| Welcome to Bw Reads, our weekend newsletter featuring one great magazine story from Bloomberg Businessweek. Today Michael Waters and John Gittelsohn take us to Irvine, California, where a secretive developer controls most of the city. You can find the whole story online here. If you like what you see, tell your friends! Sign up here. In the summer of 2010, Jennifer Henry moved to Irvine, California, from St. Paul, Minnesota, to attend her first year of law school. She didn't know much about Irvine, except that it had a bit of a Disneyland vibe: Everything felt new and precisely organized, and residents seemed to be brimming with the slightly peculiar hope that, in Irvine, life would be better. Just before the school year began, Henry and two fellow students decided to look for an apartment together. During their search, she kept seeing the same name on all the rentals. "Every single apartment available was from the Irvine Co.," she says. "They were the only game in town." Henry did consider another apartment in the neighboring city of Costa Mesa, just outside the city limits of Irvine. But in the end, she and her classmates gave in to the inevitable. They landed at Villa Siena, a well-manicured apartment complex complete with a pool, basketball and tennis courts, and a spa—owned, of course, by Irvine Co. It certainly wasn't a bad place to be. But she was fascinated enough that she wrote a law paper about the company's curious influence on the city. Henry left Irvine in 2013 and now lives in Palm Springs. All these years later, the experience has stayed with her. In what other American city did a single landlord have such a hold over the real estate? Not much is different today. For locals it's an open secret. Ashley Bennett, a nurse who grew up in nearby Corona, moved to Irvine a few years ago and ended up calling the Irvine Co. leasing office directly. "We knew right off the bat that it was going to be the Irvine Co.," Bennett says. "I mean, unless you are renting someone's condo or home in Irvine, I don't know that there's any other options." Almost half the residents of Irvine, just a short drive from Orange County's sun-soaked beaches, are homeowners who live in sprawling subdivisions with multimillion-dollar single-family houses. But if you're renting anything in the city, it's another story. Irvine Co. owns about 75% of the apartment units in the City of Irvine, according to data provided by the property management software company RealPage Inc. (Irvine Co. says it's closer to half of all apartments.) It also owns almost every shopping center in Irvine, as well as many of the city's office spaces. It owns a golf club and a solar panel installation business. Even the Irvine Standard, a community newspaper delivered to residents, is owned by Irvine Co.  At the helm of Irvine Co. is Donald Bren, the wealthiest real estate developer in America, with about $17.4 billion to his name, according to the Bloomberg Billionaires Index. He operates the core of his empire like a one-man homeowners association (HOA). Under his leadership, Irvine Co. sets strict home design standards, requiring windows on all four sides of single-family houses, roofs with ceramic shingles or terra cotta tiles, as well as specific floor area ratios allowing space for yards. Each village gets a plant palette, dictating which types of trees, shrubs and grasses are allowed, and Bren has been known to drive around town and direct his staff to redo aesthetic choices he doesn't like. Many of the city's hallmarks—such as its red-tile-roofed Mediterranean houses—came straight from Bren's affection for Italian Palladian architecture, influencing everything including the city's schools and its fire stations. Bren declined to speak to Bloomberg Businessweek, but Irvine Co. spokesperson Ryan Lilyengren said in an email that the company's decades-long master planning and partnership with the city has provided "an unmatched quality of life to Irvine residents" and that the city "continues to be a model new community." As chairman, Bren remains the ultimate decision-maker at Irvine Co. He's tan, athletic, "forceful and confident," says James Doti, the former president of Chapman University, a private liberal arts school in the city of Orange. "He speaks. You listen." Bren comes into the office every day, where he works on the ninth floor, at a desk overlooking the Fashion Island shopping center (which he owns) and, farther in the distance, the exclusive Harbor Island (an artificial island where he has a mansion). He's been known to sign off on construction documents and profit and loss statements by hand. It's the kind of top-down control one might expect from a billionaire-run planned utopia, such as former Victoria's Secret & Co. Chief Executive Officer Les Wexner's model heartland town in Ohio or Oracle Corp. Chairman Larry Ellison's privately owned Hawaiian island. But those other master-planned communities are dwarfed by Irvine's size, longevity and diversity. Irvine has attracted a mix of academics, immigrants and entrepreneurs, fueling "the hottest housing market" in the nation, as the Los Angeles Times proclaimed last August, and making it one of America's most enviable urban-planning experiments. (In the wake of the Los Angeles fires, its meticulous fire emergency planning has also been heralded as a model for other cities.) Sixty years after Irvine Co. transformed its historic ownership of a sprawling plot of farmland, Irvine has become a thriving city of more than 300,000 residents and about 450,000 jobs. It's home to major tech companies, including game maker Blizzard Entertainment Inc. and electric-vehicle upstart Rivian Automotive Inc., and the prestigious University of California at Irvine, famous for its breakthroughs in chemistry, climate research and computer science (in the Donald Bren School of Information and Computer Sciences). High-earning tech workers and executives have flocked there for its good schools, low crime rates and racial diversity. Noodle shops and Middle Eastern grocery stores dot the city's strip malls. It's Los Angeles, but without all the fuss. Bren is now 92 and has no announced successor. Few know what will happen when the person who planned Irvine down to all those fine details is gone. But one thing they can expect is that the one-man HOA has not left the future of his city to chance. Keep reading: The Secretive Billionaire Behind America's Most Corporate City |
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