Read Online Threshold Resistance by A. Alfred Taubman - Free Book Online Page B

San Diego on a high-wheeled bicycle to see his father’s holdings.) J.I. shifted the business focus of the ranch from sheep and cattle raising to agriculture, making land available for tenant farming (mostly hay and grain). In 1894, he incorporated his holdings as the Irvine Company under the laws of West Virginia, one of only a few states that allowed corporations at the time.
    When sophisticated irrigation systems were developed throughout the first decades of the new century, J.I. turned his attention to the very profitable citrus industry. The same speedy, dependable rail lines delivering settlers to Southern California made it possible to ship fresh produce affordably across the continent. The land was soon covered with walnut, orange, and lemon trees, with vegetable fields, and irrigation systems.
    Under the direction of J.I.’s son, James Irvine III, the ranch became one of the largest landholdings under cultivation in the United States, boasting the finest asparagus crop and Valencia orange groves in the world.
    For estate planning purposes and to fund educational and charitable projects in Orange County and San Francisco, J.I. in 1937 established the James Irvine Foundation, which held his controlling interest in the Irvine Company. Upon his death, in 1947 (he apparently drowned while fishing in a stream on a Montana cattle ranch owned by the Irvine Company), his stock passed to the foundation as trustee on behalf of the people of California. J.I.’s only living son, Myford Irvine, served as president of the Irvine Company until his mysterious death in 1959. Apparently, Myford was not very wellliked. He was found dead in the basement of his home with multiple gunshot wounds (two in the stomach from a 16-gauge shotgun and one in the head from a .22-caliber revolver). The official cause of death was determined to be “suicide.”
    Throughout the decade that followed, Joan Irvine Smith, J.I.’s granddaughter, acted as a much-needed watchdog for the family, as foundation trustees sought to benefit personally from the rich resources of the ranch. Joan also pushed for innovative land-use planning and donated 1,000 acres for the development of the University of California, Irvine, campus. Thanks in large measure to Joan’s personal lobbying, federal and state laws were amended in 1969 to limit the percentage of ownership a foundation may hold in a corporation to just 20 percent. The new regulations gave foundations twenty years to meet this restriction. But rather than sell off portions of their stock over time, the trustees of the James Irvine Foundation pursued a sale of all their holdings in the ranch. Trustee Simon Fluor—whose company had an active relationship with Mobil Oil—brokered a sale of the foundation’s controlling interest in the ranch to Mobil. When she learned of the pending transaction by accident, Joan Irvine Smith in December 1974 filed suit in California to stop the deal. The California state attorney general, agreeing that the offer was too low and the sale procedure was flawed, joined Mrs. Smith in her action. Intense legal wrangling ensued for the next two years.
    In August 1976, I got the fateful call from my partner Charles Allen Jr.
    He suggested that I go down to Beverly Hills to meet with a Colonel Gotleib, a lifelong friend of Allen’s, who would introduce me to Joan Irvine Smith, the largest Irvine Company shareholder other than the foundation, and Keith Gaede, the husband of Joan’s cousin. At the time I certainly was aware of the Irvine Ranch, which covered about 22 percent of the land area of booming Orange County (at the time home to about 1.5 million people), stretching more than twentymiles inland from the coast. I had also long admired Irvine’s state-of-the-art master plan, and had been following Mobil’s battle to acquire the company. I flew into Orange County Airport the next day.
    I was impressed with Joan Smith the minute I met