Profile Of Catellus Development Corporation

compiled by George Draffan
Public Information Network
PO Box 95316, Seattle WA 98145

201 Mission Street
San Francisco CA 94105
(415) 974-4500

Catellus Development Corporation is a diversified real estate operating company that owns, manages and develops real estate for its account and others (Catellus, Form 10K, Mar. 31, 1997).

In 1983, the Southern Pacific merged with Santa Fe Industries to form Santa Fe Southern Pacific Corporation (SFSP). Catellus was originally organized in the state of Delaware in 1984 as an indirect, wholly-owned subsidiary of Santa Fe Pacific Corporation to conduct the non-railroad real estate activities of Santa Fe Industries and Southern Pacific Company (Catellus, Form 10K, Mar 31 1997). In 1987 the U.S. ICC rejected the merger of Santa Fe and Southern Pacific, so SFSP began restructuring by selling off the Southern Pacific Railroad, real estate, and timberland, pipelines, construction operations. In 1990, as Catellus was spun off to Santa Fe shareholders (Forbes, Oct. 26, 1992, pp. 46-47), it owned two million acres of land in 13 states (Wall Street Journal, Apr. 25, 1990). At the end of 1992, "former affiliate" Catellus managed 1.3 million acres of Santa Fe lands in Nevada and Utah (Santa Fe, SEC Form 10-K, 1992, p. 11).

As of December 31, 1996 its portfolio included approximately 837,000 acres of land, 16.4 million square feet of income-producing property, 5,300 acres of land leases and interests in twelve joint ventures. Approximately 76% (by square feet) of the Company's industrial property, 85% of its retail property and 65% of its office property are located in California, with the balance mainly concentrated in metropolitan Texas, Illinois and Arizona. In addition, 30% of the Company's industrial land holdings, and all of its resource group portfolio and major mixed-use projects are located in California (Catellus, Form 10K, Mar. 31, 1997).



In Dec 1989, Santa Fe sold a 20 percent stake in its Santa Fe Pacific Realty to a limited partnership made up of CalPERS and JMB Realty for $398 million (Wall Street Journal, Apr 25 1990 p. A4). In 1990, Santa Fe spun off Catellus Development to Santa Fe shareholders.

In 1992, CalPERS owned a $103 million bond convertible to Catellus stock in an amount equal to the face value of the bond (the cheaper the stock price, the more stock Catellus could demand). Other Catellus shareholders in 1992 included the bankrupt Reichmann family (15 percent) and Chicago investor Sam Zell (12 percent) (Forbes, Oct 26 1992 p. 46-47).

At the end of 1996, the largest single shareholder of the Company was the California Public Employees' Retirement System ("CALPERS"), which at that time owned approximately 41.7% of the common stock (Catellus, Form 10K, Mar. 31, 1997).



(source: Catellus, Form 10K, Mar. 31, 1997):

AZ Phoenix.
CA Anaheim.
CA City of Industry.
CA Emeryville and Oakland: East Baybridge Center.
CA Fremont: Pacific Commons Business Park.
CA La Mirada (held in joint venture).
CA Ontario.
CA Rancho Cucamonga.
CA Richmond.
CA San Francisco: Mission Bay.
CA San Jose: South Bay Center.
CA Santa Fe Springs.
IL Chicago: International Centre, Woodridge, Romeoville.
IL Chicago: Railway Exchange Building.
OK Oklahoma City.
TX Dallas: Coppell, Garland.

CA San Francisco: Mission Bay. The Company owns 166.9 acres of property in San Francisco which is part of a 313-acre mixed-use development known as Mission Bay. The balance of the property is primarily owned by various public entities. The property is subject to easements or other encumbrances in favor of public utilities or public entities, leases, exchange agreements between the Company and the various public entities and specific plan and zoning requirements regarding further development. The Company's property was the subject of a 1991 Development Agreement between the Company and the City and County of San Francisco that was terminated by the Company in February 1996. During 1996, the Company reached an agreement in principle with the City of San Francisco for a 65-acre portion of the 313-acre project. The entitlement process to implement that agreement in principle is underway and will continue into 1998. The revised plan for this project will include 2,400 market-rate units, up to 350,000 square feet of entertainment retail and up to 250,000 square feet of neighborhood and community-serving retail. Under this agreement in principle, incremental tax revenue generated by the project will be available to finance infrastructure. It is not feasible to estimate the cost of this development until entitlements have been obtained. In March 1997, the University of California at San Francisco ("UCSF") entered into an exclusive negotiation period with the Company to pursue an agreement, subject to the receipt of the necessary entitlements and other conditions, to locate a planned expansion of UCSF's campus on the Mission Bay project. There can be no assurances, however, that the necessary entitlements will be obtained, that the timing of entitlements, if obtained, will meet marketing needs, or that the other conditions will be met. Negotiations are expected to continue throughout much, if not all, of 1997 (Catellus, Form 10K, Mar 31 1997).

CA Fremont: Pacific Commons Business Park. In September 1996, the Company received entitlements from the City of Fremont for 8.5 million square feet of development, upon compliance with the certified environmental impact report and applicable laws. The development would include 7.8 million square feet of research and development, light industrial, warehouse-distribution and corporate campus space and 700,000 square feet of retail. In accordance with the environmental impact report and applicable law, the Company is working with the City, state and federal government agencies to address the impact of the park on wetlands and special status species. There can be no assurances that the necessary government approvals will be obtained, or that the timing of approvals, if obtained, will meet marketing needs (Catellus, Form 10K, Mar 31 1997).



In October 1995, the Company established a goal to sell $100 million of non-strategic land assets over the 15-month period ended December 31, 1996. Total program sales for the 15 months equaled $123.7 million, exceeding the goal by $23.7 million. In addition, $9.1 million in other non-strategic property sales occurred in 1996. Proceeds from these sales were used primarily for debt reduction and to fund the Company's development activities.

The Company continued to place a greater emphasis on increasing its development activity: During 1996, the Company commenced construction on 3.3 million square feet of new development, compared to 900,000 square feet in 1995, and completed 1.6 million square feet compared to 600,000 for 1995. In March 1996, the Company acquired The Akins Companies (now the Catellus Residential Group), a residential developer based in Southern California, to place the Company in a better position to pursue residential opportunities on certain existing landholdings.

In addition, the Company intends to grow this business to opportunities on land not currently owned. In addition to non-strategic land sales, the Company closed $62.5 million in property sales related to industrial, residential and mixed-use land development. These sales contributed $15.6 million to 1996 earnings compared to $1.0 million in 1995.

The Company continued to grow its fee businesses. Development and management fee income (net) increased to $3.4 million during 1996 from $1.9 million in 1995. This increase was primarily from "design build" fee income for the 500,000-square-foot Metropolitan Water District's headquarters at Los Angeles Union Station, residential development fee income and management fees from the Burlington Northern Santa Fe management contract (Catellus, Form 10K, Mar 31 1997).



(source: Catellus, SEC Form DEF 14A, March 1999).

Joseph F. Alibrandi. Chairman since 1985, President from 1970 to 1985 and from 1996 to present, and Chief Executive Officer from 1974 to 1994 and from 1996 to present, of Whittaker Corporation (a diversified company with business activities in the aerospace and communications field); and Chairman since October 1991, and Chief Executive Officer from October 1991 to October 1992, of BioWhittaker, Inc. (a diversified company with business activities in the biotechnology field). Director of Whittaker Corporation, BioWhittaker, Inc., Jacobs Engineering Group, Burlington Northern Santa Fe Corporation, Bank of America NT & SA, BankAmerica Corporation, and NewMed Corporation.

Stephen F. Bollenbach has served as Chairman and CEO of Hilton Hotels Corporation since 1996. He is also Chairman of Park Place Entertainment Corporation, a gaming spin-off from Hilton. From 1995 to 1996, Mr. Bollenbach was Executive Vice President and Chief Financial Officer of The Walt Disney Company. From 1993 to 1995, he was President and Chief Executive Officer of Host Marriott Corporation. Mr. Bollenbach is also a director of Ladbroke Group PLC, Time Warner Inc., Kmart, Inc. and Spring Group PLC.

Daryl J. Carter. Co-Chairman of Carter Primo Chesterton, L.P. (a real estate investment management company) since 1992. From 1990 to 1992, President of Carter Property Company (a real estate asset management company). From 1985 to 1990, Vice President of Westinghouse Credit Corporation (a real estate investment company).

Richard D. Farman. President and Chief Operating Officer of Pacific Enterprises (a utility holding company) since January 1995. From 1993 to 1995, Chief Executive Officer of Southern California Gas Company (a natural gas distribution utility) and President and Chief Operating Officer of Pacific Enterprises. From 1989 to 1993, Chairman and Chief Executive Officer of Southern California Gas Company.

Christine Garvey. Executive Vice President, Corporate Real Estate, OREO Sales and Property Management of Bank of America NT & SA since 1992. Senior Vice President (OREO Division) of Security Pacific National Bank from 1991 to 1992. Senior Vice President (Manager, Corporate Real Estate Department) of Wells Fargo Bank from 1986 to 1991.

William M. Kahane. Managing Partner of Milestone Partners Limited (an investment banking and financial advisory company) and Chief Investment Officer of Robert H. Burns Holding Ltd. (a private investment company) since 1992. Director (Advisory) of Yue-Sai Kan Cosmetics. Director of Robert H. Burns Holdings Ltd. and Robert H. Burns Ventures Ltd.

Donald J. McNamara. Founder and Chairman of The Hampstead Group (investment company) since 1988. Chairman of Bristol Hotel Company and Director of Felcor Suite Hotels and Mountaisa Entertainment International, Inc.

Leslie D. Michelson has served as a Director since 1997. From March 1999 to the present, Mr. Michelson has served as Managing Director of Saybrook Capital, LLC, an investment bank specializing in the provision of strategic and financial advisory services to the real estate and health care industries. From 1998 to 1999, he served as Chairman of Protocare. From 1988 to 1998, Mr. Michelson served as Chairman and CEO of Value Health Sciences, Inc. He is also a Director of G&L Realty.

Nelson C. Rising. President and Chief Executive Officer of the Company since September 15, 1994. From 1984 to September 1994, Senior Partner of Maguire Thomas Partners, Inc. (a commercial real estate developer).

Joseph R. Seiger. Chairman of the Board of Directors of the Company since July 1994. Since 1973, President of Vintage Properties (a residential and commercial real estate developer).

Jacqueline R. Slater. Managing Director, Chase Manhattan Bank and President, Chase Commercial Mortgage Securities Corp since 1997. From 1990 to 1997, Managing Director, Portfolio Disposition, Structured Finance, Commercial Mortgage and Securitization of Chemical Bank Real Estate Finance.

Thomas M. Steinberg. President of Tisch Family Interests (manages and supervises various investments for members of the Laurence A. Tisch and Preston R. Tisch families) since 1997; Managing Director of Tisch Family Interests from 1991 until 1997.

Beverly Benedict Thomas. Vice-President of UT Strategies Inc. (a public affairs firm). From 1991 to 1995, Assistant Treasurer of State of California. From 1984 to 1991, Partner of Unger Thomas (a development consulting firm).