Outspoken Doctor Builds Real Estate, Financial Empire

It’s a great bargain, Dr. Martin List pleaded as he urged his colleagues at Hoag Memorial Hospital Presbyterian in Newport Beach to put up the money to buy the Irvine Co.

Back in 1976, before a bidding war broke out, control of the huge landholding and development company was believed to be available for as little as $100 million, and List tried to persuade the 400 or so doctors on staff to pitch in $250,000 each.

The doctors laughed and List quickly abandoned the idea. The Irvine Co. was sold within a year for more than three times that initial amount.

But former colleague Dr. Morris Fier said no one’s laughing any more at List’s grandiose ideas--including the one for the newly formed List Foundation, a philanthropic, educational institution he intends to establish with $1 billion of his own funds.

In the last 10 years, the outspoken List, 56, has built his own multimillion-dollar land empire, ruling over it with the attentiveness of a surgeon, the flair of a salesman and the daring bravado of a matador.

Now the one-time cancer specialist is taking another turn in a turbulent life that has taken him from fighting Nazis in the forests of his native Poland to promoting space exploration and “Star Wars” weapons research at his List Institute for Strategic Exploration of Space.

He said he will stop making land purchases and start divesting his holdings, which include commercial and residential developments in California and Arizona and about 7,700 acres of prime Colorado Springs-area property.

He plans to turn his attention toward providing financial services in Orange County, principally through a bank and a mortgage company he recently purchased and characteristicly renamed after himself--List American Bank and List American Financial Inc., both in Newport Beach.

“It’s a little bit of ego,” he conceded about the name changes. “Big egos are like the old gods--they need a lot of sacrifices to keep them healthy.”

But his name, List said, is what he trades on. If it means good business to those who deal with List Enterprises, his umbrella organization, it will mean good business to them when they come to Orange County and deal with List American Bank, he said.

Bringing Individuality

“Today we live in a world where everything is computerized,” he said. “I am bringing here individuality. I am bringing my personal coloring to bear on everything I do--on the philosophical aspect of it, on the business aspect of it--and that means, first and foremost, above all, integrity in everything I do.”

That personal coloring includes a lot of charm and aggressiveness that helped him make millions of dollars in a short time, business associates said.

“People always tend to distrust someone like that, but he’s honest,” said Dr. Robert A. Hinrichs, a former Hoag Hospital colleague and one-time investment partner. “He drives a hard bargain, but I’d rather deal with that than with some sharpies that come along.”

The bank is the former Orange City Bank. Last December, List paid $1.6 million for 84% of the ailing institution, pumped $1 million into its capital base to revive it, and moved the headquarters from Orange to Newport Beach. He has since purchased more shares at the same price of $10.61 a share, giving him 95% of the stock.

It was the “obnoxious” and “outrageous” behavior of the head of a now-failed Orange County bank about three years ago, List said, that sent him in search of a bank to buy. He vowed to prove that he could run a bank properly and profitably without resorting to the kind of shenanigans he fell victim to. He would not explain, however, what occurred with the banker beyond calling it unprofessional conduct.

No Loans

As part of his pledge, he said, he refuses to take “one dime” in loans from the bank, and his directors are not allowed to borrow from the bank either. A number of financial institutions have run into trouble with regulators in recent years for lending too much money too often to their own owners and operators.

List searched for a bank for two years and made unsuccessful bids on two institutions before turning last summer to Orange City Bank, where his decade-long friend, William E. Diethrich, worked as a senior vice president and credit officer.

Orange City, with assets of $57.6 million at the end of the year, had run up losses totaling $3 million in the last two years and its capital was running low.

In an effort to reassure the community and bring his “own coloring to bear,” List took out small newspaper advertisements last February that announced the change in ownership and, in a throw-back to ads of yesteryear, showed a smiling List and urged customers to call his bankers and “tell them Dr. List sent you!”

Name Changed

The bank’s name was changed primarily because the existing name limited it geographically, said Diethrich, who became president and chief executive. Plans to give the bank a merchant banking orientation dictated a more general name that would allow its services to be marketed throughout the region, he said.

List said he plans to pump $3 million more into the capital base to help List American get involved in Pacific Rim activities and become the Orange County area’s dominant bank.

That might take a while, even for List. At the end of 1985, List American was the 16th largest full-service bank based in the county. Three Orange County-based banks were more than triple its size.

Diethrich said the bank may expand by acquiring another institution.

“If you don’t have big plans, you don’t get anywhere,” Diethrich said.

Still, both men emphasize that growth will be “slow, orderly and conservative.”

The bank was List’s second major investment in Orange County last year. In October, he announced plans for a $20-million, 224-room Holiday Inn in Huntington Beach. He said he has sold all of a $5-million syndication involving two dozen partners in the hotel, which is under construction off Beach Boulevard at the San Diego Freeway.

Doesn’t Know How Much

List claims that he no longer knows how much he makes or how much he is worth, though he is very much a hands-on developer with detailed knowledge of each project.

He has three major housing developments in California, for instance, that he expects will bring him $150 million within three years.

Two weeks ago, he turned down a purchase offer of $40 million--which he said would amount to a $30 million profit--for his 7 1/2-square-mile International Aerospace Centre development outside the main gate of Falcon Air Force Station, about 15 miles east of downtown Colorado Springs.

The aerospace center, he said, would double in value a week later when the Pentagon would (and did) pick Falcon as the site of a $1-billion-plus control center for computer simulation tests of space and ground-based weapons under President Reagan’s controversial Space Defense Initiative (SDI), often called “Star Wars.”

“It’s going to be a big thing,” said James V. Hartinger, a retired Air Force general who advises List. “Any aerospace or computer companies that want to be part of this will have to come here.”

Nerve Center

Last September, Falcon became the site for the military’s $1.4-billion Consolidated Space Operations Center, the nerve center for all military space activities.

Since he first invested in commercial property in Colorado Springs in 1977, List has been so enthusiastic about the possibilities for military and space research there that he formed a nonprofit corporation earlier this year called, naturally, the List Institute for Strategic Exploration of Space. He hopes industry worldwide will fund the institute over the next few decades with up to $200 billion. He already has laser and solar researchers and patent holders signed up to work under the institute’s auspices.

“I’m convinced the Soviets have not changed in 70 years and are not about to change,” he said. “Their aggressive posture is intended to conquer the world, and as such, something must be done if there is going to be a free world. SDI intends to accomplish this, cost effectively.”

Hard years in Poland’s forests during World War II not only left him with bitter memories but also molded his passionate views about life, politics, Arabs and his fellow Jews.

A Survivor

If anything, List is a survivor. Born in 1929 in a speck of a town called Pilzno in southern Poland, List was only 9 years old when Germany invaded and his father sent him out to learn survival techniques.

“My first anatomy lessons did not come at the University of Bern--that came many years later. My first anatomy lessons were on how to pierce hearts and lungs and spleens,” List said. “That’s how I survived.”

By 1942, he said, it was clear that the Germans were sending Jews to concentration camp gas chambers, and his father vowed to die fighting in the woods. His mother and two sisters were shot to death and, two months later, a German grenade killed his brother and ripped open his father’s chest. As he watched from afar, he said, he saw a soldier kick his father and demand to know where he got the guns. When his father spit at the soldier, List said, the soldier shot him. List was 13 at the time.

Boils With Anger

During three years in the forests, List and his cohorts dreamed of America and believed that the Americans would help them if only the nation was aware of what was going on. But he boils with anger in blaming President Franklin D. Roosevelt, the Democratic leadership and the American Jews who supported them for curtailing Jewish immigration.

“If I had it my way, I would like to see Roosevelt tried posthumously as a war criminal not for what he has done, but for what he failed to do,” List charged. “He shut the doors closed and that was a criminal thing to do in the face of an extermination program that was well known to him.

“And I am furious about American Jewry that they supported him and that they retained these loyalties to the Democrats for years,” List said.

Alone at the end of the war, he went to England briefly, then to France to train concentration camp survivors and other Jews to fight for a new state of Israel in the Middle East. He fought for two years in Jerusalem and other cities in what was then Palestine. Shortly before his 20th birthday, in 1949, he came to the America he had dreamed about.

“America is the most unique place on earth,” he said. “In this tapestry that is America, here you can aspire, if you are native-born, to be president. In this dream, you can dream to be anything--within the law.”

Became Gospel

List’s belief in America became gospel. “He (List) always told me about all the good opportunities in America, that anybody can make it in America,” said Dr. Arthur Strick, a former Hoag Hospital associate.

Like many immigrants, List began working at low-paying jobs. But while he swept floors in Wall Street offices, he went to night school, earned a high school degree in 18 months and won a college scholarship.

After graduating from Columbia University--with “an ivy league crowd who only worried about cars and panty raids”--he immersed himself in a five-year program, trekking to Bern, Switzerland, to study medicine in the winter and then to the New York mountain resorts to work as a busboy in restaurants in the summer.

List became a specialist in cancer research and treatment, eventually working at the Memorial Sloan-Kettering Cancer Center in New York. In 1967, “tired of living like a pauper,” he arrived in Newport Beach in his Nash Rambler and set up practice as one of only two cancer specialists in the county.

Real Estate as Hobby

Still alone--the parents of an Ivy League woman severed a budding romance--List took up the real estate business as a hobby.

“His fun is his business,” former Hoag colleague Hinrichs said. “But he had no family to be concerned about. That makes a difference because he could take enormous risks.”

List gambled big and won. He quickly turned his hobby into a second business as he bought and sold or purchased and developed small shopping centers, apartment buildings, commercial buildings and housing tracts. In cashing out a partner in 1977, he acquired a small, foundering shopping center in Colorado Springs.

“Once there, the consolidated space center got me going,” he said. “How many are there in the world? There are only two in the United States--Houston and (Cape) Canaveral. I wasn’t going to lose out like I did in Orange County,” by dropping his attempt to acquire the Irvine Co. “I wanted to take full advantage of what was becoming another Orange County,” he said.

For List, his new career was as exacting as his medical career, and he put the same intensity into it.

“I want to know where the last nail went in and how much it cost,” List said. “I scream like hell and I kick ass. I’m known as a son of a bitch, but a son of a bitch with integrity. They don’t have to like me, but they have to respect me. . . . To build empires, you have to be a certain kind of breed.”

Rewards for an Emperor

The rewards for an emperor can be plentiful. List enjoys fine food and wine, classic English literature and a personal art collection that includes the works of Picasso, Monet and Chagall. He has two homes--his long-time Corona del Mar house and one in an exclusive, gated Colorado Springs community that he developed--and he has a Rolls-Royce in each city to cushion his portly frame.

Being an emperor, however, takes its toll in other areas. He has few close friends, works 16-hour days and remains a loner, though he said he is dating one Colorado woman regularly now.

He worked at his medical practice and land business to the point of exhaustion, said former medical colleague Fier, who treated List for exhaustion in 1982. While Fier urged List to sell his land holdings, List decided instead to get out of medicine.

It was physician burn-out as much as real estate that sent List packing to Colorado. Knowing he often could only prolong for a short time the lives of children and young people as well as the elderly among cancer patients, he said, he was fast reaching the point where talking to them and their families and signing death certificates daily was becoming difficult.

“Cancer diseases are not easy to treat,” he said. “You see a lot of human misery. It’s enough to drive you up the wall.”

But now, as he contemplates another career move, he worries that financial services “won’t be enough” for him to do, he said.

He needs to keep working, he said, for his List Foundation. The foundation has become his passion, his lifetime ambition.

He argues that the purpose of making money should not be just to make more of it, but to put it to good use for mankind. He likens his foundation to the Ford and the Rockefeller institutions, and he vows that he will not rest until he funds it with one 10-figure check.