Field of Play : New Owner of the Padres Liked Trip Around Bases on Way to Business Success

It is no easy task to capture the essence of a former supermarket clerk who, in the past quarter century, has parlayed a $1,200 loan and a fervent desire to be his own boss into a business and sports empire estimated at more than $200 million.

Especially when the same man is as likely to get personal notes from Richard Nixon as he is to prance on a baseball dugout while singing “Take Me Out to the Ball Game,” is as content going out for a hamburger at Coco’s as he is traveling on his private jet, is credited with almost single-handedly saving a college from financial ruin and is a major donor--spell that with lots of zeros--to various charities, and buys and sells airlines and professional sports franchises as frequently as most people buy automobiles.

But one of his closest friends believes that a single line in an essay by Robert Louis Stevenson comes as near as any can to distilling the spirit, style and energy of George Argyros, the 50-year-old multimillionaire Orange County real estate developer who is planning to become the San Diego Padres’ new owner.

Philosophic Compass

In “El Dorado,” Stevenson wrote: “To travel hopefully is a better thing than to arrive.” That attitude, says Chapman College President G.T. (Buck) Smith, has served as a trusted philosophic compass for Argyros in his personal and professional life.

“That’s George through and through,” said Smith, whose Orange County campus has benefited mightily from Argyros’ largess and hard work. “He never totally arrives. No matter how successful he is, there’s always a new horizon, a new challenge. He’s always extending, reaching, grasping to do more or to do something better.”

The goal that Argyros (pronounced AR-jur-us) will seek in San Diego is one that has eluded him during his six frustrating years as owner of the lowly Seattle Mariners of the American League--a World Series victory.

Accustomed to reaching the pinnacle in his business dealings, Argyros says he will settle for nothing less in baseball--a lofty aspiration for someone whose Seattle team never even rose to the level of mediocrity and who gained a reputation during those painful years as a tight-fisted, hard-headed owner who failed to grasp that developing a successful baseball team is far different than building apartments.

Those who know him, though, say that it has never been a smart wager to bet against Argyros on anything. And, if Argyros does find a way to bask in October glory with the Padres, it probably will be through the same formula that he used to amass his personal fortune while riding the crest of the Orange County real estate boom, first as a broker and later as a developer.

“Much as I’d like to say it was all brilliance or genius, a lot of it was just plain hard work and timing, being in the right place at the right time,” Argyros said in an interview last week in the Costa Mesa offices of his Arnel Development Co. and Affiliates. “And I really believe that’s the way most things get accomplished.

“I’m typically what one would call a fellow who’s done it on his own. I had to earn my own way, and I’m proud of that. I love a challenge, I’m not afraid to take risks and I like to win . . . I feel very fortunate, but I don’t take myself too seriously because I know where I started and never forget it.”

Native of Detroit

Born in Detroit to second-generation Greek-Americans, Argyros and his middle-class family moved to Pasadena when he was 10. He attended Michigan State University and graduated from Chapman College in 1959, where he majored in business and economics while working 50 hours a week to support himself.

In the early 1960s, Argyros worked for a Mayfair supermarket in Palm Springs, rising from one-time box boy to manager. However, by the time that he and his wife, Judie, were married in 1962, Argyros had concluded that that career path would never enable him to realize his boyhood ambition of becoming an entrepreneur who worked for himself.

“As real-world reality set in, I recognized that someone with no capital had a very difficult time accumulating enough or borrowing enough money to open his own supermarket or any business,” Argyros said. “I recognized that to make money, you had to be near it.”

That conclusion prompted Argyros to spend a year obtaining licenses to sell securities, insurance and real estate. After rejecting securities and insurance sales--”In one, you’re selling an intangible, and in the other, you’re betting against yourself, which I find foreign and depressive”--Argyros ultimately opted for a career in real estate.

To help get his fledgling business off the ground, Argyros borrowed $1,200 from a bank to tide him and his wife over for several months until she could start a teaching job as a speech therapist.

Became Developer

After spending a short period as a broker selling land to developers and helping put together commercial deals for others, Argyros decided that the best way to acquire “real serious money” was to become a developer himself, a transition that he initiated in 1963 via a strip shopping center in Tustin that was his first major project--noteworthy only for having the first Spanish-style Orange Julius.

By the mid-1960s, Argyros, who by then had a thriving business in office and shopping-center development, detected a growing market for apartment housing in Orange County.

“The apartment niche looked real promising,” Argyros recalled. “There was a downturn in the economy at the time, and I wanted to be ready to move by the next turn.”

His company completed its first apartment project in 1968, “and the rest, as they say, is history,” he said, smiling broadly.

That would not be the last time that Argyros would display the amalgam of timing and risk-taking that many industry experts regard as the cornerstone of his uncanny business acumen.

“Some might call it daring or gambling, but he can sense opportunities that others perhaps cannot,” said Tawfiq Khoury, a prominent San Diego developer who is Argyros’ partner in a $20-million San Diego residential project. As an example, Khoury cited Argyros’ $62-million purchase--along with partner William Lyon--of AirCal after a bidding war with now-defunct Air Florida in 1981, a period when deregulation was producing major turbulence in the airline industry, particularly for regional carriers.

Charles (Red) Scott, president of Intermark and past president of the San Diego Sports Assn., said: “I told him I thought he was a damn fool and had just made the biggest business mistake of his life.”

AirCal Purchase

That perception seemed to be reinforced when, shortly after Argyros’ AirCal purchase, the nation’s air traffic controllers went on strike, exacerbating the chaos in the industry.

Far from being a blunder, though, Argyros and Lyon, in Khoury’s words, ultimately “came out smelling like a rose” by dramatically improving the airline’s fortunes through management reorganizations, key route changes, layoffs and pay cuts. Within five years, they doubled AirCal’s number of planes to 40, increased the airline’s staff by more than 30% to about 3,300, and offset the pay cuts through profit-sharing dividends to workers. When American Airlines bought AirCal’s parent company last year, the two men shared a reported $30-million profit.

Over the last two decades, Argyros’ firm has built about 5,500 apartment units and developed more than 700,000 square feet of commercial office space, mainly in Orange County. During that time, his Arnel Co., which now has about 170 employees, grew “gradually, very quietly, doing nothing in a big way,” Argyros said, building primarily garden-style apartments that he describes as “rather mainstream” in the $650-$1,300-per-month price range. The complexes built by Arnel range in size from 48 to 724 units, with the average being about 250.

Widely described as a “quality” builder, Argyros believes that reputation stems largely from the fact that his company, unlike other developers who repeatedly build and sell projects for quick profits, has retained ownership of and still manages all but about 500 of the apartments it built.

‘Pride of Ownership’

“When you plan to hold onto something for the long term, the pride of ownership manifests itself in the quality that you put into it,” he said. “Besides, my goal was really cash flow, not income. I’d rather develop a piece of property, hold onto it and manage it well than I would to build it, sell it, pay the taxes and then have to reinvent the wheel again and again and again.”

Another factor in that approach is that Argyros takes comfort in the notion that, because real estate takes time to acquire, develop and sell, “you can’t panic yourself into a bad move.”

With a growing inventory of apartments that had been built with low, fixed-rate mortgages, Argyros was perfectly positioned to reap the benefits of the real estate boom in Orange County in the 1970s.

Even as his company grew, however, Argyros and Arnel maintained a deliberately low profile. The firm has never produced brochures describing its business ventures or history, provides only sketchy biographical information about Argyros himself, and, because it is privately owned, does not report annual earnings or revenues. Argyros had to be pressed to acknowledge that he is Arnel’s sole stockholder, but he has partners in some of its outside investments.

“Image and public relations really do not seem to concern him that much, which is very unusual for most companies of that size,” said real estate consultant Sanford Goodkin.

Low-Key Style

That low-key corporate style stems both from Argyros’ self-described “aversion to run around and pound on our chest” and his superstitious recollections of “watching businesses go under” shortly after their top officers appeared on the cover of the former Executive Magazine--the real-estate equivalent, perhaps, of the so-called “Sports Illustrated Jinx” in which many high-flying teams and athletes have experienced losses after their appearance on that magazine’s cover.

“Why take chances?” Argyros asked, half-joking.

Argyros’ business associates describe him as an aggressive, demanding individual who delights in--and financially rewards--subordinates’ accomplishments. They also say he is a tough, scrappy negotiator whose word is golden.

“He fights for what he wants, but I’ve never known him to make a promise he didn’t follow through with,” said Ron Dunlap, who was the top executive in King County, Wash., when Argyros bought the Mariners in 1981.

“George has an intensity that some may interpret as gruffness, but he’s no more demanding of others than he is of himself,” added Les Duryea, a Newport Beach lawyer who is Argyros’ partner in a financing business. “In truth, George is a grinder, but in the best sense of the word. He’s a person with very high standards of performance that bring out the very best from people around him, whether they’re his employees or volunteers.”

That characteristic also has been in evidence throughout Argyros’ 14 years of service on the Chapman College board of trustees, including the last 11 as its chairman.

Halted College’s Skid

Plagued by rising fuel costs, the same declining enrollment problems that afflicted other private schools and a lack of leadership on campus, the small Orange County college found itself on the brink of bankruptcy with a $4-million debt when Argyros joined the board.

Since then, Argyros has helped restore the college’s financial health by donating millions of his own dollars, raising millions more from the growing Orange County business community and attracting a new president, Smith, who also is known for his fund-raising abilities.

In keeping with the style that he exhibits in most of his business dealings, Argyros’ own donations were made quietly, without fanfare. Smith recalled one incident in which Argyros, dressed in a Santa Claus suit for a children’s Christmas party, privately passed him an envelope containing a $500,000 stock gift and said simply, “Merry Christmas to the college.”

“There’s a very big do-good attitude on George’s part as it relates to Chapman, but being an alum is only a small part of it,” said lawyer Duryea, who also is a Chapman trustee.

Orange County Republican Chairman Tom Fuentes said, “He’s a true American Horatio Alger story who, corny as it sounds, believes that this country and this community have been very good to him and wants to put something back. His support for education is one of his ways of doing that.”

In addition to his work on Chapman’s behalf, Argyros also serves on the board of the Independent Colleges of Southern California. Because Argyros is, as Fuentes put it, “on the A-list of mega-names” in Orange County, he also is a frequent contributor to conservative Republicans who share his free-enterprise philosophy. He also has a wide range of charitable interests, with some of his largest donations going to abused children programs, the Orange County Performing Arts Center and the Boy Scouts.

‘Has a Big Heart’

“George has a big heart and says ‘yes’ an awful lot,” said Don Yoder, an Orange County businessman and close friend of Argyros. Similarly, others relate numerous anecdotes about Argyros’ small kindnesses and courtesies, ranging from flying a friend with cancer with him to the Mariners’ spring training camp, to profuse apologies for being late, to showing genuine concern for the problems of even casual acquaintances.

Loyalty is a trait that Argyros both inspires and freely exhibits toward others, as evidenced by the fact that many of his top executives have been with him for more than a decade. Moreover, when former Orange County Supervisor Bruce Nestande resigned early this year after investigations in connection with the political corruption probe involving Anaheim fireworks manufacturer W. Patrick Moriarty, Argyros, who has known Nestande for 20 years, did not hesitate to offer him a job in his firm.

“In fairness to Bruce, I talked to him about whatever those allegations were, and he’s assured me there’s nothing to it, and I have to believe him,” Argyros said.

Brought up in a close-knit family that he describes as typical among Greek-Americans, Argyros says his own family--which includes a 22-year-old son and two teen-age daughters--is the top priority in his life, far superseding anything in his business or sports enterprises.

However, his ownership of the Mariners--and, in particular, his frequent trips to Seattle--produced personal strains that led to a brief separation from his wife last year. The couple has since reconciled, however, and will celebrate their 25th anniversary later this year.

Stress of Travel

“As the children got older and didn’t want to pick up and go to Seattle all the time, I became torn between not wanting to leave them alone and wanting to travel with George to be with him, which I felt was my first responsibility,” Judie Argyros said. “It was a major logistical problem.”

Argyros’ desire to own a baseball team closer to his business interests and his Newport Beach home played a major role in his decision to purchase the Padres. After six years of enduring three-hour flights to Seattle, sometimes several times per week, Argyros said he relishes the prospect of a 20-minute flight to San Diego in his private jet.

He and his wife also are studying other options that could simplify the commute to San Diego Jack Murphy Stadium, including the possibility of building a home on property they own in San Clemente--where he and two friends bought the site of the former Nixon Western White House compound--or perhaps even moving to San Diego.

Regardless of whether he moves, though, Argyros said he expects to become a major figure in San Diego social and cultural circles--something he did not do in Seattle, where, despite his frequent visits, he was widely perceived as an absentee owner.

A slightly stocky, bespectacled man with dark hair, Argyros is, his wife says, a person who “thrives on friendship and is miserable when people aren’t around.” His friends say that he has a good sense of humor, though his wife quipped that “he’s been telling the same two jokes for 27 years, and usually gets them mixed up.”

In private, Argyros displays a quick wit, which he often directs at himself in a gentle self-deprecating manner, as illustrated by how he parried a question about the widespread praise of the alternately bold and cautious timing of his investments.

Jokes About Timing

“Boy, on timing, you’re talking to the wrong guy,” Argyros said, laughing. “I bought a baseball team and a few months later, the players went on strike, and then I bought an airline, and the air controllers went on strike. Some timing, huh?”

Those jokes notwithstanding, Argyros’ success has produced a glamorous life style featuring travel in private jets or a chauffeur-driven Rolls-Royce, exotic foreign vacations and frequent visits to his condominiums in Sun Valley, Idaho, and Indian Wells. By his own account, an “active but average sportsman,” Argyros is an avid tennis player, downhill skier and golfer.

Though glitzy parties or other commitments usually occupy at least several of their nights weekly, Judie Argyros says she and her husband cherish the infrequent quiet moments “when we can just get casual and slip out for a hamburger and a movie.”

Chapman’s Smith says, “Believe me, this is a guy who’s just as happy--or maybe even happier--sitting at Coco’s with a couple of old friends as he is doing any of the glittery things in his life.”

When he turned 50 two months ago, Argyros received a personal note from former President Nixon, for whom he had raised money during his political career. But Argyros and those around him say that the personal milestone of turning 50 has not dampened his drive or caused him to reflect more on his already substantial accomplishments than on future goals.

“The pleasure isn’t so much in dwelling on past successes, but in planning new ones,” Argyros said. “At this point, my business is important not to make more money, but to see people develop and accomplish things and be active on the part of a great society . . . If I can make a positive contribution in whatever way, that’s how I derive my satisfaction.”

Smith, meanwhile, expressed a consensus opinion among Argyros’ friends and associates when he said that he believes there “will always be mountains for George to climb.”

“Maybe it’s winning the World Series, maybe it’s improving education, but George will always find a challenge that keeps him from becoming complacent,” Smith said. “But the worlds he wants to conquer now are not ones that will make George Argyros a richer man. He spent 20 years making a fortune, and now I think he wants to spend 40 years making the world a better place.”

GEORGE ARGYROS ON:

His reaction to the celebrated incident in which the late Ray Kroc once grabbed the public address microphone at San Diego Jack Murphy Stadium and apologized to fans for his team’s dismal performance:

I’d have liked to have done that lots of times in Seattle. But after a while you learn that it’s a very long season and every game isn’t a life-or-death affair.

Whether player salaries are, in general, too high:

The real problem isn’t that they’re too high, but that so much of the risk has been eliminated through long-term guaranteed contracts. Individuals need to be challenged and face risks. When you eliminate the risk, performance usually drops off. There’s less incentive to excel.

Mistakes he made in Seattle that he hopes to avoid repeating in San Diego:

Well, I called the dugout once when (pitcher) Gaylord Perry was getting bombed. I think (Manager) Rene (Lachemann) just dropped the phone on the other end. I wasn’t wrong in what I was trying to accomplish. Gaylord was a friend and I didn’t want to see him embarrassed. . . . Besides, every new owner is entitled to do something stupid. I don’t know if we’re entitled, but we certainly do it.

His low-key, circumspect style in business:

Basically, I don’t like the word ‘I.’ I don’t crave the publicity. What’s important isn’t me or the company, it’s the product we put out on the market. My attitude has always been that the product should stand on its own.

The controversy over Los Angeles Dodger executive Al Campanis’ nationally televised comment that blacks lack “the necessities” for top management jobs in baseball, and his subsequent firing last week:

It’s a terrible tragedy. I’ve known Al for a number of years, and I don’t think he’s prejudiced at all. I think it was just an unfortunate slip. It’s a shame that his baseball career has to end on such an unhappy note. . . . It’s all colorless to me. We don’t happen to have any (blacks) in the front office in Seattle, but I think two of our five coaches are black and they’re certainly in other parts of the organization. Color is just absolutely not a factor with me. (Former Mariners Manager Maury Wills is one of only three blacks who have managed a major-league baseball team.)