Builder-Activist Nathan Shapell Is Driven to Develop Some Big Ideas

Times Staff Writer

As a developer and as chairman of the Little Hoover Commission, a public watchdog agency, Nathan Shapell has forged a reputation as a take-charge guy. Several years ago, during a commission meeting, Shapell told a federal education official that California's schools were a mismanaged mess.

"They could turn it over to me and I could run it," said Shapell, a millionaire Beverly Hills developer. "You go back to Washington and tell Ed Meese that Nate Shapell says we've got to clean up this mess."

Even by Shapell's standards, he has plenty to keep him busy these days. Shapell, 69, is the man behind an ambitious $2-billion proposal to develop 1,300 acres in the Porter Ranch area of Chatsworth. The rolling hills just north of the Simi Valley Freeway were purchased in the late 1970s from California Federal Savings & Loan by Shapell's Beverly Hills company, Shapell Industries, and by Liberty Building Co. of Beverly Hills.

3,000 Homes Planned

Shapell's company owns 75% of Porter Ranch Development Corp., which last month announced plans to develop 3,000 homes and 7.7 million square feet of office and retail space on the site over the next 30 years.

But his plan is still only in the idea stage. The first public hearing on the proposal is scheduled for later this month. Northwest San Fernando Valley residents and merchants have already voiced concern about the proposal. "Our major concern at this point is the traffic because that's a phenomenal project in size and scope," said David R. Miller, president of the Granada Hills Chamber of Commerce. "There's also a concern that a complex that size would ruin the small-business community in Granada Hills and Chatsworth."

Porter Ranch Development representatives have maintained that the fast-growing West Valley needs the additional housing and can accommodate the proposed 1.5-million-square-foot regional shopping center.

If Shapell pulls it off, it would be one of the biggest land developments in the history of Los Angeles County. But Shapell has overcome long odds before.

"He is a hard-driving person," said Richard C. Mahan, a vice president of Shapell Industries. "He wouldn't be alive today if he wasn't a hard-driving person."

Shapell is a survivor of the notorious World War II death camp at Auschwitz. After the war, Shapell worked in Germany finding housing for displaced people in the community of Munchberg. In the 1950s he and his brother David and brother-in-law Max Webb moved to the United States and settled in California, convinced that its real estate market offered plenty of growth. After a few years they began their own real estate development company.

Privately owned Shapell Industries did about $400 million in sales last year and employs 425 people, Mahan said. Shapell continues to run things as chairman and president.

Shapell is no stranger to large projects. Among his 30 or so developments in California is the former MGM Ranch in Thousand Oaks, where Shapell is building more than 1,400 homes and a 102-acre industrial park.

Shapell also is building the 860-acre planned community of Eastlake Village in Yorba Linda and the 600 luxury home community of Kite Hill in Laguna Niguel. Shapell and builder Jona Goldrich are partners in the $60-million Promenade Towers, a 510-unit apartment project in downtown Los Angeles.

Shaped Character

Shapell's experience in Europe during and after the war helped shape his management style of tempered ruthlessness, associates said. One former Shapell employee, who asked that his name not be used, left Shapell Industries after several years because of the pressure. "There were some very bright people who couldn't take it," he said.

But the other side of Shapell is the community activist, the giver to charities, the crusading chairman of the Little Hoover Commission. "That's the humane side of him, or the feeling that he owes it to society," the former employee said.

Panel Investigations

Under Shapell's chairmanship since 1975, the Little Hoover Commission has conducted about 75 inquiries attacking mismanagement or waste in agencies ranging from local school districts to the state Department of Social Services. And last year Shapell Industries made charitable contributions of more than $1 million, Mahan said.

Shapell, a Pole who changed his name from Natan Schapelski, has written "Witness to the Truth," a 1974 book about his experience as a prisoner at Auschwitz and as a postwar leader of Jewish Holocaust survivors in Munchberg.

In the book, Shapell wrote that Webb and several others at Auschwitz saved his life. One day guards were calling out names and serial numbers of those in Shapell's unit to be transported from the camp, and he hid in the lavatory. Later, Webb and others bamboozled the guards so that they stopped looking for him.

"To my knowledge, I was the only one lucky enough to escape like this, and to all of those men I owe a debt," Shapell wrote.

Shapell, who was traveling and declined to be interviewed for this story, in many ways is a private man. Shapell Industries went public in 1969, but Shapell regretted it almost immediately, Mahan said.

SEC, Stockholders

Shapell disliked the restrictions of the Securities and Exchange Commission and the scrutiny of Wall Street brokerage firms and stockholders who wanted ever-rising quarterly earnings from a business that is inherently cyclical, Mahan said.

Indeed, in the early 1980s when interest rates soared, Shapell Industries, like many developers, had a rough time. According to public documents, from 1981-83 Shapell Industries lost $25 million while averaging annual sales of about $50 million.

In 1984 the family bought the company back in a leveraged buyout for $35 million.

Shapell apparently believes in keeping control of his projects. In 1970 Shapell Industries expanded into Colorado and Illinois, but Shapell later abandoned those plans. "His feeling was, if you can't be on the site of the project within an hour by car or plane, it's too far away," Mahan said.

Pushed Housing Bill

Shapell's prominent role in state politics has not been without controversy. In 1981, Shapell, as head of a governor's appointed affordable housing task force, pushed a state bill that would have allowed a new commission to override local zoning laws and create up to five new cities anywhere it wished. The measure was eventually vetoed by then-Gov. Edmund G. Brown Jr.

But some who worked to defeat the bill, including Thousand Oaks city officials and state Sen. Ed Davis (R-Valencia), contended that Shapell, a major contributor to state politicians, wanted the bill enacted because his plans to develop the MGM Ranch property near Thousand Oaks had been frustrated by local zoning laws and the new bill could have helped him build more homes there.

Among those who opposed Shapell in the lobbying fight was Ventura County Supervisor Madge Schaefer, who was a Thousand Oaks councilwoman at the time. "When you're at war with Nathan, you know you're at war," Schaefer said. But she came out of the battle respecting him. Shapell "never lied to me," she said, while "there are some developers that are double-dealing and underhanded and sometimes down and dirty."

School Fee Dispute

That doesn't mean everybody sees things his way. Shapell is involved in a dispute with several school districts in the Santa Clarita Valley over developer fees that cover the cost of building new schools.

State law requires developers to pay $1.53 in school fees for every square foot of residential development. But Santa Clarita Valley voters in five school districts approved substantially higher fees in a 1987 referendum.

The California Building Industry Assn. sued the districts, challenging the constitutionality of the higher fees, and the issue is still tied up in courts.

Meanwhile, some developers, such as Newhall Land & Farming Co., have voluntarily agreed to pay the higher, disputed school fees. But Shapell, who is developing a 3,000-home project in Canyon Country, is holding firm and paying only what is required by state law. And that has created some hard feelings.

Need for Schools

"Shapell and all those others will build a house, make a profit and walk away and leave people in those homes with no schools," said Clyde Smyth, superintendent of the William S. Hart Union High School District in the Santa Clarita Valley.

In a related battle, last year two Santa Clarita Valley school districts sued Los Angeles County and Shapell, seeking to force county officials to reject building projects unless schools can accommodate growth in the area.

Many of the same issues, such as schools and traffic, are likely to arise as Shapell's Porter Ranch proposal receives consideration by the city of Los Angeles, Davis said.

Like many builders, Shapell keeps his attorneys busy. He or his company have been involved in about 75 lawsuits in the past decade.

In an effort to help sell his Porter Ranch idea to public officials, Shapell has hired some political talent. Paul Clarke, the political consultant and husband of former Rep. Bobbi Fiedler, is the proposal's public relations man. The project coordinator is Robert M. Wilkinson, who represented the area on the Los Angeles City Council from 1953 to 1956 and from 1967 to 1979.

Mall, Offices

The proposal includes 2,195 single-family homes and 800 condominiums. The commercial area would include the regional shopping center and an office plaza with buildings up to 15 stories high. Project officials said they have received inquiries from Nordstrom and May Co.

Porter Ranch Development officials are quick to point out that their proposal calls for spending $40 million to $50 million in traffic improvements such as new streets and computerized signal lights.

"Shapell is an honest man and he builds a hell of a house," said Davis. "But he is in a general professional group that is organized. They can kill anything that's going to be harmful to them. . . . They are heavy players, and they are very, very strong and they usually win."

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