Kluge Leads Richest List; Walton Slips : Four Orange County Developers Again Make Forbes’ Hit Parade
Metromedia Co. Chairman John Werner Kluge is worth an estimated $5.2 billion, but he had to back into first place on Forbes magazine’s annual list of the 400 richest Americans.
Kluge displaced Sam Walton, head of the Wal-Mart stores discount chain, who divvied his $9-billion fortune among himself and his four children and ended a four-year reign as Forbes’ wealthiest person.
Four Orange County moguls made this year’s list, with Irvine Co. chairman Donald L. Bren and his $1.85 billion fortune leading the way at No. 19. William Lyon, Richard J. O’Neill, and George L. Argyros rounded out the list of county kingpins, all of whom made their money in real estate development.
Among other notables on the list, developer Donald J. Trump compounded his already considerable fortune and financiers Michael Milken and Carl C. Icahn joined the billionaires club.
Overall, Forbes’ richest are worth an estimated total of about $269 billion, up nearly $50 billion from the previous year, a 22% increase that substantially outpaced last year’s 4.4% inflation rate.
By comparison, the total wealth of the richest would come just short of bailing out the nation’s failed savings and loans over the next 30 years, the cost of which was estimated by Congress at $285 billion.
The list, released Monday, appears in the Oct. 23 edition of Forbes and is based on estimated holdings as of Sept. 8.
The prototypical member of Forbes’ ultrarich was a 63-year-old male with 3.1 children who has been married 1.4 times with a net worth of $672 million last year, more than the gross national product of Lesotho, Forbes stated.
For the richest, the last year has been a very good one. Many of the wealthy rebounded nicely from the October, 1987, stock market crash.
The number of billionaires increased to 66 from 51. The minimum net worth to make the list rose to $275 million from $225 million.
All four Orange County men on the Forbes list are repeats from last year. The local roster lost one entry when Harry H. Hoiles--heir to the Freedom Newspapers fortune and estimated to be worth $400 million this year--moved from Santa Ana to Phoenix. The county also didn’t get credit for California Angels baseball team owner Gene Autry, who lists his residence as Los Angeles.
Manufacturing was the most used route to success for the Forbes 400, accounting for 80 listings. Real estate, the preferred method for getting rich in Orange County, was second with 77 entries.
One of the county’s leading developers, the Segerstrom family, again made Forbes’s list of America’s wealthiest families with a fortune estimated at well over $500 million. C.J. Segerstrom & Sons, headed by Henry Segerstrom, owns South Coast Plaza and has developed much of the surrounding area.
At the pinnacle of the Forbes 400 was Kluge, 75, of Charlottesville, Va., whose holdings rose an estimated $2 billion from last year, thanks to a tripling in the value of his holdings in cellular telephones, Forbes said.
Kluge moved up from the No. 2 spot. The magazine noted that “klug” in German means smart.
For Walton, charity began at home. The 71-year-old from Bentonville, Ark., who milked cows during the Depression to support his family, split his Wal-Mart and other assets equally with his four children. While the family’s total holdings increased to $9 billion from $6.7 billion, the individual family members tied for 20th on the list.
Moving up to second from 12th place was investor Warren Buffett, 59, of Omaha, Neb., the head of Berkshire Hathaway whose stock market-based fortune nearly doubled to $4.2 billion. Behind him was Sumner Murray Redstone, head of National Amusements Inc. and entertainment giant Viacom, with $2.88 billion.
New Billionaires
America has more billionaires than any other nation--Japan is second with 41--but the richest of the rich live abroad.
Kluge’s fortune makes him the ninth-wealthiest private individual in the world, according to Forbes. He is topped by six Japanese, a South Korean and Canadian publisher Kenneth Roy Thompson. Japan’s Yoshiaki Tsutsumi, who made his money in land, railroads and resorts, is worth about $15 billion, Forbes said.
Eighteen new billionaires joined the Forbes American list, including Laurence and Robert Tisch of Loews Corp. at $1.36 billion apiece; entertainment mogul Kirk Kerkorian at $1.29 billion; indicted junk bond financier Milken at $1.27 billion, and TWA boss Icahn at $1.2 billion.
Trump also was among the individual standouts, adding $700 million to his empire of hotels, casinos and an airline for a $1.7-billion total.
For the second straight year, the youngest self-made billionaire was 33-year-old William Henry Gates III at $1.25 billion. Gates dropped out of Harvard University to found Microsoft in 1972.
St. Louis beer and baseball magnate August Anheuser Busch Jr., who died on Sept. 29 at age 90, was included on the list with $1.5 billion. Forbes said it compiled its profiles before the death.
The youngest on the list is 32-year-old Caroline Marie Getty, daughter of the late George Getty, with her $330-million inheritance. The oldest of the wealthy remained 94-year-old Mansfield Freeman of Greensboro, Vt., who holds a stake in the insurer American International Group, with $360 million.
Among the losers were real estate investor and builder Fred Trammell Crow, whose net worth, Forbes estimated, sank to $300 million from $775 million, thanks to softness in commercial real estate. Penthouse publisher Bob Guccione slipped into something less comfortable and dropped off the list.
New York Address
The list contains 346 men and 54 women; 159 inherited their wealth; no one from Maine, North Dakota or Alaska qualified; Yale had 22 of the richest, Harvard 17 and the University of Pennsylvania 12; the 45 with master’s degrees in business had an average net worth of $895 million, while the 10 high-school dropouts had an average of $854 million.
About 20%, or 82, of those listed live in or near New York City, with Los Angeles second in plutocratic residences with 32 and San Francisco third at 19.
Publisher Malcolm Forbes included his own biographical data and reported estimates of his net worth but refused, as usual, to divulge his wealth. Forbes’ sketch was included in the under $500 million category.
Donald L. Bren, Newport Beach
Forbes ranking: 19
Estimate: $1.85 billion
As real estate prices have stabilized, so has the fortune of the county’s largest landowner. The 57-year-old owner and chairman of the Irvine Co. saw his net worth triple from 1986 through 1988, according to Forbes, but Bren’s stash has not grown since last year.
Born to Hollywood wealth--his father, Milton Bren, was a producer and real estate developer--Bren borrowed $100,000 to start a home construction business after he left the Marine Corps in 1958. He sold the company to International Paper in 1969 for $34.5 million and bought it back for less than half that three years later.
Bren’s big move came in 1977, when he and several partners bought a big chunk of the Irvine Co. for $337 million. After reportedly clashing with his partners, he bought them out in 1983 for $525 million and later increased his interest in the huge real estate firm to 92%.
William Lyon, Coto de Caza
Forbes ranking: 283
Estimate: $350 million
A retired Air Force general, Lyon started a construction company with his brother in 1954, focusing on inexpensive homes for first-time buyers. The company grew to be one of the biggest construction companies in the nation and last year captured the top spot on Professional Builder’s list of largest home builders.
Lyon also did well with his 1981 acquisition of bankrupt AirCal, bought in partnership with fellow Orange County Fortune 400 mogul George L. Argyros. After running the company for five years, Lyon pocketed about $15 million when the partners sold the carrier to American Airlines.
A longtime Republican Party activist, the 66-year-old Lyon has gained some unwanted headlines recently in connection with the Department of Housing and Urban Development corruption scandal. A House of Representatives subcommittee is investigating whether Lyon’s company received preferential treatment when it bought the 827-acre Robinson Ranch in southern Orange County from the agency in 1985.
Richard J. O’Neill, San Juan Capistrano
Forbes ranking: 356
Estimate: $300 million
O’Neill and his sister, Alice O’Neill Avery of Los Angeles, made their fortune the old-fashioned way: They inherited it. To be more precise, they inherited the family farm--Rancho Mission Viejo--which they have slowly carved up and developed.
In the mid-1960s, the O’Neills joined with Donald Bren and others to form the Mission Viejo Co. with the objective of building a planned community on 11,000 acres at the north end of the ranch. They later sold the company and the land to Philip Morris for $72 million, and now have another town in the works: the 5,000-acre Rancho Santa Margarita, headed by Alice’s son Anthony Moiso.
Richard O’Neill, a disheveled 66-year-old known to some as “Uncle Dick,” is a former county and state Democratic Party chairman. His other holdings include restaurants and ranching interests in Mexico and Nevada.
George L. Argyros, Newport Beach
Forbes ranking: 386
Estimate: $290 million
After making his first appearance on the Forbes list last year, Argyros padded his portfolio when he agreed to sell the Seattle Mariners baseball team earlier this year for $76 million--nearly six times what he paid for it in 1981.
But most of Argyros’ money comes from real estate. Born in Detroit, raised in Pasadena, and educated at Chapman College in Orange, Argyros got his start in real estate as a broker and then turned to development with a small strip shopping center in Tustin. His company, Arnel Development, has built 700,000 square feet of office space and 5,500 apartments in the county over the past two decades.
A hard-driving 52-year-old who fixed great wealth as a goal from an early age, Argyros also teamed with William Lyon to buy AirCal in 1981.
