CAPITAL IDEAS

First came cattle ranchers, then orange growers. Both gave way to railroad barons, followed closely by real estate speculators who brought in home builders, merchants and manufacturers.

Like much of the American West, Orange County followed a familiar pattern of commercial development through the 1800s and the early part of this century. It wasn’t until after World War II that the county began to create its own business identity, leading to what today is a hub of innovation and entrepreneurship anchored in technology, tourism, real estate and water sports.

First, the county drew from Los Angeles’ booming technology and entertainment industries, which were looking for cheaper and better places to expand. Then, home-grown entrepreneurs began to capitalize on the county’s two primary assets: land and water.

Thousands of men and women had a hand in shaping what is today the county’s $100-billion economy. But the roots of the county’s key industries can be traced to four people, innovators whose ideas and deeds transformed the county from its agrarian past to modern-day marvel. If Orange County had a Mount Rushmore, their faces would be on it.

The Inventor

Arnold Beckman was 10 years old when, rummaging through the attic of his boyhood home, he came across a high school chemistry textbook published in 1861. “Steele’s Fourteen Weeks in Chemistry” propelled Beckman’s interest in science and inventing into a lifelong passion.

Beckman was teaching at Pasadena’s California Institute of Technology in the early 1930s when he helped a friend discover a way to measure the acidity of lemon juice. The device used to do that, the pH meter, is today a laboratory staple worldwide. Beckman left CalTech to manufacture pH meters, but he continued to dabble in scientific endeavors. Each success funded more research, which led to new products with far-reaching results. Beckman-designed centrifuges, for example, have been used by no less than seven scientists in work that won them Nobel Prizes.

Beckman, who holds 14 patents, eventually had a hand in several scientific advances: making radar more accurate during World War II, helping prevent blindness in premature babies put in incubators, and determining the causes of air pollution in postwar Los Angeles.

Initially, he agonized about “prostituting” his academic research to join the world of business. But “many say I’ve done more for science in general by making instruments available for thousands to use than what I could do in my own laboratory by myself,” he said in 1997.

He moved Beckman Instruments from Pasadena to Fullerton in 1954, making it the first established technology company to put its headquarters in Orange County. The move laid the foundation for a host of medical-device makers and computer-related high-tech firms that today make up the county’s largest industry.

In 1982, Beckman Instruments was acquired by SmithKline Corp. for $1 billion. The company’s sale gave Beckman hundreds of millions of dollars to fund his true love, education and research. Through the Arnold and Mabel Beckman Foundation (his wife of 64 years died in 1989), Beckman, now 99, has given away more than $300 million to universities and hospitals nationwide. The University of California, Irvine, and CalTech have been major beneficiaries.

Beckman’s accomplishments won him a spot in the National Inventors Hall of Fame and a National Medal of Science from President Bush.

The Showman

On the night of Oct. 27, 1954, ABC-TV broadcast the first “Disneyland” program, promoting a coming attraction that would redefine not only amusement parks but popular culture in America as well.

The project was, of course, the idea of Walter Elias Disney, who by the early 1950s was a successful “manufacturer of fun,” having built a substantial business making cartoons and family-oriented movies. Disney wanted to bring his cartoon characters to life and build a place where families could leave their worldly worries behind for a day--”The Happiest Place on Earth.”

He settled on an orange grove along Harbor Boulevard in Anaheim, and on July 18, 1955, Disneyland opened to the public. Admission: $1 for adults, 50 cents for children, with individual rides 10 to 15 cents each. It was unlike any other amusement park, detailed and immaculate, emphasizing atmosphere and story over raw thrills.

It lured tens of thousands of visitors to Orange County, and with them, hotels, restaurants and competitors. Down the road in Buena Park, farmer Walter Knott had been steadily expanding his roadside berry stand into a theme park tied to the Old West. Walt told Walter there would be plenty of business to go around. And sure enough, there was.

Disneyland became the seed of what today is Orange County’s $4.5-billion tourism industry, and a corporate empire that includes four theme parks and two cruise ships in Florida, parks near Tokyo and Paris, a planned Hong Kong park, dozens of hotels, family and sports entertainment centers and time-share condos.

Thirty-three years after Disney’s death, Disneyland--and Anaheim--are still growing. A $1.4-billion expansion of Disneyland includes a new park and an entertainment mall that will open in 2001. Anaheim is spending $500 million to upgrade roads, utilities and its convention center, and proposals for competing entertainment zones and hotels abound.

The Surfer

In early 1958, a plastics salesman from Azusa wandered into 24-year-old Hobie Alter’s Dana Point surf shop and asked him what, if anything, he could do with the durable-but-lightweight stuff. Alter and his lone employee, Gordon Clark, poured hot resin over a hunk of plastic. When it didn’t melt, the duo found themselves the creators of the first process to mass-produce surfboards, which theretofore had been carved out of balsa wood.

That remains the single biggest innovation in the history of surfing. “Hobie was the person to succeed at it, and caused the industry to--en masse--swing to that production method,” said Steve Pezman, publisher of Surfer’s Journal. “The sport couldn’t have thrived and grown without it.”

The timing couldn’t have been better. The discovery gave surfing the means to grow from a quirky regional pursuit into a sport available to the masses, and its popularity quickly soared. Thanks to a series of surf movies, led by 1959’s “Gidget,” and the music of the Beach Boys in the early 1960s, surfing became emblematic of the Southern California lifestyle.

Real surfers hated the shticky Hollywood image of blond, tan, girl-crazy wave riders, but youngsters throughout the world couldn’t get enough of them. Over the next two decades, a host of entrepreneurs such as publisher John Severson, apparel makers Walter and Phillip Hoffman, and filmmaker Bruce Browne helped transform surfing into a multibillion-dollar lifestyle industry. Their work allowed a new generation of athlete entrepreneurs--including Jake Burton and Tony Hawk--to take board-riding far beyond the beach in the 1990s, and snowboarding and skateboarding became big industries of their own.

Alter followed up his pioneering work using hot gooey mixtures 10 years later by developing a fiberglass catamaran sailboat, known as the Hobie Cat. He went on to build a small empire around water sports that included boat design, sunglasses and a chain of retail stores. He sold his boat-making company to camping-equipment giant Coleman Co. in 1986.

Alter, now 65, left Orange County in 1989, and today splits his time between McCall, Idaho, and the San Juan Islands in Washington.

The Builder

Five years after the opening of Disneyland, a 32-year-old Bay Area architect who specialized in designing schools, churches and other public buildings landed a job as the first planner of the Irvine Co., a giant farming operation that was about to become one of the nation’s largest land developers.

It was Ray Watson’s job to translate Los Angeles architect Joseph Pereira’s broad vision for a new town--Irvine--to be built around a new university. “It was an incredible opportunity, to create a new town, on one big plot of land, under the control of a single owner,” Watson said in an interview earlier this month.

Under Watson, the Irvine Co. was at the forefront of redefining urban planning, creating a community that had a balance of jobs, housing, shopping, and educational and recreational opportunities. Watson not only believed in the concept, he lived it, moving into the company’s first neighborhood--East Bluff in Newport Beach--where he still lives today.

Maybe more importantly, Watson’s tenure saw the birth of a new generation of planners and land-use experts, who went on to ply their trades at a host of new and big communities such as Coto de Caza and Rancho Santa Margarita. “His disciples are having an influence all over the U.S.,” said Ken Agid, an Irvine Co. planner in the 1970s who’s now working on the giant Playa Vista project in Los Angeles County.

Also, as acting chairman of the Walt Disney Co. in the early 1980s, Watson hired two guys--Michael Eisner and Frank Wells--to boost the then-sagging fortunes of the mid-sized entertainment company.

Nowadays, the 73-year-old Watson is vice chairman of the Irvine Co., acting primarily as an advisor to Chairman Donald Bren and as the spiritual keeper of the flame for the company’s planners. “I go in, I pontificate, I leave,” he says with a grin.

Times Staff Writer E. Scott Reckard contributed to this report.

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PEOPLE AND INNOVATIONS

James Irvine was a poor 19-year-old Irish immigrant when he arrived in the United States in 1846 in search of prosperity in a new land. He would end up selling mining supplies instead of panning for gold, but he became a successful San Francisco merchant, and started plowing his profits into real estate. In 1864, he and three partners paid $25,000 for 110,000 acres in what would become Orange County. Irvine and his partners started a sheep ranch and not long thereafter, wool prices soared. Irvine bought out his partners in 1876, and consolidated the former Spanish land grants into a spread that to this day remains one of the largest in the United States under private ownership.

C.J. Segerstrom began as a dairy farmer and later planted hundreds of acres of bean fields in and around Costa Mesa. His son, Henry Segerstrom, and his family began converting those holdings into commercial properties in the 1960s. Their South Coast Plaza became one of the world’s preeminent shopping centers. The Segerstroms used their land holdings and considerable wealth to lead the effort to establish the Orange County Center for the Performing Arts.

Using his new Plymouth as collateral, Carl Karcher borrowed $311 in 1941 to buy a hot-dog cart. Over the next 50 years, he grew the enterprise into the 660-unit Carl’s Jr. hamburger chain and helped shape the modern fast-food industry. The gregarious Karcher used his fortune to advance Republican and Catholic causes, but lost most of his wealth in a series of bad real estate investments in the 1990s.

Katsumasa “Roy” Sakioka came to the United States an impoverished immigrant from Japan and died as one of the nation’s richest men. In between, he built an agricultural and real estate empire in spite of a host of obstacles. As a Japanese national, Sakioka was sent to an internment camp during World War II. Later, because Japanese were not allowed to become citizens, and noncitizens couldn’t purchase land, he was forced to buy farmland in the names of his American-born children. In 1991, Forbes magazine estimated his net worth at $325 million. He died in 1995 at age 96.

Arguably the most powerful individual in Orange County, home-builder Donald L. Bren paid $518 million to buy out his partners in the giant Irvine Co. in 1983. As the county’s largest landowner (the 54,000-acre Irvine ranch covers one-sixth of the county, and is four times larger than Manhattan), Bren has shaped the region’s well-manicured landscape--and its image--for the past 17 years. With the help of real estate booms in the late 1980s and 1990s, Bren’s wealth has grown dramatically. Forbes magazine this year estimated his net worth at $3.2 billion. Bren has given tens of his millions to UCI and made sizable contributions to a host of other universities and land-preservation causes.

Together, John Lusk and William Lyon seemingly built half of Southern California. Lusk, a former banker, built more than 40,000 homes and scores of shopping centers, office buildings and industrial parks. Lyon, a crusty former Air Force pilot, built more than 70,000 homes and apartments from California to Florida. The empires of both men, estimated at their peak at $500 million and $350 million, respectively, came under intense pressure when the region’s real estate market collapsed in the early 1990s. Lusk, who died in March at 91, simply handed over his business to a partner; Lyon endured a lengthy and humbling restructuring but survived financially without filing for bankruptcy.

Wet Seal Inc. was a growing but still-regional seller of young women’s apparel whose profits were in a tailspin when Kathy Bronstein climbed into the CEO’s chair in 1992. Three years later, she pulled off what may be the sweetest deal in Orange County business history, paying a paltry $4,200 per store for the moribund 239-unit Contempo Casuals chain. The acquisition tripled Wet Seal’s store count and propelled it overnight into a national fashion powerhouse.

One of the most enduring names in fashion and best-known companies based in Orange County is St. John Knits Inc. in Irvine, run by the Gray family. Marie designs the clothes, Bob runs the business side and their daughter Kelly helps design and models the collection of upscale women’s apparel. Following a series of setbacks last year, the Grays took St. John private earlier this year, hoping to recapture some of the lost magic.

The best place to work in Orange County--and anywhere else, for that matter--is computer memory maker Kingston Technology in Fountain Valley. Founders David Sun and John Tu redefined the notion of what it means to be a good boss. In 1996, they sold their company for $1.5 billion and set aside $100 million to share with workers. That’s one of a host of unconventional management strategies the duo employs in running their privately held company. Nowadays, they’re funding their employees’ new ventures, even if it means losing the workers.

An engineering professor and one of his top students built what has become the most formidable enterprise Orange County has seen. So far. Henry Samueli Jr. (the professor) and Henry T. Nicholas III (the student) run Irvine-based Broadcom Corp., whose chips are helping make the convergence of technology and entertainment a reality. As luck would have it, Broadcom’s 1998 stock market debt coincided with an insatiable investor demand for technology companies. As a result, the Henrys, as they are known, make one of the hottest tickets on Wall Street. The company’s stock has soared 345% this year alone, making the duo worth $5 billion each.

TIMELINE

1876--James Irvine buys out his partners in 100,000-acre ranch.

1880--Richard Gilman plants first commercial orange grove, in Fullerton.

1890--Oil discovered in Brea, setting off a boom in drilling.

1909--Glenn Martin builds the first airplane in the county, in an old church in Santa Ana. Three years later, he makes the world’s first flight over water, from Newport Beach to Catalina Island.

1919--Oil is discovered on land owned by Chapman University founder Charles C. Chapman just northeast of Placentia. It starts the county’s second oil boom, soon dominated by the Standard Oil Co.

1925--Developer Ole Hanson begins to sell lots in what is now San Clemente, a benchmark of the county’s building boom of the Roaring Twenties.

1948--The numbers of acres planted with orange trees peaks, at 65,472. By the end of the century, the number dwindles to 200.

1951--Northrop Corp. levels an Anaheim orange grove to build a factory, bringing Los Angeles’ booming aerospace industry--and the first of tens of thousands of high-paying jobs--to Orange County.

1954--Beckman Instruments moves its Pasadena headquarters to Fullerton, becoming the first technology-oriented company to call Orange County home.

1955--Disneyland opens a new amusement park on Harbor Boulevard in Anaheim. The company bought 160 acres, but Walt Disney tells one of his staff, “We’re going to kick ourselves for not buying everything within a 10-mile radius of this place.”

1958--Hobie Alter and Gordon Clark come up with a process to mass-produce surfboards.

1967--A modest new shopping center, South Coast Plaza, opens in Costa Mesa. A steady but dramatic addition of high-brow stores during the 1980s transform it into the highest-grossing malls in the West, and one of the world’s preeminent shopping destinations.

1976--Engineering giant Fluor Corp. moves its headquarters from Los Angeles to Irvine, giving Orange County its first Fortune 500 company.

1983--Home builder Donald L. Bren, who will become the county’s first multibillionaire, buys controlling interest in the Irvine Co.

1984--The Irvine Spectrum business park opens, and by late 1990s becomes home of the largest concentration of technology companies in the Southland.

1989--Federal regulators seize Lincoln Savings & Loan, and Charles H. Keating Jr. becomes the poster boy of the 1980s S&L; debacle.

1993--In the throes of the biggest economic downturn since the end of World War II, Orange County’s unemployment rate hits 7.9%, the highest level on record.

1998--Shares of Irvine’s Broadcom Corp. triple in first-day trading and continue to soar, making founders Henry T. Nicholas and Henry Samueli Orange County’s second and third multibillionaires.

1998--In a nod to California’s creative culture, Ford Motor Co. moves its Lincoln-Mercury division headquarters to Irvine. It’s the first division of a Big Three auto maker to set up shop outside of Michigan.

1999--Financial services giant Avco Financial is sold for $3.9 billion, the highest price ever paid for a company based in Orange County.

1999--In the midst of the biggest economic expansion since the end of World War II, Orange County’s unemployment rate plunges to 2.3%, the lowest on record.

1999--A booming job market and dearth of housing construction push Orange County’s median home price to $247,000 in November, the highest on record.