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Family affair

Henry Segerstrom keeps the legacy alive and well at South Coast Plaza

By Debra Hazel

The greatest satisfaction is the people’s response to what South Coast Plaza is and does. People love to come here.” — Henry Segerstrom - managing partner, C.J. Segerstrom & Sons

Long one of the most private shopping center developers, Henry Segerstrom, 78-year-old managing partner of C.J. Segerstrom & Sons, has built one of the highest-profile and highest-end projects in the United States, South Coast Plaza in Costa Mesa, Calif. It is expected to generate $1 billion in sales this year. In the latest phase of this 2.7 million-square-foot project, a third-level pedestrian bridge now links one of the toniest high-fashion centers in the world with a smaller, more home-oriented mall across the street (SCT, September 2000). Future plans for the 33-year-old complex include the development of an arts complex on the same property. In a rare interview with the press, Segerstrom spoke to SCT Editor-at-Large Debra Hazel a few hours before the Sept. 28 grand opening.

It was your grandfather who started assembling the land that became South Coast Plaza in 1967?

He was the one who brought the clan to California in 1898. He had 10 children at that time. In 1900 he moved into the Costa Mesa area, and his last, 11th child was born here. My father’s name was Anton, the same as my son.

Was it your father who started the construction of the center?

No. My father passed away by the time we started construction, but he was alive when we first began our negotiations with May Co. and Sears.

And now your children are involved. Are there other generations involved also?
No, just my children.

Most developers during that time period didn’t just focus on one property: The Simons, DeBartolos, Taubmans all built many centers. Why did you choose just to focus on South Coast Plaza in terms of retail development?

There are probably two major reasons for that: One is that we didn’t acquire the site of South Coast Plaza specifically as a result of market surveys. We owned the land, so our challenge was different from conventional builders in that we had to convince retailers that this was a good market. We had to bring people here.

Secondly, I doubt if there’s another area in the United States that has witnessed both the population and economic growth that we’ve seen here in Orange County, and about 15 years ago we decided we wanted to serve the growing upscale market in Southern California, which was mainly being served by Beverly Hills. The population base was so large that it was evident that Beverly Hills doesn’t appeal to everyone in the marketplace, so it was an opportunity to distance ourselves from Beverly Hills and still establish a major center of high-quality and upscale retailing in Southern California.

So we elected to move out of the competitive arena that other centers were developing, the same tenant mix. Our objective was to go upscale, and we’ve been on that course now for about 15 years. It’s been a very successful program: I doubt if we would have had the opportunity to do this in any other region of the country. So we had two motivations: One, we had the land; second, this is probably the finest marketplace in America to grow an upscale retail center.

Was it difficult to convince high-end designers to come to this marketplace then?

I would say the first retailer that we brought here who made a major decision that Southern California was big enough for two stores was Tiffany. And when Tiffany elected to open its second store in Southern California at South Coast Plaza, the retail market stopped and considered. We of course introduced a number of upscale tenants about that time. I personally opened the Courreges boutique, and that was later followed by the Yves St. Laurent boutique. We had one of the few Halston stores in the country at the time; we had Mark Cross come here. Some of them — Mark Cross and Halston — don’t exist any more, and Courreges is pretty much out of the marketplace, but at the time they were fashion stores that were much admired. So South Coast Plaza built its reputation based upon the achievement of bringing retailers such as that to this marketplace.

Yet you also combine that with big boxes such as Borders and Crate & Barrel to make this an all-inclusive destination.

I don’t call those big boxes; I call them flagship stores. They open stores across the country, but in the case of Crate & Barrel, they’ve put their West Coast flagship store here, as is Pottery Barn putting its Orange County flagship store here. On the east side, the original side [of the complex], Louis Vuitton is putting in a global store; that’s a different category even than a flagship. So major retailers are now casting their votes to build their finest and largest stores in South Coast Plaza. Even Federated: Their [189,000-square-foot] home furnishings store [under the Macy’s banner] is a very large store for them.

Is this getting closer to your vision for South Coast Plaza?

It’s hard to say what one envisions because your world changes around you, and you have to be cognizant of how that world is changing. I would say Orange County has become a very powerful economic area in this country. The gross domestic product of Orange County would rank it with many second-tier countries in the world, a country like Greece. You have a single county in the United States that has prospered well. Forbes recently listed their top 400 individuals in the country, and we now have five or six billionaires in the county. So the community is changing. The wealthiest people in the county now are in high technology; it used to be real estate. So the community changes, and we try to see what is new in the world of retailing, and if it seems appropriate to this marketplace, we like to bring it over.

You’ve also worked hard and been very generous in bringing the arts to this area. Will this be more of your focus now that the retail is finished?

I don’t think the retail is ever finished. But to answer your question about my focus, I’ve made a personal individual commitment from my own resources of $40 million to the development of a new concert hall. The estimated cost of that concert hall is $200 million. It will consist of a 2,000-seat concert hall and 500-seat music theater. And yes, I will be devoting a great deal of time to that effort probably in the next year or two.

Why the arts vs. other causes?

I support education, my own school, and as a family we support medical [causes], but I think it is a unique area of social need, a human need. We didn’t have the physical resources in Orange County, and I considered it an opportunity to fill a gap. As the community and our mix of job opportunities and occupations change more and more, we find that whether it’s a leading scientist who’s being solicited to join the faculty of UC Irvine, or a scientist looking to join a dotcom, it almost inevitably comes down to [that] those people want to know what cultural facilities you have in this community. Cultural facilities also offer tremendous educational opportunities for children which have not been available in this community before — hundreds of thousands of schoolchildren are brought to the Orange County Performing Arts center [on South Coast Plaza property] for performances, and I think that’s a wonderful learning experience for the children.

Why not take time off to enjoy yourself?

I try to treat myself well and give myself time, but there are things I feel I can accomplish and contribute. One works all of one’s life to get to a point of being able to do what you want to do in your career. It’s difficult to say, ‘Don’t finish the thing you like to do.’ This bridge is something that has been a purpose and a goal of mine for more than a decade, and it took a great deal of study: We looked at different systems and designs, and I think that time was beneficial, because the result is far superior to anything we considered before.

Is that what gives you the greatest satisfaction, the building?

It all does. I think the greatest satisfaction is the people’s response to what South Coast Plaza is and does. People love to come here. People come from all over the world to shop South Coast Plaza, and I think its uniqueness is a great reward for human effort.

Is it all still fun for you?

Uh-huh.