Mission Viejo Co.’s Calif. Division Chief to Form Own Firm

Harvey Stearn, president of Mission Viejo Co.’s California division, said Thursday he will resign July 1 from the giant landowner and developer to form his own home-building company.

Stearn’s new company, Pacific Gateway Development Corp., will build houses in areas including two planned communities developed by Mission Viejo Co.: Aliso Viejo and Mission Viejo.

Mission Viejo/California stopped building houses in the county in 1987, the year Stearn became president, and has instead focused on developing and selling its land to builders.

“This is an exciting way to grow in my own business while continuing my long-term association with Mission Viejo Co.,” said a statement by Stearn, 51.

Hogan to Join Stearn

Horace Hogan II, a Mission Viejo Co. vice president, will join Stearn at Pacific Gateway. Neither man will be replaced, the company said.

Mission Viejo Co. is approaching a watershed in its history because much of Mission Viejo and Aliso Viejo is now developed. Properties as big as those are a lot harder to come by and a lot more expensive than in the days when Mission Viejo Co. was founded in 1963, with 10,000 acres of Rancho Mission Viejo.

Stearn joined Mission Viejo Co. in 1969, the year tobacco giant Philip Morris Cos. bought a majority interest in the firm. Stearn started as director of public affairs and held varied positions, including senior vice president of residential construction and marketing before becoming president of the California division.

While president, Mission Viejo/California clashed with slow-growth advocates and was the subject of a costly lawsuit filed by Laguna Beach and Irvine over development of 20,000 homes and 840 acres of commercial property in Aliso Viejo. The cities were concerned about additional traffic that the project would generate.

Became 27th County City

Stearn was also in office when Mission Viejo become the county’s 27th city in 1988. The new city initiated several fights with its creator, including a controversy over further development.

Operating profit for Mission Viejo/California and its parent companies more than doubled from 1987 to 1988. The companies have operations in both Colorado and California, but the big increase in profits was attributed primarily to its Southern California business.

Colleagues describe Stearn as quiet and businesslike. Gov. George Deukmejian appointed him to the California Arts Council in 1984; he has twice been its chairman.

Talk in the county’s real estate community Thursday was that Stearn may have left the company because he felt somewhat stifled by James G. Gilleran, 58, president of the California division’s parent corporation, Mission Viejo Co.

Gilleran Made Decisions

People who know both men said Gilleran made nearly all major decisions. By starting his own company, Stearn can call his own shots.

“It’s simply a great economic opportunity for Harvey,” said Thomas Blum, executive vice president of Santa Margarita Co., a major landowner in south Orange County.

Spokesman Wendy Wetzel refused comment beyond a prepared statement released by the firm.