Major Restructuring Move : Irvine Co. President Nielsen Gets New Development Role

The Irvine Co. has restructured its top management and removed company-wide administrative duties from company President Thomas H. Nielsen, who will now concentrate on community relations and obtaining government approvals for the company’s development projects.

The giant Newport Beach-based land development firm, which has gradually decentralized operations during the past two years, will now be more closely run by an executive committee of five company directors. Those directors began meeting May 27 on a weekly basis, rather than monthly, as they did previously.

Nielsen, who has been president since 1983, said in an interview this week that Donald Bren, owner, chairman and chief executive officer of the Irvine Co., made the changes so that the company could handle a brisker pace and diversity of activity in an increasingly complex business environment.

Gary Hunt, Bren’s assistant, said Tuesday that “the executive committee’s role was expanded to allow for greater involvement in dealing with the various issues and business opportunities the Irvine Co. is involved in.”

Hunt denied speculation in the community that the changes stem from Bren’s disenchantment with Nielsen’s performance or from results of the Irvine city elections, in which candidates favoring slower growth were elected.

Bren has “the utmost confidence” in Nielsen, Hunt said. He added that Nielsen will retain the title of president and remain a member of the company’s executive committee.

Nielsen said he looks forward to spending more time with community leaders and grappling with such thorny issues as transportation and open space. He will remain in charge of the company’s departments dealing with urban planning and design, policy management and entitlement, marketing communications, community relations, corporate affairs, state and national government liaison and corporate communications.

Meanwhile, the company’s six building and property management operations--which have been spun off into separate divisional companies with their own presidents--and its agricultural division, will report to William McFarland. McFarland, who formerly reported to Nielsen, now reports directly to the executive committee. McFarland was president of the Bren Co. before joining the Irvine Co. in 1984 as executive vice president of operations.

Similarly, all of the company’s financial departments--including the controller, internal audit group, the treasurer’s office, management information systems and the business planning section--will no longer report to Nielsen, but instead to John Galvin, formerly a senior vice president of Aetna Life Insurance & Annuity Co. Hunt said that the arrangement is a temporary one for Galvin, who is not an Irvine Co. employee but serves on the executive committee.

Serving on the executive committee, beside Bren, Nielsen and Galvin, are former Irvine Co. President Raymond Watson, who also serves on the executive committees of Pacific Mutual and Walt Disney Productions, and Richard Alden, a former senior partner with the law firm of Latham & Watkins and currently vice chairman and general counsel of Hughes Aircraft.

ee Watson said that as a result of the decentralization, the Irvine Co. has in effect become a “holding company,” concentrating on overall planning and strategy for its semiautonomous enterprises.

Watson and Nielsen noted that in recent years, the Irvine Co. has expanded its activities, kicking off the development of its Spectrum industrial complex and moving more strongly into retail, office, apartment and hotel development, with an emphasis on developing real estate that the company will own and manage as income producing assets.

“The magnitude of Nielsen’s responsibilities was so huge that he couldn’t do everything himself,” Watson said.

Nielsen said that even before the organizational change, he was not familiar with the day-to-day activities of the financial and operating divisions and that “the executive committee always reviewed all major land sales and capital acquisitions and commitments and understandings.”

Irvine Mayor David Baker said he hopes that the restructuring at the Irvine Co. will help the city in its dealings with its largest landowner. “Part of the problem over the last few years (was knowing) who to talk to at the company,” Baker said. “The Irvine Co. I found to be a bigger bureaucracy than the city.”

Clearly Nielsen now is the company official to contact on any land-planning question, Baker said. Also, Baker said he believes that Nielsen’s role of obtaining land-use approvals and directing the company’s government relations is pivotal. “Nearly everything the company does in one way or another is political or related to entitlement,” he observed.