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His Companies' Projects Stretch From China to Chicago, Seattle to Baja's Southern Tip. Critics Wonder If The Empire Makes Any Sense. But Orange County's Master Builder is : Koll, Calm and Collected

May 14, 1995

Donald M. Koll became the envy of local developers when Taco Bell agreed to move its headquarters into his 12-story mirrored office tower near the San Diego Freeway in Irvine.

To show his gratitude, the real estate developer presented Taco Bell Chairman John E. Martin with a photo of himself in an unusual pose--crawling alongside the freeway at rush hour. During the lease-signing ceremony, Koll scribbled on the picture: "I'd crawl on my belly on the freeway to make you a deal!"

That was nearly 10 years ago. These days, the nation's top executives are much more likely to come crawling to Koll.

An innovator and deal-maker extraordinaire known for alliances with financial partners such as Aetna and Transamerica, Koll heads a Newport Beach-based real estate empire of companies that includes the second-largest manager of properties in the United States.

His mushrooming group of intertwined firms operate a string of gleaming office buildings and ritzy resort projects that stretch from China to Chicago and from Seattle down to the tip of Baja.

Called the "Teflon Man" of real estate, Koll, 62, outlasted critics who predicted his 30-year-old development empire would come tumbling down when property values in Southern California collapsed during the real estate depression of the early 1990s.

He survived because he had little of his own money in his investments, and because he expanded his existing property management division into a nationwide operation. He also raised cash by selling stock in the property management operation.

Koll has not always had a golden touch. An alliance to build office towers with controversial Columbia Savings & Loan Assn. was a financial loser; one mega-project to buy 15,000 acres from the Union Pacific railroad collapsed because of inadequate financial backing.

In addition, Koll's current plan to build 3,300 homes on sensitive wetlands in Huntington Beach is mired in controversy and has made him the target of bitter personal criticism.

A grandfather of 13 who has made Forbes' list of the 400 wealthiest people in the country, Koll keeps a low profile in Southern California, living quietly at his home on Lido Island in Newport Beach and spending time at his resorts in Mexico.

Unlike Donald Bren, the land baron who runs Orange County's Irvine Co. with an iron hand, Koll is known to subordinates as an easy-going and upbeat manager who runs a very decentralized operation.

While Koll has operated in Bren's shadow, his growing operations have made him a force to be reckoned with nationwide. He is probably better known in the rest of the country than he is in California, his employees say.

Now, Koll is once again redefining his business and trying to make possible in real estate what Sam Walton, founder of Wal-Mart, did for retail--one-stop shopping. By creating a network of companies that can solve a corporation's land needs around the world at a low cost, Koll wants to be the global real estate services provider to Fortune 500 companies.

"The real estate industry was fragmented and unorganized. And I think that's what we're really doing, we're organizing it into a one-stop shop," Koll says. "If a guy wants to build a plant in Mexico, we'll find the land, we'll build the building, we'll finance it and we'll lease it to him. Same thing in China. That's service."

Some, however, question whether Koll is the model for development companies or just a rudderless enterprise with too many projects in too many places. Others wonder whether it has become dangerously large. Some ask if a company road map exists at all.

"What real estate business is Koll not in these days? They are doing everything you can imagine," says Louis H. Masotti, director of the real estate management program at UC Irvine. "You begin to wonder if there is some magician inside Koll who knows how to manage everything, everywhere. Maybe they can afford buying a company a week, but what is the overall strategy? How does it get synthesized so they aren't fighting 17 different wars on 17 different fronts?"

Koll sees no confusion. He is the one steering the Koll ship, he says, and he is doing it, along with his right hand man and heir-apparent Ray Wirta, "quite carefully."

In fact, Koll is on a rapid buying binge, having purchased seven companies in the past year, including Kathryn Thompson Co., a major local home builder. Currently on his development plate are an airport for Mexico City, a massive convention center in China and the 3,300 new homes in Huntington Beach.

His empire, with more than 3,000 employees nationwide, rests on four related companies: a firm known only as Koll, the "full-service" real estate firm which includes the property management division; Koll Real Estate Corp., a publicly traded land owner and development company which has 70% of its assets mired in Bolsa Chica; Koll Construction, the building arm, and Koll International, which develops resorts in Mexico, including the 1,800-acre Cabo del Sol and 900-acre Palmilla in Baja.

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