Maguire Takes Flight

0

Standing on the tarmac at Van Nuys Airport last week, Robert Maguire was loose and upbeat in his blue blazer and khakis.

And he had reason to be. He’s back in the game.

Just months after being deposed from his namesake real estate company, the famously bellicose businessman was joking with his son and prot & #233;g & #233; as he discussed his latest business venture.

Seemingly out of nowhere, the 73-year-old Maguire has become the largest terminal operator at the nation’s largest general aviation airport a place where L.A.’s executives and rich and famous love to park their private jets and helicopters. In other words, it’s a good business but it’s just one of his interests.

“I have all kinds of activities. I just have a hell of a lot of energy,” said Maguire. “I like to build things. My kids say, ‘Oh my God! You finished a guest house. You have a house you want to rehab. Stop! Oh my God, stop!’ I say, ‘No, I like it.'”

The relaxed display on an unseasonably hot October day belies Maguire’s famed ferocity and drive, which show no signs of dimming, despite a rough year.

In May, Maguire swallowed his pride and stepped down as chief executive of embattled commercial developer Maguire Properties Inc. Since then, he’s watched from the sidelines as his former company took a beating on Wall Street. Maguire also has stood by as he’s been blamed for the company’s decline with critics citing everything from poorly-timed business decisions to his management style that they claimed was ill-suited to running a public company.

But Maguire hasn’t idled or even slowed; instead, he’s thrown himself into a variety of businesses, including private aviation, real estate and natural gas. And he’s done this at a time when other businessmen of his ilk might unwind and enjoy the fruits of their labors.

He’s even surprised people with his recent inclusion in Forbes magazine’s list of the 400 wealthiest Americans. He placed at No. 355 with an estimated fortune of $1.4 billion. Friends and colleagues never expected he would slow down.

“He’s competitive if he is bird shooting or playing golf. Relaxation isn’t what Maguire’s made of. If there is a problem, he will attack the problem with great dispatch,” said longtime friend and real estate businessman John Cushman, chairman of Cushman & Wakefield Inc.

“He is never going to be a quiet guy in the corner who watches with no passion. Don’t ever count him out he’s a fighter.”


Longtime aviator

Maguire’s Santa Monica-based Maguire Investments has a variety of local and national interests. The company owns 5.5 million square feet of office buildings and has entitlements for about 4.5 million square feet of new commercial development. In Texas, it has sizable natural gas holdings, which will soon start producing. And then there’s aviation.

The company is aiming to remake the Van Nuys Airport, which is popular because it’s just over the hill from Beverly Hills and other tony enclaves where many local private jet owners live. But even though billionaires park their Gulfstreams there, the airport is rough around the edges dilapidated hangars dot the facility, which is run by Los Angeles World Airports, a unit of the city of Los Angeles.

In the last two years, Maguire’s company has purchased the Van Nuys operations of three aviation services companies. Those deals, the most recent of which closed this year, have made Maguire the largest landholder and fixed base operator. So-called FBOs house and maintain planes. They handle fueling, maintenance and flight management.

“It’s a big operation and we see it growing,” said Maguire, who in typical fashion talks of expanding to other airports. “I think there is just an opportunity to do a lot of development that is really first class.”

Emblematic of Maguire’s plans is a gleaming facility the company recently built for tenant TWC Aviation, a flight management and charter company. The two-story building includes a 44,000-square-foot hangar and 12,000 square feet of terminal and office space. It’s clad in iridescent blue corrugated panels and outshines everything else at Van Nuys.

In total, Maguire leases 59 acres from LAWA, and has a quarter million square feet of hangar, terminal and office space. It plans to develop another half million square feet. All in all, the planned investment would total about $250 million.

Jack Keady, a transportation consultant based in Playa del Rey, said Maguire’s business plan makes sense as private aviation grows, but Maguire is running straight into a recession.

“We are seeing more and more mom-and-pop FBOs bought by the big guys,” Keady said. “You can see some consolidation and fierce price battles and maybe dumb people going out of business.”

It’s fitting that Maguire would pursue the private aviation business. He is a second-generation pilot; Maguire’s late father, Robert F. Maguire Jr., was famous for flying Jewish refugees to Israel in the late 1940s and early 1950s. The elder Maguire was dubbed “Irish Moses” for creating the secret airline.

An Oregon native who has long lived in Los Angeles, Maguire learned to fly airplanes as 12-year-old. He was taught by his father’s colleagues at an airport in Tel Aviv.

While Maguire doesn’t pilot planes much anymore, his 33-year-old son, Alec, is continuing the family tradition. The son is a jet and helicopter pilot, and as president of Maguire Aviation he handles day-to-day operations, working closely with his father.

“We’ve actually had a good deal of fun working together,” said the son. “Once we’ve figured out how to make it work and make it work well, it’s been wonderful.”


Rough edges

Of course, Maguire can now devote more time to his burgeoning aviation business because he no longer runs his public real estate firm.

Maguire Properties was once a darling of the real estate world. The company is an offshoot of Maguire Thomas Partners, the private commercial real estate development company that Maguire co-managed from 1983 to 1996. During that time, Maguire Thomas Partners built some of L.A.’s iconic office buildings, including the 73-story U.S. Bank Tower.

“There is nobody that has been a more effective developer than Maguire of the monster high rise buildings,” Cushman said. “He always had a different bent than the other developers.”

After the dissolution of Maguire Thomas Partners, he formed Maguire Properties and took it public in 2003. But Maguire got into trouble in 2007 after purchasing a $3 billion office portfolio that included several Orange County buildings. The properties were decimated when scores of subprime lenders that were tenants went under.

“That was the coup de grace, the straw that broke the back,” said Barry Vinocur, editor of REIT Zone, a widely read industry publication. “He had all this exposure to a single industry. Rob made an outsize bet on Orange County and when Orange County went down, he went down too.”

Maguire, who hasn’t talked much since stepping down, told the Business Journal that he could have worked through the Orange County problems if the company were private.

“I thought it was time to get it out of the public markets. I didn’t like the direction,” said Maguire. “I didn’t like that for two years. I thought, ‘This doesn’t feel good.’ Intuitively, it is time to get out of the public markets.”

When his second attempt to sell the company failed in December, Maguire said it was clear he would step aside, something he said he’s since made peace with. “It was frustrating as hell, and look, it cost me a lot of money,” Maguire said.

One of Maguire’s longtime associates and friends, Mike Van Konynenburg, chief executive of real estate investment bank Eastdil Secured, contrasted Maguire’s long tenure as a private businessman with his brief flirtation in the public market.

“He’s spent the majority of his career as a private company and that transition from private company entrepreneur to public company CEO is difficult for a lot of people,” said Van Konynenburg. “Everything you say is scrutinized in the public company setting and it’s a very different type of situation from running a more entrepreneurial private business.”

However, Vinocur and other critics are unsympathetic, saying that Maguire was never cut out for the public market.

“Rob, he’s a square peg in a round hole in the public market,” Vinocur said. “He’s a very strong personality who doesn’t believe in management by consensus. He believes in managing by fiat.”

Nelson Rising, a former executive at Maguire Thomas, now helms Maguire Properties. Maguire said he’s had a long friendship with Rising he pointed out that they are both UCLA graduates and praised his smarts. He said they speak occasionally.

“I can say (to Rising), ‘Hey, this what I think you ought to be doing, and you can do what you want with it,'” said Maguire, adding that he doesn’t know if Rising takes his advice.

Rising declined to comment.


The future

Though Maguire no longer runs the public company that bears his name a fact he concedes is awkward he hasn’t shied from the limelight.

On Oct. 10, he released a four-page letter to Maguire Properties shareholders that expressed confidence in the company while also stating grave concern about the current Wall Street “panic.” Some observers viewed the letter as a stab at revisionism, with Maguire attempting to cast his final chapter with the company in better light. Maguire discounts such talk.

“I want to see that company do well and that’s really important to me; that’s the reason I wrote the letter,” he said.

These days, Maguire runs Maguire Investments from a Santa Monica office building owned by his company. Maguire Properties’ corporate headquarters also used to be there before Rising relocated them downtown. So at least in terms of his real estate business, little has changed for Maguire. He still goes for an early morning row in the ocean most days before making his way to the same Santa Monica building. “I like to do deals. It’s a fun business,” he said, simply.

And there have been other activities to occupy his time; he’s begun growing wine grapes on an acre at his hillside Bel-Air home. Maguire, who is divorced and has four children and eight grandchildren, said that at first people discouraged him from giving wine a try, saying it wouldn’t work.

“I said, ‘OK then, do Concord grapes, I don’t care.’ I just love the way it looks,” he said. “And then everybody is testing it and it’s terrific Cabernet.”

Maguire harvests the grapes, which are then trucked to an off-site location for the winemaking. But it hasn’t gone exactly as planned; a few weeks ago Maguire had to do an emergency harvest because of the hot and windy weather.

Maguire spoke of the harvest matter-of-factly. But he has a lot more fun when he talks about the finished product, displaying his humorous side.

He’s decided to name his wine with a nod to his personality.

It’s called Rascal Robbie.

No posts to display