Southern Pacific Railroad History Center


Southern Pacific Land Company

On March 1, 1970, Southern Pacific Land Company (SP Land) was organized as a direct subsidiary of Southern Pacific with three operating divisions: Natural Resources, Real Estate, and Industrial Development. The new divisions were created by transferring and restructuring existing corporate operations; Real Estate and Natural Resources formerly reported to Southern Pacific’s  Executive Department, and Industrial Development formerly reported to Southern Pacific’s Freight Traffic Department. The principal purpose of the new structure was to accelerate development of the company’s 3,855,000 acres of timber, agricultural, desert, and grazing lands in California, Nevada, and Utah, as well as its industrial and commercially oriented properties located throughout the Southern Pacific System.

Since an early policy decision was made that SP Land was to function solely as a management and investment company, work was begun to structure a new entity, separate and apart from SP Land to undertake any land development which might entail so-called “dealer” activity.

With this goal in mind, the Southern Pacific Development Company (SP Development) was incorporated on October 30, 1970, as a subsidiary of Southern Pacific.  Capitalized for $25,000,000, consisting of $23,000,000 of real property and $2,000,000 cash, SP Development provided Southern Pacific with a vehicle to accelerate and increase income from real estate projects.  To provide maximum flexibility in real estate development activities, SP Development, within specified limits,. operates as an autonomous subsidiary of the Southern Pacific and is responsible for its own long-term capital resources.

As a further step toward greater participation in real estate initiatives, the Golden Empire Investment Corporation (Golden Empire) was incorporated in November 1970, as a subsidiary of SP Development to participate actively in the fields of development and construction.

While the organizational activities were undertaken prior to the establishment of SP Development. and Golden Empire, an extensive investigation of real estate development and construction companies was undertaken, and the Santa Ana based firm of Birtcher Pacific was selected as an organization well suited for joint ventures with Southern Pacific.

An agreement was reached with Birtcher Pacific to form a general partnership to: (i) develop and improve certain rail-oriented and non-rail industrial properties, as well as commercial and residential properties for either sale or investment and (ii) serve as a general contractor.  The partnership, formed in November 1970, between Golden Empire and Ronald E. and Arthur B. Birtcher, operated under the name of Sequoia Pacific Realco.  The new company was focused on industrial and commercial projects.

In early 1974, another major organization change was made which established Southern Pacific Industrial Development Company (SP Industrial Development). SP Industrial Development acquired ownership of the majority of Southern Pacific’s 38,000 acres of industrial properties and assumed control of similar properties which remained in other corporate ownerships. The company was staffed by transfer of existing personnel from the SP Land’s Industrial Development division. The principal reason for creating SP Industrial Development was to establish a profit center for our industrial real estate activities

The functions for SP Land, SP Industrial Development, SP Development were as follows:

SP Land – Real Estate division is for the management of the company’s real estate holdings on property of Southern Pacific, including office buildings at San Francisco, Los Angeles, and other cities.  (These land holdings are to be distinguished from so-called outlying lands which are under separate jurisdiction of Natural Resources division.)  This responsibility includes leasing, conveying, purchasing, and clearing title of the properties under its jurisdiction. Gross income from rentals of real estate for industrial, commercial and related purposes exceeded $22.7 million in 1976.

SP Land – Natural Resources division is responsible for the management of the greater portion of the 3.8 million acres of outlying lands as well as the mineral rights on an additional 1.3 million acres. Timber management, a major activity, provides for the greatest possible yield while maintaining a sustained yield policy on 467,000 acres of forest lands. The Natural Resources staff, in addition to general property management, markets timber, arranges grazing and agricultural leases, and negotiates the mineral leases on these properties.

SP Industrial Development acquires and develops industrial property for sale to both rail and non-rail industries. SP Industrial Development planning and engineering unit master plans and controls development of Southern Pacific’s  industrial parks from initial feasibility studies through construction of improvements. From the marketing side, SP Industrial Development’s specialists work with industry, private developers, and real estate brokers to expedite the sale of company properties and to secure sites for rail oriented clients on Southern Pacific and privately owned lands. Other major responsibilities include arranging for installation of industrial trackage and management of certain company-owned warehousing and rail-served facilities.

SP Development – In addition to ownership and management of over 4,000 acres of real property, SP Development is active in the development of shopping centers and other commercial projects. Major projects currently underway are the Phase II Livermore, California Arcade Shopping Center, New Orleans Hilton Hotel, and Tiburon, California Downtown Commercial/Residential Development Plan. Other work in the preliminary stage includes a high-rise office building in San Francisco and local shopping centers in Turlock, Fresno, and Tulare, California.



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