Pando

A Journey Through Oligarch Valley, Pt 2: Tejon Ranch (Exit 215) 

By Yasha Levine , written on September 1, 2015

From The Oligarch Valley Desk

Previously: A journey through Oligarch Valley (Prologue)

In Oligarch Valley, you can drive for an hour at 80 mph along the side of a single oligarch-family farm. And yet, these giant farms are nearly invisible to the general public. That’s maybe the most shocking thing of all: these billionaire plantation owners have somehow been able to blend into the woodwork, conning Americans by masquerading as small family farmers and selfless stewards of the land. They’ve gamed us so well that we not only support their land wealth with our hard-earned money, but are grateful for the privilege to do so.

Tejon Ranch is a mixed farm, ranching and hunting preserve that sits atop the Tehachapi Mountains, which separate the Central Valley from greater Southern California’s metropolitan sprawl. The ranch is about 30 miles north of Six Flags Magic Mountain. Full of swerving big rigs, steep grades and traffic jams, it marks the beginning of the long tortuous drive through the Central Valley. From I-5—at a speed of 80 mph—it doesn’t look like much: some sunbaked golden hills, grazing cattle and a couple of gas stations along the way.

But Tejon Ranch is unlike any other place in California. Even among the vast landholdings of Oligarch Valley’s billionaire farmers, it stands out. It’s called a “ranch,” but it’s more like a duchy or fiefdom.

Sitting almost a mile above sea level, Tejon Ranch encompasses somewhere around 425 square miles of land. Ten times the size of San Francisco, it is considered the largest single piece of private property left in California—part private nature preserve, part diversified business containing farming, ranching, oil and gas extraction and real estate development operations.

For nearly a century, Tejon provided income, sustenance, private hunting grounds, prestige and vast hereditary wealth to one of Southern California’s most powerful oligarch clans: the descendants of Harry Chandler, L.A.’s alpha-oligarch and owner of the Los Angeles Times. But now the land is the hands of a consortium of powerful private equity firms and hedge-fund scammers. And they have a mind to wring huge profits from their investment by remaking Tejon Ranch into a series of sprawling master-planned suburb cities.

Tejon Ranch is the perfect gateway to our journey of discovery through Oligarch Valley. It demonstrates how farmland, privatized water rights and real estate development go hand in hand in the Golden State. It also shows how a small clique of lowkey aristocratic families continue to plunder California, all because one of their ancestors got here earlier than anyone else.

Tejon’s size bedazzles every journalist who visits it. “To stand on a windswept hill at Tejon Ranch is to be at once humbled, enthralled, and saddened by vistas that in years past defined California and the West by their plenty rather than their dearth,” wrote Edward Humes in the Los Angeles Magazine. East Coast urbanites also love to get poetic with the subject matter, although they seem to prefer a more impressionistic style: “Seen from afar [Tejon Ranch] looks like a swatch of green-and-gold fabric, rumpled here and there in small pleats and gathers, spread over an area six miles long and three miles deep. Behind it rise the Tehachapi Mountains, and if you look closely you can see a glint of silver running through the landscape: the water of the California Aqueduct flowing south,” gushed New York Times magazine contributor Jon Gertner.

And it’s true. Tejon Ranch is majestic. But it’s also strategic. Just about everything and everyone that travels by land between Southern and Northern California passes through it: people, food, electricity, oil and natural gas pipelines and telecommunication lines. Even the drinking water that keeps Los Angeles and Southern California from dying of thirst passes through Tejon.

Tejon is a choke point in a supply line that serves tens of millions of people. It’s also a pristine wilderness, spanning rolling pastures, narrow valleys, streams, grasslands and old oak growth. Wild boars, mountain lions, coyotes and herds of deer and elk roam the land. Nearly one hundred rare and endangered species depend on Tejon Ranch’s undeveloped land for survival. These include the huge, bald-pated California condor, which was recently saved from extinction by a dicey and painfully slow government program.

But since it’s private property, none of this wilderness is accessible to the general public—unless, of course, the general public wants to fork out thousands of dollars for a multi-day Tejon Ranch hunting expedition. Hunting packages go from $20,000 for a prized Elk buck to $4,000 for a mere wild boar. They include a private hunting guide and the ability to range far and wide across the Ranch property.

As for everyone else? Well, it’s not like you can just come waltzing in uninvited. That’s the first thing I find out when I take the Fort Tejon exit off the 5 and decide to explore.

The only public roads in Tejon Ranch run for a few miles along either side of I-5. There’s not much of interest here: a school, a few homes, an ExxonMobil oil pipeline substation and a reconstructed Fort Tejon historical landmark, the site of the U.S. Army’s failed experiment with using camels. When I stopped at the local convenience store, a guy made me an offer. “If you need a ride into town, I gotta truck. Take you anywhere you need to go,” he said, his eyes twinkling. He saw I had my own car. What kind of secret perverted signal was he giving me? I pressed on.

The headquarters of the Tejon Ranch Company is a low-slung building sitting behind a tall hedgerow a few hundred feet away from the freeway. It’s closed when I arrive and the parking lot is empty. The scene is peaceful, despite the torrent of cars and big-rigs that flows by just a few hundred yards away. The sun hovers above, throwing glare off the tall glass doors and lighting up the large brass handles, fashioned in the shape of Tejon Ranch’s creepy logo: a golden cross atop a golden hill.

The same logo—which some have likened to a cross sitting atop a vanquished crescent—adorns a couple of massive signs along the freeway. These signs bear the cryptic message “Tejon Ranch: Preserving California’s Legacy.” Yeah, “preserving.” Good to know that the owners of Tejon Ranch haven’t lost their sense of humor.

The paved public road abruptly turned into gravel switchback that climbed up one of the sides of Grapevine Canyon. It was a private road. The shrill “Posted! No Trespassing” signs hanging every 100 feet left no doubt about it. I drove maybe a mile further before hitting a roadblock equipped with security cameras and a dozen even shriller signs plastered everywhere: “Keep Out”…“No Trespassing” … “Smile You’re On Camera” … “Private Property”… I pull over and call to a man walking a golden retriever. The man is old, white and decked out in camo. He paused, considering my question. Then tersely, “This is private property.”

To understand Tejon Ranch and how it fits into California’s Oligarch Valley, we have to go back to the man whose greed and vision made it all possible: Harry Chandler, L.A.’s notorious O.G. oligarch and owner of the Los Angeles Times.

Harry Chandler attended Dartmouth and worked as a boy model in his youth. When he came down with a lung condition he moved to Los Angeles from New Hampshire on advice from his doctor. Los Angeles didn’t just cure Harry, it gave full scope to his latent talent for shrewd and vicious speculation.

The young man grasped that real estate, water and news media were California’s Holy Trinity. He married the daughter of Los Angeles Times’ publisher Harold Gray Otis, bought up real estate on the cheap and then used his newspaper to pimp out Los Angeles to eager Midwesterners, advertising Los Angeles as the “white spot of America,” where decent white folk could live in harmony and where decent American businesses would never need to fear organized labor.

Looking over Harry Chandler’s achievements, it’s amazing how underappreciated he is by the general public, especially when compared to his fellow publisher-oligarch William Randolph Hearst from San Francisco. Harry Chandler pretty much created modern Los Angeles. Most of L.A.’s iconic locations and landmarks were partially or fully backed by Harry, including all of Mulholland Drive above Beverley Hills.

The giant Hollywood sign overlooking L.A.? Yep, Harry had a hand in that, too. Originally, it read “Hollywoodland” and was built as a temporary promotional gimmick to sell plots of land in Harry’s development in the Hollywood hills. But the cheap marketing trick worked so well it was kept on after the lots had all been sold off. In the 1920s, Harry invested in Douglas Aircraft, which paved the way for Southern California to become the capital of the U.S. aerospace/defense industry.

Harry Chandler’s newspaper, the Los Angeles Times, was an extension of his real estate empire. It was also the most virulently racist and rightwing publication this side of Dixieland. It was violently antilabor, and waged a prolonged and vicious propaganda campaign— backed up with real physical violence and suppression—against unions and labor organizers. This brutal suppression kept Los Angeles free of unions all the way to the 1930s. The tension got so bad that two union activists dynamited Los Angeles Times’ printing press.

The L.A. Chamber of Commerce, founded by Harry’s father-in-law advertised Los Angeles to east coast businessmen plagued by “labor difficulties, inefficient workers and a constantly rising labor cost… a real opportunity to operate WHERE NATURE HELPS INDUSTRY MOST.” Yep, Los Angeles was business-friendly by the very laws of nature. Historian Mike Davis called it “urban eugenics.” Who could argue with nature itself?

These attacks on minorities and labor bolstered the Chandler’s real estate empire. The lack of unionization and the promise of a white utopia attracted wealthy anglo easterners and businesses; business attracted even more people; people and businesses needed land and housing, and in Southern California, Harry Chandler and his cronies had a near monopoly on land. They owned it all. Besides, labor was based on a dangerous set of ideas: redistribution of wealth, and greater public control of land, resources and economic life. Such ideas were toxic to Harry’s business model.

In the early 1900s, Harry Chandler used his newspaper to pull off one of the most brazen water and land grabs in modern history. He mounted a shrill campaign persuading Los Angeles residents that their city was running out of water and then pushed people into supporting a costly bond measure to build an aqueduct from the Sierra Nevada mountains over 200 miles away, only to divert the aqueduct away from the city and into the San Fernando Valley just north of L.A. The diversion made perfect sense to Harry. He headed up a secretive syndicate that included railroad baron Henry Huntington. This syndicate snapped up massive chunks of land in the Valley on the cheap before anyone realized the aqueduct was not going to L.A. Harry and his crew had engineered the scam from the get go. Desert land that had been purchased for $3 million was worth an estimated $120 overnight. The syndicate made a huge pile of money divvying up the land into several towns, building railroads, trams and selling land parcel by parcel to tens of thousands of eager investors and would-be residents.

Best of all, the Owens Valley water transfer was entirely paid for by Los Angeles residents. But, aside from a few pissed off ranchers and farmers in Owens Valley who attempted to dynamite the aqueduct to save their livelihood, no one in Los Angeles made a big fuss over the scam. Not that it would have mattered if anyone had. The whole city, from police to the courts, was sewn up tight. Any real critics were either paid off or quietly disappeared. That’s what Roman Polanski’s movie “Chinatown” was all about.

Not long after pulling off this audacious scheme, Harry Chandler set up another syndicate for yet another speculation project: Tejon Ranch. It was then owned by Edward Beale, a former military man who had turned to real estate scams. He had acquired it from Spanish landowners, who had themselves divested the land from the native Chumash.

The syndicate bought Tejon in 1912, but partners quickly became jittery when they realized Tejon couldn’t be flipped for an instant killing. So, deciding to take the long view on the investment, Henry bought them out.

For the next 85 years, Tejon Ranch allowed the family to live like old school landed aristocrats. It was a long-term real estate investment, but it was also a self-sufficient feudal estate. Its agricultural and mineral wealth provided the family with income, while its vast lands allowed the family to live like lords. The large Chandler family entertained important guests and spent entire summers on the ranch. Boys learned how to shoot and wrangle cattle to get valuable lessons about hard work and rugged individualism.

In 1956, the Chandler’s own Los Angeles Times published a gushing account of the ranch, without mentioning who actually owned it:

“Its vast rich flat farms, brown rolling hills speckled with 453 oil wells and lush mountain meadows stretch 40 air miles north to south, 3 to 30 miles east to west…

“Tejon—one of the largest contiguous ranches in the nation—is bigger than the combined areas of Chicago, Philadelphia, Boston and San Francisco…

“Cotton is king of crops or the ranch. … In 1955 more than 4000 acres of the ranch were in cotton and equal amounts of acreage in potatoes, alfalfa and wheat. More than 20 other crops are grown on the Tejon Ranch.

“During World War II diamond drilling under government supervision disclosed traces on the Tejon of every known mineral mined on the North American continent, including a rare deposit of tin.

“Gold, silver, copper and tin have been mined in the past on the ranch, but in recent years there has not been any commercial activity.”

Otis Chandler, Harry’s grandchild and the guy who would eventually turn the Los Angles Times into a respectable newspaper, described Tejon as a private Eden and “training ground” where he learned how to shoot and kill with a clean shot:

“He had never been much of a history buff, but he did remember that Indians once lived there and that the U.S. Cavalry stationed camel-mounted regiments at Ft. Tejon in the middle of the nineteenth century. The Tejon was a living tapestry where Otis learned to hunt deer with a rifle and, later, a bow and arrow.

“…But there wasn’t always victory, even in his youth. He remembered on occasion an unclean shot at twilight, when he and his father would stalk a deer and Otis’s aim would be off the bead and he would catch it with a bullet to its gut. He knew he’d wounded it deep in its bowels by the scarlet spoor left behind, but the animal was still able to run away.

His father told him to let it go. The deer would eventually lose so much blood that it would have to stop to rest, and it would never move beyond that point. They would find it in the morning, if coyotes or a mountain lion did not find it first. ‘I never slept those nights,’ said Otis, the memory as vivid as childbirth, or war. ‘I always tossed and turned and said, “Can I find him?” And then, “Was he dead?”’”

In retrospect, it’s not clear whether Tejon was such a positive influence in Otis Chandler’s life. In the 1990s, Otis retired from running the Los Angeles Times and went completely crazy trying to recapture his romanticized childhood memories in a frenzied playboy lifestyle induced by a mid-life crisis. He raced professionally, hunted with bow and arrow, tracked polar bears through the Bering Straight and was nearly gored to death by a massive musk ox in Arctic Canada.

The Chandlers didn’t start moving to develop Tejon Ranch until the 1970s. They didn’t hold off out of sentimentality or their connection to the land, but for more prosaic reasons. For one, Southern California’s real estate sprawl hadn’t yet crawled close enough to Tejon to sufficiently boost the value of the land. And two, Tejon Ranch didn’t have enough water. The private reservoirs created by damming up a couple of creeks barely contained enough water to cover Tejon’s agricultural needs, let alone the kind of heavy real estate development they had in mind.

Tejon’s water poverty meant the land was useless for heavy-duty real estate development. Luckily, that all changed in the 1960s, when Governor Pat Brown—daddy to today’s governor Jerry Brown—successfully pushed to build the California Aqueduct, a massive concrete river over 700 miles long that could suck fresh river water from the southern edge of the San Francisco Bay and pump it all the way down to Southern California.

The Chandler family used all of its political clout and media muscle to boost the project. The reason was simple: the aqueduct would traverse the length of Oligarch Valley and run right through the Chandler family’s Tejon estate. The water would enrich all the big landowners in its path with nearly free water—the $3 billion bill would be picked up by California taxpayers. But that’s not how the project was sold to gullible California voters.

Governor Brown and his Oligarch Valley backers launched a campaign to scare Southern Californian suburb dwellers into believing that their water supply was on the verge of being totally exhausted. They sold the California Aqueduct as a way to diversify the over-tapped water supply of urban districts. Of course it was a ruse: “Rather than making its way into the city, state water has been used primarily to open new farmlands… A handful of giant landowners, including the Tejon Ranch … have been the main beneficiaries,” wrote historian Mike Davis in 1992.

“We like to talk of big things in Southern California, just as we like to do big things. Doing things the big way has always been the Southern California way—the big things the Times has helped you do in the past, 9 such as bringing water to the city from the Owens River,” 

Harry Chandler’s son, Norman, wrote in 1959. “And the big things that you will do in the future to solve our smog problem, our water problem, our rubbish and sewer problems. This is going to be the greatest state in the Union. And Los Angeles, we believe, is going to be its greatest city. All of us have to plan on the big scale, as we always have.”

Norman Chandler wasn’t lying. They did like to do things big out here in Southern California. And the aqueduct was theft that was bigger and more brazen than anything that had yet been attempted.

They pulled the same bait-and-switch technique that old Harry Chandler used back in the San Fernando Valley water scam, but now applied on a totally different scale. Instead of duping residents of the still tiny city of Los Angeles, they duped the whole of California, the most populous state in the nation.

The California Aqueduct line running through Chandler’s Tejon property went operational in 1971. It required a giant pumping station to push water up 2,000 feet into the air via an underground pipeline. The station was a huge deal. Even Ronald Reagan, who was finishing up his first term as California governor, took time out from gassing and rounding up college hippies and was on hand to flip the switch.

The aqueduct was central to the viability of Tejon’s real estate potential. A few years after the water started pumping, the Chandlers took the Tejon Ranch company public and began soliciting money from the stock market to fuel development.

Over the next twenty years, the Chandlers repeatedly tapped into real estate bubble hysteria, making money by splitting off blocks of shares to sell to gullible investors who thought Tejon Ranch was going to blow up like the original San Fernando Valley scam. In the mid-1980s bubble, Tejon shares quadrupled from $100 to $400 in the span of two years. Sucker investors buying up overpriced shares from the Chandlers and thinking real estate riches were just around the corner were disappointed when the bubble popped just a few years later and Tejon value dropped to zilch.

When Harry Chandler bought Tejon Ranch, he knew it was gonna make money some day. You just needed to be patient about it. “Never let the Tejon board sell any of the land,” he warned his family 100 years ago. But his offspring were dumber, greedier and less patient than grandpa Harry.

Ever since Harry Chandler’s death, the family had split into two warring camps: Kennedy liberals vs. reactionary John Birchers. The Chandler rightwingers thought the liberals had gone soft, that they longer had their eye on the true purpose of earthly life: to get rich, scam as hard as possible and toil in preparation for ascent to heaven. Instead, the hedonistic liberals were out there enjoying life, carousing with Jews and minorities and concerning themselves with their earthly legacy. In the 1990s, the two groups were in all-out war. And the Birchers began dissolving the secretive Chandler family trusts that had bound the feuding family members together, so that everyone could go their own way. And so in 1997, the family’s controlling stake in Tejon Ranch was sold to a syndicate of private equity and hedge-fund firms.

Tejon’s new owners didn’t waste time. At the foot of the mountain in Oligarch Valley, they built a huge warehouse complex center that now houses IKEA, Caterpillar and Dollar General distribution hubs. Then they immediately began drawing up plans for a gargantuan, multi-tiered real estate development project that included tens of thousands of McTractHomes, countless apartment and condo units, business parks, strip malls, hotels, resorts and spas. At the high end, Tejon Ranch would include a development of luxury McRanches that had access to equestrian facilities, hunting, golf, you name it.

Here’s how Tejon Ranch Company annual report described their plans: 

“The Centennial development is a large master-planned community development encompassing approximately 11,000 acres of our land within Los Angeles County.

Upon completion of Centennial, it is estimated that the community will include approximately 23,000 homes. The community will also incorporate business districts, schools, retail and entertainment centers, medical facilities and other commercial office and light industrial businesses that, when complete, would create a substantial number of jobs. … In addition to the Centennial community project, we are currently engaged in the development of [Tejon Mountain Village]. TMV is envisioned as an exclusive, very low-density, resort-based community that will provide owners and guests with a wide variety of recreational opportunities, lodging and spa facilities, world-class golf facilities.”

This is a serious endeavor—“among the largest housing tracts in California history,” the New York Times has called it. And Tejon’s new owners will need to secure a serious supply of water to get it built.

California law requires that every large real estate development must have a secure water supply that will be available decades into the future. And so the new owners of Tejon Ranch went on a water shopping spree. Not physical water, mind you. They’re out looking for what’s known as “paper water”: essentially a contract to guarantee delivery of the water sometime in the future in order to satisfy planning regulations. I’ll get back to paper water shortly… 

A major part of Tejon Ranch’s paper water came courtesy of 19th century California cattle magnate named Henry Miller, whose water rights were passed down his family from one generation to the next. These hereditary water rights aren’t restricted to Tejon, but keep popping up in real estate developments all across the state. At the height of the last real estate bubble, Miller’s 100-year-old water backed a massive real estate project in the San Fernando Valley just south of Tejon. The development crashed and burned, but not before it attracted $1 billion from California’s public employees pension fund as a major investor in the scheme. It was perhaps the single worst—and potentially most criminal—investment in the fund’s history.

But still Tejon Ranch continues to move closer and closer to realizing its ultimate destiny, a destiny predicted by Harry Chandler 100 years ago. But even if it clears all the government red tape tomorrow, its owners still have to wait for the next real estate bubble to come along. Until then, Tejon will keep doing what it knows best: providing a comfortable space for rich assholes to kill magnificent beasts and go home with stuffed trophies:

“A trophy elk hunt on Tejon Ranch is highly prized by hunters throughout the country. This guided hunt guarantees you the opportunity to take a Rocky Mountain bull elk with a gross Boone & Crockett score of 350” or greater.”

The rest of us will have to make do with a Frappuccino at Tejon’s megastripmall down the hill on the edge of Oligarch Valley, soon to be the site of a Tejon Ranch premium outlets center.

NEXT: Pt 3: Septic Tank (Exit 244)

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Editor's Note: This article also appears in NSFWCORP: A Long Fucking Story, an oral history of NSFWCORP including interviews with former writers and previously out of print long-form features.