On the remainder of the Union site, he added two buildings containing 13 rental units. (Beneath one of the buildings is a garage in which Segal houses his collection of classic cars, including a fleet of Porsches, plus the Toyota Prius he uses most days.) Typically for Segal, the apartment blocks have no hallways, elevators, or underground parking—all of which he finds dehumanizing.
Instead, the buildings open directly onto public spaces that are landscaped with drought-tolerant vegetation. Photovoltaic panels on the buildings' roofs supply most of their electricity. Cross-ventilation— designed into every one of the apartments—eliminates the need for air conditioning.
“I'm not a tree hugger by any means,” Segal insists, but good design is good business. Low utility bills make his apartments a bargain, the architect claims. As a result, tenants stay longer, which reduces wear and tear and increases his income. In his view, an outside management company would be an unnecessary middleman, so Segal entrusts the management of the properties to Wendy (adding, “I have cleaned out clogged pipes myself”).
Segal was born in South Carolina and raised in Manhattan Beach, Calif., and got his architecture degree at the University of Idaho. After school he went to work for Homer Delawie, an important midcentury modernist, and for Antoine Predock, who was then designing an auditorium at the University of California, San Diego.
In 1988, Segal and his wife were living in a one-bedroom loft unit on the edge of downtown. Their landlord's mother owned an oddly shaped piece of property across the street, but she had no money to develop it.
Segal arranged to buy the property for $5,000 down, with the closing six months in the future. In that time, he raised half a million dollars to complete the acquisition and build seven condos. Within a year, he says, he had paid back the investors and made a significant profit.
So he quit his job with Predock and went off on his own, with Wendy as his partner. On his next project, he made two mistakes, he says: It was a condo building—“we're lucky we didn't get sued”—and he used a general contractor. “That's when I realized that the GC is just another middleman you have to get rid of,” he says. “You want the money to actually go to the project, not into everyone else's pockets.”
Segal also discovered the tax advantages of building rental units. “You get rental income; the government lets you take depreciation. At the end of the year, your expenses and your income zero out. That means you don't pay a lot of taxes. And if you manage it right, you're building equity. Then, if you sell the buildings, you pay taxes on capital gains—not ordinary income.” Capital gains are taxed at lower rates than normal income.
That means the Segals got to keep much of the $45 million from their recent sale (though they did have mortgages to retire). The couple lives in a dramatic house that Segal designed in La Jolla. They also have a summer home, in Idaho, built by Segal and his staff during a recent lull between large projects.
Now he is preparing to build the Q, which, if all goes well, will contain a duplex apartment for him and his family above 35,000 square feet of office space. The building may not have a fin next to the entry, but, with its concrete walls and large expanses of glass, it will make a striking addition to the San Diego streetscape.
By serving as your own client, Segal says, “You're doing your own architecture, you're teaching others by example, and you're hopefully doing great things for the city.”
All that, and you're making money.