Harvey Capital Backs Bulldog Investors in Tejon Ranch Proxy Battle: A Clash of Vision and Value

The proxy contest at Tejon Ranch Co. (NYSE: TRC) has become a high-stakes showdown between activist investors Bulldog Investors and the company’s entrenched board, with Harvey Capital rallying support for Bulldog’s slate of director nominees. The outcome could reshape the future of one of California’s largest private landowners, which controls 270,000 acres of prime real estate.

Bulldog’s Case: Urgency vs. Expertise

Harvey Capital, holding 5,531 shares of Tejon, argues that the board’s decades-long tenure has failed to deliver meaningful shareholder returns. The firm urges investors to vote FOR Bulldog’s nominees—Phillip Goldstein, Andrew Dakos, and Aaron Morris—on the premise that a leadership overhaul is needed to unlock value. Bulldog’s push centers on halting investments in long-term, entitlement-heavy projects like the Centennial housing development, which they argue are overambitious and underfunded.

However, critics highlight glaring gaps in Bulldog’s strategy. Two of their nominees are Bulldog employees, raising concerns about independence. Goldstein and Dakos lack expertise in real estate development or California land-use regulations, while Morris, Bulldog’s litigation counsel, has been tied to high-profile legal battles. Tejon’s board, by contrast, includes executives like Gregory S. Bielli (35 years in California real estate) and Matt Walker (24 years in master-planned communities), whose experience aligns with the company’s complex development projects.

Tejon’s Defense: Patience Pays Off

Tejon’s financial performance in 2024 underscores its argument for continuity. Fourth-quarter results showed 15% revenue growth to $21.6 million, 186% net income growth to $4.5 million, and 116% EBITDA growth to $10.5 million. Its flagship Tejon Ranch Commerce Center (TRCC) operates at near-full occupancy (100% industrial, 96% commercial), generating steady cash flow.

The company’s long-term strategy hinges on entitlements—securing regulatory approvals for projects like Centennial, which aims to address California’s housing shortage. These processes, while time-consuming and capital-intensive, have already yielded $110 million in cumulative cash flow from TRCC alone. Tejon warns that Bulldog’s short-term focus could jeopardize relationships with regulators and stakeholders built over decades.

The Risks of Bulldog’s Approach

Bulldog’s history raises red flags. Its nominees’ affiliated funds, such as the Special Opportunities Fund, consistently trade at discounts to net asset value (up to 26.3% as of April 2025), suggesting poor performance. Phillip Goldstein even admitted Bulldog’s 2017 campaign at Emergent Capital was its “worst activist effort.”

Legally, Bulldog has relied on litigation to advance its goals, including suing to block shareholder “clawbacks” in SPAC cases. While aggressive, this tactic risks destabilizing Tejon’s operations. For instance, Centennial’s approvals took years to secure; halting progress could strand millions in sunk costs and alienate local communities.

Shareholder Considerations

Voting is due by May 13, 2025, with shares needing to be owned by March 17. Tejon shareholders must decide whether to back Bulldog’s “quick win” philosophy or trust the board’s track record. Institutional activity hints at skepticism: FMR LLC (Fidelity) exited entirely, while Vanguard and State Street trimmed holdings.

Conclusion: A Vote for the Long Game?

Tejon’s financials and strategic execution argue for caution. Its Q4 results, TRCC’s occupancy, and the $180 million annual housing gap in California emphasize the need for patient capital. Bulldog’s nominees, while offering change, lack the expertise to navigate entitlements or replace Tejon’s leadership’s relationships.

Harvey Capital’s push may appeal to investors seeking disruption, but the data favors Tejon’s board. A 15% revenue rise and $10.5 million EBITDA suggest the current strategy is working. For shareholders, voting WITHHOLD for Bulldog’s nominees and FOR Tejon’s slate could preserve the gains that decades of entitlement-building have finally unlocked.

As the proxy battle enters its final weeks, the question remains: Will investors prioritize a proven path to growth or gamble on an activist’s gamble? The answer could define Tejon Ranch’s value for years to come.