Developer sets sights on O. C. Register
Mike Harrah may join an insider’s bid for the newspaper’s bankrupt parent company.
Some real estate developers like to avoid calling attention to themselves.
Mike Harrah isn’t one of them.
He stands 6 foot 6, weighs about 275 pounds and sports a signature ZZ Top beard.
He’s f lown his own Cobra attack helicopter in stunts for Hollywood movies and boasts on his website about “driving his dragsters at 240 miles per hour.”
A YouTube video shows him in wrap- around sunglasses riding at breakneck speed in a personal watercraft, gray beard ruff ling in the wind — all set to a heavy metal soundtrack.
“He cuts quite a path through town,” said Tim Rush, a former vice president of the Santa Ana Historical Preservation Society who has closely followed Harrah’s real estate deals. “From the cigars he smokes, to the big Cadillac Escalade he drives, to the Harley- Davidson he rolls around town.”
Now Harrah, best known for spearheading the redevelopment of downtown Santa Ana, is weighing whether to participate in an insider’s bid for the bankrupt parent company of the Orange County Register.
Tribune Publishing, owner of the Los Angeles Times, and Digital First Media, owner of the L. A. Daily News, have submitted initial bids for the company, Freedom Communications.
Harrah’s group, which includes Freedom co- owners Eric Spitz and Rich Mirman, has until Friday to make an offer.
Harrah, who owns the Santa Ana building where the Register is headquartered, has pressed for details about the paper’s f inancial state and the condition of the 14 acres surrounding the building — property he’d like to develop into a residential and retail complex.
“I started this deal because I’d like to see that paper survive and grow. At the end of the day, if I could buy the land and the media and had all my questions answered, I would probably make a bid for the whole thing,” said the 64- year- old Newport Beach resident.
But Harrah said he may decide to make a separate bid for the property alone — or buy it from the paper’s eventual owner. First, he wants to f ind out if the soil has been contaminated by the printing plant that has long operated on the site.
“I am a developer,” Harrah said, noting that his main interest is the land. “My total media experience is delivering the newspaper when I was 10 years old.”
Harrah’s flirtation with the Register is not his f irst time in the spotlight.
His plan to build the county’s tallest building in Santa Ana triggered criticism that he exercised undue inf luence over city officials in obtaining approval for the as- yet- unbuilt 37story office tower. Others see him as a visionary developer who helped transform the city’s downtown into a hip neighborhood of restaurants, shops and art galleries.
His back story includes a bankruptcy that left his first big business in ruins. It’s a past Harrah told The Times he no longer wants to talk about.
But Harrah, the son of a machinist and a teacher, hasn’t been shy about telling his story on his terms. In 2010, he launched a promotional website that contends to be the “information source for the life of Michael Harrah.”
After high school in the 1960s, the Whittier native left Southern California for Hawaii, where he wanted to be a surf bum. He worked on a pineapple plantation but soon quit after making pennies an hour and surfing too little, the website says.
Back home, Harrah went into construction, framing houses in Anaheim and near Orange. His “first big break,” according to the website, came when he built an 11,000square- foot home and sold it for nearly $ 1 million in 1971.
He then built apartments in Riverside, making him a wealthy man at age 25.
A decade later, a trade magazine ranked his Harrah Corp. the nation’s 20th- largest construction firm. One of his largest projects was a hotel and golf resort at Lake Havasu now named the London Bridge Resort.
All the while, Harrah flaunted his wealth.
“I was buying boats, motorcycles, planes and vintage cars by the dozens,” he told The Times in a 2002 prof ile. “I was making a lot of money.”
Then he wasn’t. Former business associates went unpaid, as did taxes, according to court records.
Harrah has blamed his financial troubles on the failed mid- 1980s sale of his Lake Havasu resort. His lawyer previously told The Times that the buyer was unable to make good on a $ 9million promissory note.
In 1990, Harrah f iled for personal and business bankruptcy, listing liabilities of nearly $ 30 million, according
to court f ilings. He lost his Newport Beach house and had to rent a bedroom in his mother- in- law’s Garden Grove home.
After emerging from bankruptcy protection, Harrah began his second act.
He sold lenders and investors on the idea that there were millions to be made in downtown Santa Ana — an aging historic district with vacant buildings.
Amid a brutal real estate slump that started in the early 1990s, Harrah bought on the cheap.
By 2002, he owned or coowned about 50 buildings in the area — accounting for more than 2 million square feet. He f illed them with art galleries, restaurants, a performing arts center and government workers.
“Buildings were empty. Buildings were abandoned,” said Santa Ana Mayor Miguel Pulido, a champion of Harrah’s projects. “And again and again, Mike came in and filled them up.”
Harrah has also given back to the community, including donations to the Orange County School of the Arts.
But he is a controversial f igure in Santa Ana, where his planned 37- story One Broadway Plaza would tower over nearby homes and office buildings.
Some residents of the adjacent French Park neighborhood complain that city officials approved a zoning change for the tower without sufficient scrutiny of the impact it would have on their neighborhood, or his claims that the project would generate a plethora of jobs.
“They simply jumped on the bandwagon,” said Debbie McEwen, a longtime Harrah foe and president of the Historic French Park Assn. “They were enamored with him.”
McEwen said Harrah tried to shut her up by buying her house, an offer she refused. Harrah said he did attempt to buy her house, but only because he wanted to make it into an office.
Former Santa Ana City Councilwoman Claudia Alvarez was criticized for casting the deciding vote for the project after disclosing that she had received a $ 3,200 donation from Harrah for a previous failed run for the Assembly. The California attorney general’s office had cleared Alvarez to cast a vote on the project, saying that Harrah’s campaign contribution did not constitute a conflict of interest.
Mayor Pulido abstained from the vote, citing a potential conf lict of interest. He told The Times that he was on the board of a bank that had given the project a loan. He also appeared in ads supporting One Broadway during a 2005 referendum on the project.
Santa Ana voters approved that referendum, which gave the green light to Harrah’s high- rise tower, with certain conditions. But construction did not start immediately and the controversy continued.
Former Santa Ana Planning Commissioner Victoria Betancourt’s ethics were questioned when it was revealed that she f lew on Harrah’s private jet to Oahu to check out a condo she was purchasing from the developer. She made the trip 10 days after voting to approve plans for the project’s ground f loor in 2006.
Harrah has said that he offered free air transportation to Hawaii to other buyers of his condos, and that he offered the unit to Betancourt at market price. Citing the same facts, the Fair Political Practices Commis- sion cleared Betancourt of any wrongdoing.
In 2008, Harrah’s company, Caribou Industries, donated at least $ 5,000 to support a ballot measure to extend term limits for council members. The measure passed, and two years later, Harrah persuaded the City Council to remove a key restriction placed on his project: that One Broadway must be 50% leased before he began construction.
“Anybody he couldn’t con, he would buy,” McEwen said.
Harrah called that accusation “untrue and unfounded” and scoffed at the notion that he got an easy ride from the city, saying he has spent at least $ 80 million on the project without breaking ground.
“A referendum election and 119 City Council meetings,” he said. “I wouldn’t call that an easy pass.”
Lawsuits and the recession further delayed construction. Now, after many promised start dates, Harrah said he plans to begin work on the tower in September.
By then he could have a stake in the Register or its land.
The Orange County institution has been on a roller coaster since 2012 when new owners Aaron Kushner and Spitz spent heavily on an expansion of the print Register at a time when other newspaper publishers were investing in their websites. The bet failed, and the company f iled for bankruptcy protection last year amid losses that exceeded $ 40 million over two years.
Harrah purchased the Register’s f ive- story headquarters off the 5 Freeway for $ 24 million in 2014 and leased it back to Freedom. Last year, Harrah tried to buy the surrounding acre- age from Freedom, which would have generated much- needed cash for the company.
The deal collapsed after Harrah ran into delays in gaining approvals to redevelop the land, according to a Freedom bankruptcy f iling. Harrah said he’s interested in building a mix of residential units, retail shops and a hotel. Mayor Pulido said he would be supportive of such a mix.
Though Harrah said he may back out of those plans, the man who f lew stunt helicopters in movies such as the 1998 action f ilm “The Siege” isn’t easily dissuaded from pursuing what he wants.
Ralph Opacic, founder and president of the Orange County School of the Arts., said he’s seen that tenacity firsthand.
When the Los Alamitos school was looking for a new home in 1999, Harrah offered to turn three of his vacant Santa Ana properties into school buildings at his own expense, with a promise to be paid back by the school, Opacic said.
Harrah delivered even though he had to work from a hospital bed after a helicopter he was piloting crashed in Nevada in June 2000.
“We weren’t sure if he would make it or not, but he rallied,” Opacic said. “He put plans on the ceiling of his hospital room and he would get a pointer and talk to all his contractors and say ‘ Do this, do this.’ ”
“At the opening, he was in a wheelchair and a full body brace.”
andrew. khouri @ latimes. com Twitter: @ khouriandrew Times staff writer James Rufus Koren contributed to this report.
‘ At the end of the day, if I could buy the land and the media and had all my questions answered, I would probably make a bid for the whole thing.’
— MIKE HARRAH, who is weighing whether to participate in a bid for the parent company of the Orange County Register