From the Los Angeles Times, May 10, 1998
Not for reprinting without permission of the Times

The Leader of the Pack in El Toro Dogfight

Profile: George Argyros marshals his forces to build an airport--and a legacy.
By JAMES S. GRANELLI, Times Staff Writer

George Argyros is a man who can't sit still. He often carries two briefcases when he boards his private jet. His 100-foot yacht, the Huntress, is equipped with satellite communications, mainly for telephones and fax machines.

Even on a pleasure cruise in the Mediterranean, "he's always looking to soak up something other than sun--he soaks up information," says James L. Doti, president of Chapman University in Orange where Argyros is chairman of the board of trustees.

Lately, Argyros, has been soaking up a lot of controversy. After having made a fortune in real estate and reinvesting it in an array of companies, he is battling for control of troubled Costa Mesa-based Apria Healthcare Group Inc., of which he is a major stockholder. But the more public and contentious battle is the one for development of an international airport at the El Toro Marine Corps Air Station.

If El Toro is a war, Argyros is the general. He has poured nearly $2 million of his own money into voter initiatives that led to the current plans. Foes have speculated that he would profit from the project, but he has repeatedly denied that and no one has been able to prove otherwise.

Instead, his payoff would come in the form of a legacy--as the man who helped turn Orange County into a world-class trading center. "I don't want the county to give away its opportunity here for the future of this community over the next 100 to 200 years," Argyros says. "I think we need to be very forward-thinking."

If Argyros succeeds, he would create a lasting imprint befitting the likes of multibillionaire developer Donald L. Bren and mall magnate Henry T. Segerstrom, both of whom elevated the county's stature as they fostered its development. Bren's Irvine Co. is the county's biggest property holder and landlord. It commands about 30% of the county's new-housing market and has built one of the nation's premier business parks in the Irvine Spectrum. Segerstrom, who transformed some of his family's bean fields into the internationally known shopping mecca in Costa Mesa that is South Coast Plaza, has put his stamp on the community with his substantial support of the Orange County Performing Arts center and other cultural projects.

Argyros has worked in the same big leagues, but for all his civic and charitable efforts, he hasn't made a comparable public impact.

But the issue he is championing is fraught with danger. While both Bren and Segerstrom have studiously avoided controversy, the 61-year-old Argyros has become the lightning rod for those opposed to the airport.

"He thinks he can muscle his way around because he's been a chief executive officer at a big company," says Irvine Mayor Christina L. Shea, who nevertheless admires Argyros for his successes. Mission Viejo Mayor Susan Withrow, who tangled with him in a televised airport debate, is even more pointed. She calls him "a big bully."

Loudest Voice in El Toro Debate

Few issues in Orange County have so torn the community as the plans for an airport at the El Toro base, which the Marines will turn over to the county next year. And no one has drawn as much anger in the emotional five-year-long debate as Argyros. Reviled by opponents for his overly aggressive manner and his penchant for taking over meetings, Argyros makes no apologies. "It's just too important an issue not to try to do the right thing," he said.

Airport foes figure Argyros has an ulterior motive for pumping his own money into two voter initiatives that have led to current airport plans. Some figure he'll capitalize by building industrial or office space nearby. Others even think he owns stock in overnight mail carrier Federal Express Corp., which could be a major user of the airport. "They've checked the records, pal, and there's nothing," Argyros says, laughing at the rumors. "Look, we'll benefit the same way everyone else will in Orange County. I don't own any land there. I'm not developing there."

But Argyros and many fellow Newport Beach residents would lead quieter and cleaner lives if an El Toro airport meant that John Wayne Airport would turn into a general-aviation facility. Commercial jets departing John Wayne fly over some of the most exclusive enclaves in the county, including Argyros' home, spewing exhaust particles on houses and lawn furniture below.

Argyros has said previously that he's pushing the El Toro project "for my children and my children's children," a reference to the need to ensure that the county's economy will continue to grow. He also believes it is part of his way--his duty--to give something back to the community for the riches it has bestowed on him. Some friends are upset with claims that Argyros wouldn't get involved with such projects unless he eventually profits from them. "I'm astonished that the public gives people like George so little credit for doing things because they're the right things to do," says John H. Taylor, executive director of the Richard Nixon Library & Birthplace Foundation, which Argyros chairs.

With no other ulterior motives evident, some anti-airport activists like Laguna Niguel Councilwoman Patricia C. Bates believe Argyros when he says that Orange County's future depends on having an international airport so it won't become a slave to Los Angeles and San Diego metropolitan areas. Bates is upset, though, that Argyros and his supporters have so little regard for a deliberate decision-making process. "This thing has been rammed down the throats of South County," she says.

Putting His Money Where His Mouth Is

There's no question that Argyros has worked hard over the years to help push the airport proposal through.

He bankrolled Measure A, the 1994 voter initiative that approved a commercial airport as the preferred plan for El Toro, and the 1995 campaign to defeat Measure S, essentially a referendum on the issue. He spent about $1.8 million altogether.

He supports county supervisors, particularly Jim Silva, who share his vision and vote for an airport.

He won appointment to the El Toro Citizens Advisory Commission, created by Measure A to advise the supervisors on the best use of the military site. Some contend he is the de facto chairman, taking over meetings and making sure his agenda is followed. He has debated the advantages of an airport at town hall meetings, small gatherings and on television. His position even alienated his longtime friend and former business partner, developer William Lyon, an estrangement that demonstrates how divided the county is over the airport issue.

Argyros certainly has angered some South County airport foes with the intensity of his debate. Withrow, for instance, was startled in meeting him before their televised debate on KOCE-TV several years ago. "Argyros walked in and the first thing out of his mouth was, 'You should know that you'll be receiving a letter from my attorney that if you attack me personally, I'll sue you,' " said Withrow, a leading airport foe. "I felt that was an act of intimidation."

The heated debate during the taping lasted for at least 15 minutes more after the show, ending with a flushed Argyros and an aggravated Withrow trading crude epitaphs, she and others said. Argyros denies ever threatening anyone with a lawsuit in such a manner. He said he recalls little of the incident but remembers a woman saying "totally untrue and personal things" that got him upset. "I remember this lady was really rude," he said. "And there was some give and take. It wasn't very meaningful to me. I mean, once the thing's over, it was over. I didn't need that."

Self-Made Man Never Stops Building

A stocky, effervescent man with an alert and inquisitive mind, Argyros has strongly held beliefs and acts with the passion and the certainty of purpose that often comes from building a successful business from nothing.

Born in Detroit, the grandson of Greek immigrants, Argyros was 10 when his parents moved the family to Pasadena. At 14, he went to work as a box boy at a grocery store, and never stopped working. An average student in high school and at Chapman College in Orange, he sometimes fell asleep in class because of his long work hours. He slept so soundly in one early morning philosophy class that fellow students carried him, desk and all, into the hallway outside the classroom while he continued to sleep.

Argyros said he did well in business classes, though.

After graduating and marrying his college sweetheart, Judie Henderson, he decided to look for a job in which he could be his own boss. He obtained licenses in securities, insurance and real estate, and quickly ditched the first two to settle on real estate because it gave him the best opportunity to control his own destiny.

He spent a brief time as a broker selling land to developers and helping put together commercial deals for others, but he decided to become a developer himself to acquire what he once called "real serious money." In 1963, he built his first major project--a strip shopping center in Tustin noteworthy only for having the first Spanish-style Orange Julius.

Detecting a need for apartments, he soon began developing and acquiring complexes. Through personal holdings and his Arnel Development Co., Argyros has become one of the region's larger landlords with 5,200 units in 19 apartment buildings, most of them in Orange County. His apartments alone are worth more than $500 million, industry experts say, and he has more valuable real estate in numerous business complexes, such as the Metro Pointe commercial, office and condominium project adjacent to South Coast Plaza. Argyros would not provide details about those projects, which he has built throughout California and which provide more than 1 million square feet of space.

"I have been focused always, from a business philosophy standpoint, on cash flow and building for the long-term," Argyros said. He is known for the meticulous maintenance and the efficient management of his buildings, ensuring the cash flow they produce. "That serves as the foundation of his wealth. He takes care of that," said real estate consultant Kenneth Agid of the Marketing Department in Irvine. "Everything else flows from that."

Argyros accumulated his fortune--estimated by Forbes magazine in 1991 to be $265 million--in a quiet manner and independently from the developer community, Agid said. "He was very nose-to-the-grindstone," the consultant said.

Trying the Airline and Baseball Games

Ever the astute businessman, Argyros was careful not to put all his eggs in one basket. Besides, he said, "My intellectual interests were broader than real estate." His purchase of the lackluster Seattle Mariners major league baseball team for $13.1 million in 1981 and his acquisition, with developer Lyon, of AirCal a few months later for $61.5 million put him in the public spotlight for the first time.

Baseball free agency and an air traffic controllers strike left the companies in shambles. He and Lyon concentrated first on turning around AirCal. Meantime, the Mariners, saddled with a bad lease and rising salaries, cost him $37 million in the first three years under Argyros' ownership.

He had to make tough cost-cutting decisions in Seattle, including trades of better and higher-paid ballplayers. Some managers also didn't appreciate his meddling in on-field matters. The result: Seattle came to revile the intruder from Southern California. Argyros said he is unfazed by the experience. He figures he saved baseball for Seattle--and some there agree. The easier way out, he said, would have been to move the team elsewhere. As it is, no Mariner owner has turned a profit since 1989, when Argyros made $2 million in his last year at the helm.

He said he was determined to make both the team and the airline profitable, and he was rewarded for his work. The 1987 sale of AirCal to American Airlines for $225 million and the 1989 sale of the Mariners to Indianapolis businessman Jeff Smulyan for $76.1 million gave Argyros a combined gain of $40 million after covering all expenses and losses.

The decision to sell AirCal was easy. Argyros didn't want to give up the Mariners, but the team had taken a toll on his marriage, leading to a brief split with Judie in 1985. His resolve to turn both companies around is part of his makeup--what friends call his fierce competitiveness. "George does everything intensely and competitively," Agid said. "He plays golf with an abacus. He likes to have something on the line, whether big or small. He needs to be competing, and he takes the challenge of competition very seriously.

Another friend sums up Argyros this way: "If George bought a stock at $5 a share and it went to $80, and then fell back to $60, he'd complain that he lost $20 a share."

Health-Care Venture Prognosis Uncertain

In 1987, Argyros and venture capitalist Charles Martin formed Westar Capital, mainly as an Argyros family investment vehicle. They set up Westar to buy major stakes in established but growing companies that had proven management.

Its first effort was to put what Argyros called "several million dollars" into a small home health-care company called Homedco Group Inc. in Fountain Valley. Westar originally held 23% of the stock, but that was reduced as the company offered new stock to acquire other firms.

In 1995, Homedco merged with Abbey Healthcare Group Inc. in Costa Mesa to form Apria, the nation's largest home health-care firm, in what was touted as a "merger of equals." Argyros, who wasn't a director but was represented on the board by Martin, said he wasn't sure it would work. It didn't.

In the past two years, the company's value has plummeted 75%, giving Argyros a paper loss of $70 million. Apria has had difficulties trying to straighten out snafus and a convoluted organizational structure created in the merger. By the end of last month, Argyros had decided that pending offers to provide financial help or a buyer for Apria weren't very good. He announced that he was thinking of putting a group together to take control.

Some of the directors grumbled, and one of his allies on the board suggested April 29 that he step down as chairman, which he did. Argyros remains on the board, though, as he plots his next move. Whether Apria becomes his greatest embarrassment remains to be seen.

"I'm a believer in the long term with Apria," he said. "It wasn't a healthy merger and it didn't work out well, and we're a company primarily trying to clean that up. But I think the company has really turned the corner, so I'm pleased about it."

A Prodigious Fund-Raiser and Giver

The one-time grocery store bag-boy built a real estate fortune in the 1970s and '80s and invested in a number of companies that make everything from satellite solar power systems to doghouses.

His interests have ranged from local, state and national politics to world affairs, the latter sparked by his friend and hero, the late President Richard M. Nixon. His wealth has been generously shared with educational and charitable causes. And so has his time. He has been chairman of Chapman's board of trustees for the last 22 years and has given it about $10 million over time.

He also has long contributed to political campaigns, jumping into the national scene early as the local finance co-chairman of Nixon's 1972 reelection. He has been the finance chairman for Gov. Pete Wilson and played major roles in other GOP state and national campaigns, including former Sen. Bob Dole's 1996 bid for the presidency.

Argyros is chairman of Team California, the party's special fund-raising group that tries to tap into the state's high-rollers. He also is a major force beyond Orange County, active in state and national political circles and in international policy affairs. Argyros helped create the Nixon Center, a Washington international think tank and part of the Richard Nixon Library & Birthplace Foundation in Yorba Linda, and he is chairman of the foundation.

But even at that level, his style is vintage Argyros. At a 1996 conference in Italy, for instance, he was worried about what meager role he could play in discussions with members of the German Parliament, said Dimitri Simes, president of the Nixon Center think tank. "The next thing we know," Simes said, "he not only opens the meeting but delivers a speech and takes charge."