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$1.50 VOL. 38 NO. 24 JUNE 15-21, 2015

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ORANGE COUNTY BUSINESS JOURNAL

�Smith 67 �Stance 62

Vinny Smith has added a professional soccerclub to the growing list of investments he’s com-piled since netting some $800 million on a $2.8 bil-lion sale of Quest Software three years ago.He led the Aliso Viejo-

based business softwaremaker before the sale to DellInc. and now heads OrangeCounty’s largest venture cap-ital firm. His recent purchase of NK

Istra 1961, a club in the topdivision of the Croatian FirstFootball League, appears tohave been personal ratherthan part of Toba Capital,the Irvine-based VC firmSmith launched with formerQuest colleagues in late 2012 to fund the “next gen-eration of IT infrastructure.”Smith’s camp won’t disclose the financial details,

but a safe estimate on the price for NK is in the $10million to $15 million range, considering the leagueisn’t among the sport’s European stalwarts—abunch generally found in Spain, England, Germany

Vinny’s Latest Play:Croatian Soccer TeamSPORTS: Deal includes 10,000-seat stadium on Adriatic coast

REAL ESTATE: Two offices not partof talks on teardowns for apartments

INSIDE

Taco Bell Adds India Franchise

page 5

PRES Buys inNorth OC

page 62

Ingram HQComplex Sells

page 3

ocbj.com

Great Far East Inc.—a local commercial realestate investor with funding from China—hasbought a portion of the Colton Plaza office campusthat is next to John Wayne Airport.Irvine-based Great Far East recently completed

the purchase of office buildings at 18952 and 18872MacArthur Blvd., a vacant restaurant, and a fewacres of excess land surrounding the properties.The two office buildings total about 100,000

square feet and hold the headquarters of automobilemarketing company Autobytel Inc., among other

�Great Far East 68

Socks in NBALineup, UnderwearAims for Holidays

page 17

Great Far East Addsin Airport Area onColton Plaza Buy

The Irvine Company’s Orange County port-folio includes 25 million square feet of offices,32,000 apartments—and 1,000 acres of avo-cado trees.That puts the Newport Beach-based devel-

oper—better known for the Resort at PelicanHill or Fashion Island—at the head of the foodchain of farmers still tilling OC soil.Irvine Co. doesn’t cast a shadow over local

agriculture the way it dominates the office andapartment markets here. Its 1,000 acres undercultivation ties it with Irvine-based OrangeCounty Produce LLC, which grows onpatches of land spread all over OC.A number of smaller growers here are multi-

generational family farmers with roots thatstretch into the last century—a track record on

�Agriculture 68

Farms Not Quite History: 5,000 Acres Under Plow, $132M CropGrowth Market

Klay Thompson: day job in NBA Finals, “ambassador”for San Clemente-based brand on side

Who knew socks could be hip?Stance Inc. did, and now it will try to

do the same with men’s underwear. “We feel like we have the momentum

in the marketplace, and if we can get theproduct right and bring it to market in acompelling way, then that consumer wholoves Stance and has been wearing ourproduct and sees an underwear fixturenext to a Stance socks fixture, is going tosay, ‘Awesome, I can get my underwearnow from Stance,’ ” said John Wilson,president of the San Clemente-basedcompany. “That’s what we are counting on taking

place, and we believe it will, but we alsoknow that we need to get product packag-ing, pricing—we got to get them right.”It looks as though Wilson and his team

have gotten several things right since thecompany got started in 2009. “The company has grown tremendously

from a headcount perspective, as well asour revenue perspective in the last 12months,” he said, adding that Stance’sstaff, now at 116, will likely reach 125 bythe end of the year. That’s up from 25 em-ployees a year ago. The growth will get a boost next year

when a licensing agreement to be the of-ficial “on-court” sock brand for the NBAkicks off. The socks will bear Stance’slogo, a league first for a uniform acces-sory.

By PAUL HUGHES

Caring forCaregivers

page 10

AggressiveStance By MEDIHA DIMARTINO

By MARK MUELLER

18872 MacArthur: 85% leased at time of sale

By CHRIS CASACCHIA

Smith: foray into prosports appears to belabor of love

Living legacy: Irvine Company grows avocados on 1,000acres near its Portola Springs, Orchard Hills developments

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68 ORANGE COUNTY BUSINESS JOURNAL Local breaking news: www.ocbj.com JUNE 15, 2015

� from page 1Agriculturepar with Irvine Co.’s 150 years on countyland.One difference is that Irvine Co. owns its

acerage, a distinction it shares with C.J.Segerstrom & Sons LLC in Costa Mesa,which has about 40 acres of lima bean fieldsalong the San Diego (405) Freeway as part ofa portfolio that’s better known for the SouthCoast Plaza shopping center and nearby of-fice buildings.Hardly any other commercial growers in

OC work on land they own these days.There is one thing in common across the

crop of local farm operations: All of the com-panies plan to continue into the foreseeablefuture. “The [avocados] are going to remain as

long as they’re economically viable,” saidPeter Changala, vice president of agricultureoperations for Irvine Co.The developer’s avocado orchards are at

the north end of Irvine near the PortolaSprings and Orchard Hills developments.Changala, a 30-year Irvine Co. veteran, ex-pects at least half of the 1,000 acres to remaineven as the area continues to develop.

Cash CropsHe said an acre of avocado trees produces

an average annual crop of 7,000 to 7,500pounds and sells for 50 cents to $1.25 apound based on fruit size—bigger avocadoesget a higher rate.Midrange estimates indicate about $6.3

million in annual revenue, and the operationis believed to be profitable. Changala is “the only agricultural em-

ployee of the Irvine Co.” Another 20 to 45 workers—depending on

season—are employed under the banner ofIrvine Valencia Growers, which works the1,000 acres of its parent; another 100 acresare leased to growers that produce strawber-ries, bell peppers and green beans. One is Orange County Produce, led by

former state food and agriculture departmentsecretary A.G. Kawamura, who also leasesdirt from the city of Irvine, the U.S. military,and Great Park developer FivePoint Com-munities.The mix of parcels he farms changes each

year, he said, as land goes to other uses.“Sometimes we have our fields for only

one crop.”County data show local growers produced

$132.5 million worth of crops in 2014, down

3% from 2013. The value of berry crops and tree fruit, in-

cluding local growers’ staples of avocadosand strawberries, increased 11% in the sameperiod.Some 23,000 county acres still support

agriculture, said Donna Barnes, a countydeputy agricultural commissioner: 18,000 for“rangeland” for animals, and 5,000 dividedabout equally among tree crops; strawberriesand vegetables; field crops; and ornamentalnursery plants, such as palm trees.“Orange County has a fantastic climate”

for growing produce, said Barnes. “If youever wanted to do it in an urban setting, gofor it here.”The 5,000 acres comes to about 1% of the

roughly 506,000 acres of land in OrangeCounty.Swaths of county land taken by cities or

sold for development over the past 60 yearshave become sites of homes and hotels forsome of the same reasons that made the areaa fertile locus of agriculture in the first place.Real estate holdings of families such as the

Segerstroms and Sakiokas—valued in thehundreds of millions of dollars—began withfarms that grew lima beans and celery.

FamilyA.G. and his brother Matt Kawamura are

third-generation family farmers that pay andcollect rents on farm operations.

Orange County Produce subleases land toEtchandy Farms, Fujishige Farms andManassero Farms. They all are run by thethird and fourth generations of immigrantfamilies—Basque, Japanese, Italian—that gotstarted with skills brought from their homecountries to Southern California in the earlypart of the last century.Other growers include Smith Farms and

Tanaka Farms in Irvine, South CoastFarms in San Juan Capistrano, and at leasttwo working vineyards: Giracci Vineyardsand Farms in Silverado and Newport BeachVineyards and Winery.These ventures often offer other activi-

ties—there are educational programs atTanaka and a grocery store selling jams andhoney at the Manassero Farms in front ofIrvine Valley College, a site it leases fromEdison International.Dan and Anne Manassero grow strawber-

ries, green beans and tomatoes on 40 acresthere and in Tustin and Brea.McKay and Laurie Smith grow 7,000

flats of strawberries a season at about $60 aflat, and broccoli, artichokes and other veg-etables on 15 acres in Irvine, Fountain Valleyand Huntington Beach.

FutureAcreage can come and go.A 1.3-acre parcel in La Palma previously

used for agriculture, the last such piece of

land in the city, a spokesperson said, wasbeing considered for a seven-home subdivi-sion by the city’s planning commission lastmonth.

‘Giving Way’The Manasseros’ 40 acres is down from a

recent 60, with dirt that once supported theirstrawberries now part of the future site of anew corporate campus for Irvine-basedBroadcom Corp.“Farming is giving way,” and it can’t

touch the profitability of land development,said the Irvine Co.’s Changala—who is alsothe third generation of his family to growfood.Kawamura said farming would continue

here because of growing demand—morepeople who still need to eat—and new farm-ing methods that do more with less land.One effort is with Alegria Farms at the

Great Park. It grows vegetables verticallyand is developing soils with richer “micro-bial populations.”Kawamura said Orange County Produce

uses precise watering techniques and createshabitats for insects—wild bees, wasps, ladybugs—to grow food better.“We’re in the middle of a renaissance of

agriculture, reawakening to how importantit is,” Kawamura said. “One of the greatestthings the public can do is support locallygrown produce [and] see it as an asset.” �

Orange County remains home to severalagricultural organizations with a history thatgoes back to the area’s days as a major agri-cultural center:

� Western Growers Foundation in Irvineis a trade group for growers with about 2,500members who handle about “half of all pro-duce grown in the U.S.,” said spokespersonWendy Fink-Weber.

� The United Agribusiness League, alsoin Irvine, has about 500 members in “a tradeassociation for anything related to agricul-ture,” said Chief Executive Kirti Mutatkar.

� The Orange County Farm Bureau inIrvine, which has 4,000 members, represents“Orange County agriculture through public re-lations, education, and public policy advo-cacy,” according to its website.

� The Irvine-based California AvocadoCommission works to boost demand for5,000 growers through education and adver-tising to stores, restaurants, chefs and con-sumers. �

Support Groups

� from page 1Great Far Easttenants. The offices, which are four stories each, were

about 85% leased at the time of the sale, whichwas completed last month, according to prop-erty records.CoStar Group Inc. records put the sale price

at about $35.2 million, or roughly $320 persquare foot for the three buildings at the site. Great Far East got a $20.5 million loan from

Cathay Bank to help fund the deal, accordingto property records.

Other PropertiesIt is the largest local reported purchase for

Great Far East since 2011, when it paid $56.5million for a nine-story building in the IrvineSpectrum that holds the headquarters of restau-rant chain Yard House USA Inc.Great Far East also has a four-story office

about a block from the Colton Plaza buildings,along Von Karman Avenue, among its Irvine in-vestments.Most of the company’s disclosed purchases

beyond Irvine have been in China, where it has

acquired a variety of residential and commer-cial properties, according to the company’swebsite.Affiliates of Irvine-based Colton Co., de-

veloper of the namesake office campus, soldthe MacArthur Boulevard buildings to GreatFar East.Colton remains the owner of several other

low-rise buildings at Colton Plaza, a mixed-use office development that is about 500,000square feet and located between MacArthurBoulevard and Von Karman Avenue, immedi-ately north of Campus Drive.The campus has had a good amount of res-

idential development in recent years on formercommercial sites. Recent additions include theCarlyle at Colton Plaza, a new 156-unit rentalproject built by Beverly Hills-based New Pa-cific Realty Corp. that is across the streetfrom the buildings that Great Far East justbought.

ApartmentsColton Co. has been working with the city

of Irvine to get approvals to build another 876apartment units on 12.6 acres it still owns atthe campus. Those sites now hold offices,which would be razed to make way for any

new residential development.Irvine’s city council in January agreed to the

real estate investor’s request to negotiate anagreement for the proposed development, andnegotiations are ongoing.The MacArthur Boulevard buildings that

Great Far East bought are not part of those ne-gotiations.It is not known whether Great Far East is in-

terested in redeveloping part of its propertyinto multifamily or other uses. The excess landthat the company purchased appears largeenough to hold additional buildings.Last year, Great Far East got city approvals

to build a 288-unit apartment project on excessland it owns next to its office at 18831 VonKarman Ave., which it bought in 2010 fornearly $12 million. There has been no time frame given for con-

struction of that rental project—dubbed Mi-lani—to move ahead.

Legal DecisionThe sale of the MacArthur Boulevard build-

ings by Colton comes about a month after alegal decision was handed down to the com-pany and its founder, David Colton.Investors in several Colton Co.-run funds

that own office properties in Orange Countyhad alleged “numerous acts of mismanage-ment” and fraud against the real estate com-pany and its executives, according to DanielCallahan, a lawyer with Santa Ana-basedCallahan & Blaine who has represented theinvestors in recent litigation.In April, as a result of those legal proceed-

ings, David Colton and his related entities wereremoved as the investment fund manager forfunds tied to a bulk of the company’s localproperties.The ruling affects six commercial real estate

funds that purchased 74 office buildings total-ing nearly 4 million square feet of space,mostly in Orange County, according to Calla-han & Blaine.It is not known whether the sale of the

MacArthur Boulevard properties was directlyrelated to that judgment or if any other sales ofColton Co.-owned property are expected as aresult of the ruling.Colton Co. officials could not be reached for

comment. CoStar records show Colton-related affili-

ates selling only one other local property thisyear, a 37,400-square-foot office in MissionViejo that sold for about $9.1 million. �

Anne, Dan Manassero: grow strawberries, green beans, tomatoes on 40 acres spread overIrvine, Tustin, Brea

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