Land Plan Opens Window on Hearst Rift

Subject to a will that threatens rebellious heirs with disinheritance, descendants of William Randolph Hearst are just now daring to break a long silence over the management of their legendary holdings.

The impetus for speaking out is the controversy over a proposed commercial development on the 77,000-acre Hearst ranch at San Simeon. The rare public disagreements have brought into view an underlying division between at least some members of the famous family and its hired managers.

Last week, the California Coastal Commission rejected a plan by the Hearst Corp. to build a vast oceanfront resort along a spectacular, largely empty stretch of the state’s central coast.

In the days leading up to the vote and since then, members of a family rarely heard from on such matters have criticized the development proposal and the way it was promoted by Hearst Corp. lawyers and lobbyists.

For at least a few of Hearst’s 35 adult heirs, the proposed development exemplifies a broader power struggle over the management of the family’s estimated $5 billion in assets.

“The San Simeon issue is a reflection of the fact that the corporation is essentially controlled by non-Hearst managers,” said William R. Hearst II, the leading dissident within the family.

Thick Veil of Secrecy

With its origins in 19th-century gold, silver and copper mines, the Hearst fortune today is largely invested in one of the nation’s largest media companies--the Hearst Corp.

But while several family members serve on the corporation’s board, the terms of William Randolph Hearst’s will vested control largely in the hands of non-family managers.

“My grandfather structured things the way he did because he didn’t place the same faith in his sons that he did in trusted lieutenants,” Hearst said.

That control is largely exercised behind a thick veil of secrecy.

Now, skeptical family members are trying to pierce that veil as they question whether the Hearst Corp. is being managed in the best interest of the family.

Hearst described annual business meetings where, he said, family members were prohibited from bringing in their own lawyers or accountants to help them understand the proceedings. He said he was barred from bringing a tape recorder.

But the corporation and its managers clearly have the support of some family members.

“William is good intentioned but poorly informed,” said his cousin, Austin Hearst, who lives in New Jersey and serves on the board of the Hearst Corp. “He [William II] is the kind of individual who is disgruntled and who has persuaded himself that everything the corporation is trying to do is some sort of conspiracy.

“I’m not going to say he doesn’t have both oars in the water. He just doesn’t understand all the complexities involved.”

The secrecy that has traditionally surrounded the family’s affairs has only deepened since the infamous kidnapping of Patricia Hearst in 1975. For more than 20 years, court documents pertaining to the family and any internal wrangling have been sealed to protect the names and addresses of heirs.

Partially as a result, the degree of disaffection within the family remains unclear, with only one other member, William’s sister Deborah Hearst Gay, openly taking his side.

“I feel like we’re being steamrolled,” Gay said in a recent interview with The Times. “I trust my brother. I support him.”

What is clear is that the San Simeon issue has opened a rare window into the family’s internal disagreements.

San Simeon has been central to the family’s public image--and its self-image--ever since William Randolph Hearst built the famous castle that has come to symbolize the wealth and power of the Hearst dynasty.

Their attachment to the place is rooted in memories of childhood experiences--riding horseback to picnics in remote canyons, looking for lizards along stream banks, swimming in one of the castle pools after the tourists had left or looking at home movies of Charlie Chaplin and other famous house guests.

Even today, although the castle now belongs to the state of California, family members are free to use the surrounding ranch and many of its buildings.

Interviewed over the weekend, several family members said they did not want to see commercial development on the property.

“That land is more a part of the family than a pawn in the corporation’s daily business, and I would really like to see it stay the way it is,” said Misty Hearst, who lives in California.

“Nobody wants to see that coastline change,” said Erin Hearst Knudsen, a Minnesota resident.

Phoebe Hearst, who managed the ranch with her husband for many years, said the corporation could realize a profit without developing the land if it sold the development rights to the state or to a conservation organization.

“I have been honking that horn for years because it’s a beautiful way of keeping the land natural,” she said.

Expressing a similar attachment to San Simeon, other Hearsts nevertheless said they resented the efforts of outsiders--environmentalists in particular--to determine what happens to the land.

“It is, obviously, beautiful, but one of the things I find personally difficult is the suggestion that while our grandfather built this wonderful place, the current generation can only erect a huge eyesore,” said William Randolph Hearst III, a cousin of William II and the former publisher of the San Francisco Examiner.

Austin Hearst voiced an ambivalence toward the ranch that appears to be widely felt within the family.

“Sure, we love it. If all that stuff in the plan was developed it would be outrageous,” he said. “If it were up to me, I wouldn’t even have any cows on the place.

“But the issue is value. And we voted for finding a way to retain the maximum value of the property,” he said.

In other words, land that can be developed is worth more than land that can’t. So, according to Austin Hearst, the Hearst Corp. merely sought changes in a local coastal plan for northern San Luis Obispo County that would allow development.

“Look at the corporation and you see hotels are not something it does. The corporation doesn’t want to develop the land. But it wants to maximize the value of the land. No one wants outsiders to fix the value at a lower price, and that is what the state is trying to do.”

With its decision last Thursday, the Coastal Commission refused to approve the changes sought by the Hearst Corp. and by the county, arguing that they would open the door to commercial exploitation, not only of Hearst property, but much of the rest of the 30-mile coastline that would have been affected by the changes the corporation sought.

The commission said that the Hearst development would violate the state’s Coastal Protection Act by obstructing views, converting agricultural land to commercial use, overtaxing water supplies that wildlife depend on and limiting public access to the coast. The commission recommended scaling the Hearst Corp.’s proposed development down from 650 rooms to 375, eliminating an oceanfront golf course and concentrating all the building in one place--near the base of San Simeon Point.

The county and the Hearst Corp. now have six months to come up with a new plan.

Hailed as a major victory by conservationists and many local residents, the commission’s ruling, said Austin Hearst, will probably heighten the threat of some sort of development.

“I think the corporation is going to have to develop it to whatever degree possible now, just to protect its interests,” he said. “If we don’t take advantage of what we can do, what’s to stop the state from coming back in the future and saying we can’t do anything?”

Worse, he said, the escalation of tensions could prompt the corporation to adopt a far more defensive stance toward the property.

“The byproduct of all this tension is that after years of public access, they could shut it down, put up fences and patrol it.”

Disinheritance Clause

Beyond the immediate issue of the coastal development, those who contest the way family business is done could pay a steep price, as a result of a disinheritance clause written nearly 50 years ago into a will that vested considerable authority over the family fortune in non-family members.

Hearsts are in a minority on the boards of the corporation and the overarching family trust. The family’s authority was limited by William Randolph Hearst’s will, which placed the bulk of his estate in two charitable trusts, controlled by non-family trustees.

Last year, William R. Hearst II went to court to challenge use of the disinheritance clause of the will to prevent family members from, in his words, “legitimate oversight” of their assets.

“I am specifically concerned that the Hearst Corp. is presiding over a dismantling of assets,” William Hearst II said Monday. Referring to a recent move to merge the Hearst Corp.’s broadcasting division with publicly held Argyle Inc. of San Antonio, Hearst said he feared it was part of a reorganization strategy that would weaken the family’s hold over its resources.

“We could end up simply having a portfolio of stocks owned by other people,” Hearst said, adding that under present circumstances the family “lacks any meaningful information regarding the management and operations of the corporation or the family trust.”

“They have had a 42-year run of secrecy over our affairs,” he said.

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The Hearst Family

William Randolph Hearst’s descendants, who are subject to a will that threatens rebellious heirs with disinheritance, are breaking a long silence over the management of their holdings, particularly a proposed commercial development on the 77,000-acre Hearst ranch at San Simeon. William R. Hearst II is considered the leading dissident within the family.

William Randolph Hearst Sr. (1863-1951)

George Randolph Hearst (George Randolph Hearst Jr., Phoebe Hearst)

William Randolph Hearst Jr. (William Randolph Hearst III, Austin Hearst)

John Randolph Hearst Sr. (John Randolph Hearst, Joanne Hearst, William Randolph Hearst II, Deborah Hearst Gay)

Randolph Apperson Hearst (Catherine Hearst, Virginia Hearst, Patricia Hearst, Anne Hearst, Victoria Hearst)

David Whitmire Hearst (Millicent Hearst, David Whitmire Hearst)

Note: Later generation descendants not shown