The recent death of Zilber Ltd. founder Joseph Zilber will result in the transfer of ownership of the Milwaukee-based real estate company to Zilber Family Foundation Inc.
Going forward, a portion of the companyโs profits will be re-invested into the company, and the rest will go to the foundation.
โAs the company makes money, the beneficiary is the foundation,โ said Zilber Ltd. chief executive officer James Borris.
The foundationโs primary focus is the Zilber Neighborhood Initiative, a project that Zilber started a few years ago with a $50 million contribution to improve low income Milwaukee neighborhoods.
โOne of the legacies that Joe Zilber has left is a really clear articulated intent for the foundation,โ said Susan Lloyd, executive director of the foundation. โJoe was very passionate that the resources of the foundation should be invested in rebuilding the cityโs neighborhoods.โ
The foundation will not be involved in running the company. An operating trust with its own board of directors now serves as the board of directors for Zilber Ltd. The companyโs top managers report to the operating trustโs board, said Mike Mervis, who was Zilberโs assistant and is a member of the Zilber Family Foundation board.
โThe foundationโs role is to trust the people Joe put in place to run the company and let them do what they do best,โ Mervis said. โThe foundationโs role is to do the things the foundation wants to do, the Zilber Neighborhood Initiative and other things in Milwaukee, and trust the executives to run the company.โ
The senior managers of Zilber Ltd. will continue to operate the company on a day-to-day basis. The group consists of Borris, chief financial officer and executive vice president Robert Braun and executive vice president John Kersey.
For the companyโs senior managers, business will continue โas usual,โ Borris said.
โWe are still a developer and an owner and a manager of properties,โ he said. โAll of the things we did before we continue to do now.โ
Mervis, a vice president of Zilber Ltd., said his role with the company will not change very much, even though he served as Zilberโs assistant.
โMy role will continue to be to ask the question, โWhat would Joe do?'โ Mervis said. โIโm one of the old men of the company. In the time I have left to work here, my role is going to be what it was for the last couple of years, to assist Joe in accomplishing the goals he had for the company.โ
Mervis spoke at Zilberโs funeral and emotionally described Zilber as a father figure and his best friend.
โMy role (with the company) wonโt change much, I just wonโt have my friend to talk to,โ Mervis said. โI talked to Joe every day, with some exceptions, for the last 15 years.โ
Shortly after Zilber passed away in March, the companyโs managers watched a tape that Zilber had prepared about two years ago for the occassion. On the tape, Zilber told his companyโs managers to work together and stay focused on the companyโs objectives.
Borris said Zilberโs message was โuplifting, inspiring,โ but also was difficult to watch as the managers dealt with the sadness of their leaderโs death.
โIt was bittersweet,โ Mervis said. โIt was vintage Joe Zilber, straight and to the point.โ
Zilber spent most of his time in his later years at his home in Hawaii. He had frequent teleconferences with his managers. The tape was similar to one of those teleconferences, Braun said.
โJoe was talking to us, but this time we couldnโt ask any questions,โ he said.
The companyโs senior managers have all worked for Zilber Ltd. for several years. They all say they have learned a lot from Zilber and that their management of the company will change little now that he has passed away.
โAll of the senior executives have been here a long time,โ Borris said. โThereโs a little bit of Joe in each one of us.โ
Zilber was a conservative businessman, but he was willing to take risks when he felt the opportunity was right, Braun said.
โJoe could take bigger risks than we are able to take,โ he said. โWe probably wonโt be quite as aggressive as Joe might have been.โ
The companyโs senior managers will have to get used to making decision without Zilberโs probing questions. Zilber carefully examined all angles of each business deal and challenged his managers to make sure they had planned for every contingency, the companyโs executives say.
โJoe loved to talk about the deals,โ Kersey said. โHe was probing, like a prosecutor.โ
โJoe loved to be the contrarian,โ Borris said. โHe tested his management team and made sure all of the alternatives were explored.โ
Several of the companyโs 250 employees have worked there for decades, a testament to Zilberโs commitment to them. The companyโs senior managers say they will continue with that philosophy.
โHe cared about his employees as if they were his extended family,โ Borris said. โWe feel thatโs the way his company should be run.โ
The Zilber executives are also trying to guide the company through the aftermath of the Great Recession, which has had a devastating impact on the real estate market, but has also created some significant business opportunities.
Commercial real estate, especially properties in good locations, can be acquired for attractive prices, the executives said.
โIf you are a disciplined, well financed real estate company there are opportunities out there for you,โ Kersey said. โThatโs the position we find ourselves in.โ
In recent years, Zilber Ltd. has focused its commercial real estate activity primarily on the industrial market, which has avoided steeper downturns to the office and retail markets.
โWeโve really weathered the storm quite well on the commercial side,โ Borris said.
The company is proceeding with caution in the residential market, Borris said.
โOn residential, we feel weโve bottomed,โ Borris said. โThere are pieces of the puzzle that are starting to come together for the recovery, but itโs going to take time.โ
For years, the company has been active with residential real estate development in many of the warm weather markets that had the biggest bubbles prior to the Great Recession.
โWeโve tried to take advantage of the stress in some of those regions by acquiring some property at really low prices,โ Borris said.
The company also is continuing its work on Zilberโs legacy project, the redevelopment of the former Pabst brewery in downtown Milwaukee into a mixed-use urban neighborhood. Portions of that project have been completed, but several buildings still have not been redeveloped.
โJoe Zilber was able to see The Brewery come alive,โ Kersey said. โThat is very gratifying for us. But, there is still a lot of work to be done.โ
Zilber wanted his company to go on indefinitely and the senior managers say they are committed to keep the company growing and prospering well into the future.
โEveryone is guardedly optimistic about the future (of the company),โ Mervis said. โWeโre all keepers of the flame. Thatโs an awfully big responsibility.โ n