):
my friends would call it the bubble, says Kevin, who
opened a women's clothing boutique with his sister at the
Spectrum Mall in twenty nineteen. I recommend kids get out
and explore, but now we appreciate it because we've been away.
The Lenz parents, immigrants from Taiwan who moved to Irvine
almost thirty years ago, were part of a broader migration

(10:06):
of Asians drawn by the strong public schools. Real estate
agents started to advertise in Asia, says Linda Trinvaux, a
professor of Asian American Studies at UC Irvine, so if
you were trying to migrate from Korea or Taiwan, even
mainland China, Irvine is on the map. Today. Asian Americans

(10:26):
make up forty four percent of Irvine's population. The strip
malls popular among Asian American residents, such as Diamond Jamboree
Shopping Center, are some of the few not owned by
Irvine Co. Kevin and Stephanie say they'd never given much
thought to the idea that most of Irvine was owned
by one company, including both the apartment and the retail

(10:47):
space they rent. If anything, they appreciate the centrally planned,
controlled nature of the city. The siblings share an apartment
in the Promenade, a new Irvine Co owned resort like
complex with red tile roofed units, arched doorways, and Brend's
favored Palladian villa style and glimmering pools. Stephanie experimented with

(11:08):
other places. She went to Parsons School of Design in
New York and lived in London and Germany, but none
seemed to top her hometown. I have no foreseeable plans,
she says, to leave Irvine. We'll be right back with
the billionaire's town. Welcome back to the billionaire's town. The

(11:32):
story of Irvine began two centuries ago when James Irvine
left Ireland during the Potato Famine and ended up in
San Francisco during the Gold Rush. He successfully opened a
grocery store and used the profits to purchase a one
hundred and ten thousand acre sheep ranch outside Los Angeles,
roughly the size of today's Denver. In eighteen ninety four,

(11:54):
Irvine's son incorporated Irvine Co. To manage the family landholdings.
Modern Orange County eventually sprung up around the Irvine ranch,
and the county's population grew from about thirteen thousand and
eighteen ninety to seven hundred thousand in nineteen sixty. Control
of the ranch ultimately landed with James's grandson, MyFord Irvine,

(12:15):
who decided to develop the land into a city. But
before he got started, he died in his basement in
nineteen fifty nine from a shotgun wound to the stomach
and two pistol wounds to the head. Officially, it was
ruled a suicide, though several Irvine family members raised the
possibility of more nefarious activity. On the day of his funeral,

(12:37):
Irvine Co convened an emergency meeting to decide who'd take over.
The successor was a longtime board member who accelerated the
plans to hatch a city. At the time, the Associated
Press called it potentially the most valuable piece of land
under single ownership in the world. To attract residents, the
company gifted a one thousand acre plot of land to

(12:58):
the state of California in exchange for the choice of
location for its new campus, UC Irvine. To design the city,
Irvine Co hired architect William Pereira, who got his start
designing sets for Paramount Pictures, and an idealistic urban planner
named Ray Watson, who became the chairman of Walt Disney
Productions in the nineteen eighties. Watson had first entered the

(13:20):
Disney orbit earlier when Walt Disney, a fan of the
Irvine plan, had consulted Watson as he developed Disney World.
They built the city around a series of neighbourhoods dubbed villages.
Each won a large community of single family homes, plus
a series of apartment buildings and its own shopping centers.
It was a novel, more community centric approach to the

(13:42):
suburban sprawl taking over the rest of the country. Sharon Togi,
who moved from Oregon to Irvine with her husband and
kids in nineteen sixty six, settled in University Park, the
city's first residential village. She bought her home, a townhouse
style building that shared a driveway with their next door neighbors,
for twenty five thousand dollars. All the homes opened onto

(14:04):
a shared park space where kids played on swing sets
and board teens played cards or smoked weed. Togi attended
Easter egg hunts, potlucks, movie screenings, swim meets. Local parents
split up childcare duties, and the neighborhood school adopted a
team teaching approach, where first, second and third graders were
taught in a big group together. Togi and her neighbors

(14:28):
felt they were building something different from the rest of
buttoned up Orange County. Togi agitated her community's corporate overlord
when necessary. Once she asked an Irvine Co executive for
better playground equipment for the neighborhood. When he turned her down,
she reminded him that he was hosting an open house
in a few days to promote new housing developments. She

(14:49):
told the executive that she and her neighbors would be
there kids and their strollers clutching signs that read Irvine
Company does not care about your children's playground equipment. Togi recalls.
He said, would you really do that? And I said,
you bet your life I would. A day later, the
company sent her a budget. Despite those small compromises, Irvine

(15:11):
Co held tight to its power. When the company created
new neighborhoods Woodbridge, Turtle Rock, Northwood, its executives set up
homeowners associations, which were in vogue across America at the time,
and trained the new leadership. Irvine Co gave these hoa
leaders a handbook complete with company recommendations for how the

(15:31):
houses in each neighborhood should be maintained. The village by
laws barred cars from parking in driveways and required garage
doors to be closed. They also dictated the shades of
beige exterior paint and the proper heights of fences. In
nineteen seventy one, Irvine residents voted to incorporate as a city,

(15:52):
meaning they'd be able to elect a mayor and a
city council independent of the company. The city now had
to sign off on all new irv Vine Co. Developments,
but at the first city council meeting, an official made
a telling slip, May I call this official meeting of
the City Council of the Irvine Company to order please.
Just as Irvine Coe was erecting its new city, a

(16:15):
little known developer began building homes of his own nearby
in Orange County. The son of high powered Hollywood producer
Milton Brenn, Donald Brenn grew up in a house filled
with servants. He spent his summers sailing and winters skiing.
In the late nineteen fifties, Brenn built his first homes
in the area thanks to a loan from his father's

(16:36):
second wife, Claire Trevor, an actress who starred in films
alongside John Wayne. A few years later, Brenn bought four
thousand acres just to the south of Irvine, where he
began building a new city, Mission Viejo. His attention, however,
was increasingly on the growing city to the north. In
nineteen seventy seven, he joined a group of investors that

(16:57):
bought Irvine Coe for three hundred and thirty seven million dollars.
Within six years, Brenn had purchased enough stock to hold
an eighty six percent stake, resting control of Irvine Coe
from his partners. Under Brenn, home designs became flashier than
in the original plan, reflecting his own taste. Irvine Co
also began expanding beyond Orange County. His portfolio now includes

(17:22):
tracks of commercial and residential properties in San Diego, Los Angeles,
Silicon Valley, and Chicago. In twenty fifteen, the company was
revealed as the owner of the met Life building in
New York. The National Multi Family Housing Council ranked Irvine
Coe as the twelfth largest department owner in America in
twenty twenty two. In addition to its properties, it owns

(17:43):
eight hundred acres of avocado groves north of Irvine, making
it one of the top avocado producers in the US.
According to the company, half of the original Irvine Ranch
is also set aside permanently from development, preserved in perpetuity
as wildlands, one of Bren's proud achievements, according to the
Donald Brenn Foundation. Within the walls of Irvine Co, Brenn

(18:06):
is known as well mannered and scrupulous, though employees and
associates say he's not much of a people person. Top
executives who requested anonymity because they are not authorized to
speak on behalf of the company. Advise others not to
use any adjectives when they report to him, since they
say he wants only the raw facts. A former employee

(18:26):
says every presentation needs to be in his preferred format
ten point aerial typeface with consistent margins. According to another
former employee, when Brenn visited an apartment complex that Irvine
Co had opened in Santa Clara, California, he informed the
leasing manager that he didn't like the building's exterior and
he wanted the cypress trees and birds of paradise plants

(18:48):
lining the front walkway arranged in a different order. By
the following morning, the person says, the hedges and pavers
had been ripped out and completely remodeled. Irvine Coe says
the adjectives, the presentation requirements, and the Santa Clara incident
are not accurate. In a Los Angeles Magazine article from
nineteen eighty four, Brend's top aid Gary Hunt, said his

(19:10):
boss wired his conference room with devices that thwart all
recording equipment. Hunt, who worked for Irvine Coe for twenty
five years and is currently the vice chairman of a
California Public Affairs Company now says he never said that
Brend's personal staffers, cooks, maids, drivers have had to sign
an agreement swearing them to confidentiality regarding any financial, business, medical, legal, personal,

(19:35):
and contractual matters of or pertaining to Brenn, his family, friends, associates,
and other employees of employer, noting that violators may have
to pay a fifty thousand dollars penalty and face a
threat of litigation. According to a two thousand and four
report in OC weekly, Irvine co disputes this characterization. In

(19:55):
two thousand and six, when an ex lover sued Brenn
for failing to pay what she alleged was adequate child
support for two children he fathered out of wedlock, Brenn
persuaded the court to block her requests for information, including
his estate plan and income, citing his right to privacy,
a ruling upheld on appeal. Whereas some real estate barons

(20:15):
might do anything to climb the rankings of billionaire's lists,
Brenn had the equivalent of a full time staff trying
to keep his money quiet, says a former executive who
spoke on condition of anonymity because of concerns about retaliation.
It's no wonder o c weakly once voted him Orange
County's most mysterious celebrity. Even Farah Kahn, Irvine's mayor from

(20:38):
twenty twenty to twenty twenty four, has never met Brenn.
She says she came close only once. Around twenty nineteen,
when she was a city councilwoman. She was waiting on
the ground floor of the Irvine Co. Offices and was
told to clear out of the way. Brenn was arriving
to work and he wanted to take the elevator up alone.
It was really surprising to me that everyone had to

(20:59):
be ushered out of the lobby so he could go
up to his office. Con says, that's as close as
I've ever gotten to him. If there's a plan for
what happens to Irvine Co after Brenn, few people inside
the company know what it is. Many of the executives
who appear to be front runners for the top job
eventually wake up to find themselves out of favor or

(21:20):
burned out, or, as one former executive who spoke on
the condition of anonymity for fear of retaliation put it,
senior leaders go to work, knowing someday the end would
come and he Brenn would find a better shiny Penny
Dan Young, a former mayor of Santa Anna once viewed
as Bren's likely successor, stepped down as head of home

(21:42):
building in twenty sixteen after sixteen years at the company.
Young declined to comment, citing an NDA. The only executive
to hold the title of CEO at Irvine Co was
Mike McKee, who left the company almost two decades ago.
In two thousand and eight. Asked about the future of
Irvine after Brenn, the former chief executive says, I know

(22:03):
what he plans. I was involved in it, but he
won't reveal more than that. Instead of naming another CEO
after McKee's departure, Brenn appointed a four member executive management
Committee made up of the company's president, chief operating Officer,
chief financial officer, and group president of commercial Properties, all
potential candidates to lead the company after his departure. Some

(22:27):
of Brenn's family may also stay involved, including his wife, Bridget,
a former entertainment attorney. Hunter Brenn, the son of Donald
and Bridget, identified himself as an Irvine Co. Executive apprentice
for a twenty twenty three MBA program at Pepperdine University.
Another son, Kerrie Brenn, a former race car driver, once

(22:48):
operated California Pacific Homes, a home builder closely associated with
Irvine Co. It's not clear whether they, or any of
Brenn's other children have a shot at the top job.
With then Brend's inner circle, the question of succession can
be touchy. Rumors are he's going to live to be
about two hundred and twenty, says Larry Webb, who for

(23:09):
three decades worked for home builders contracted by Irvine Co,
so any discussion might be moot. These days, Irvine Coe
is warming up to more dense housing, such as the Promenade,
the new resort style campus with two thousand apartments where
the Lynn siblings live, and other developers are cribbing from
Brend's formula on his turf. An affiliate of Linaar is

(23:32):
building its own Irvine Coe style mini utopia. The Great
Park Neighborhoods, built on a former airfield in Irvine City limits,
will feature ten thousand plus homes single family residents starting
at one million dollars, along with nature trails, schools, a hospital,
and a College campus. Meanwhile, Irvine Coe is also running

(23:53):
out of space. There's still more land to build, but
not the decades long runway they had, says Scott Wilde,
senior vice president at John Byrne's Research and Consulting, a
housing market advisory company in Irvine. Perhaps Brend's greatest legacy
will be that living in Irvine has come to represent
a pinnacle of upper middle class achievement, with few others

(24:14):
able to afford to live there anymore. It's the third
most expensive city for rentals in southern California, with an
average gross rent of twenty seven hundred and seventy one dollars.
From twenty to twenty twenty two, the home ownership rate
fell from sixty percent to forty four percent, as Mayor
Kahn pushed for more multi family housing to some success.

(24:36):
In October, the city cleared the way for the development
of fifteen thousand new housing units near John Wayne Airport,
mostly on land Irvine Coe sold decades ago. But even now,
everyone knows there's a limit to the city's power to
ensure the housing is affordable, at least without Irvine Co's
and Brend's endorsement, because they are a majority owner of

(24:58):
rental properties. Here they dictate what rents would look like.
Con says, noting that some of her ideas, such as
converting apartments to more affordable condos, didn't go too well
after she raised them with the company. In late twenty
twenty four, Larry Agrin became Irvine's new mayor. Over the years, Agrin,
a long serving councilman and self described progressive who'd accused

(25:20):
the Irvine Co of monopoly control of the land, has
watched the company amass that power. When he first ran
for city council in nineteen seventy eight, he says it
was obvious who on the council was controlled by the
company and who wasn't. In one early proposal, he attempted
to limit future rent increases in Irvine, a move aimed
squarely at the city's only sizeable landlord. The proposal never passed.

(25:45):
This time, Agron is taking a less combative approach that
doesn't involve legislation to get Brend's company on board with
his plan to create more affordable housing. He wants to
persuade them to slash the rents on five thousand existing
apartment units. In exchange, he'll reduce the affordability requirements on
some of the fifteen thousand units or so that irvine

(26:06):
Coe still needs the city to approve. It's a far
less radical tactic than his proposals from decades past, but
the likelihood of success, Agrin concedes, is much better just
entering into a deal with the irvine Coe