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 company’s profits will be re-invested into the company, and the rest will go to the foundation.
“As the company makes money, the beneficiary is the foundation,” said Zilber Ltd. chief executive officer James Borris.
The foundation’s 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.
“One of the legacies that Joe Zilber has left is a really clear articulated intent for the foundation,” said Susan Lloyd, executive director of the foundation. “Joe was very passionate that the resources of the foundation should be invested in rebuilding the city’s neighborhoods.”
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 company’s top managers report to the operating trust’s board, said Mike Mervis, who was Zilber’s assistant and is a member of the Zilber Family Foundation board.
“The foundation’s role is to trust the people Joe put in place to run the company and let them do what they do best,” Mervis said. “The foundation’s 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.”
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 company’s senior managers, business will continue “as usual,” Borris said.
“We are still a developer and an owner and a manager of properties,” he said. “All of the things we did before we continue to do now.”
Mervis, a vice president of Zilber Ltd., said his role with the company will not change very much, even though he served as Zilber’s assistant.
“My role will continue to be to ask the question, ‘What would Joe do?'” Mervis said. “I’m 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.”
Mervis spoke at Zilber’s funeral and emotionally described Zilber as a father figure and his best friend.
“My role (with the company) won’t change much, I just won’t have my friend to talk to,” Mervis said. “I talked to Joe every day, with some exceptions, for the last 15 years.”
Shortly after Zilber passed away in March, the company’s managers watched a tape that Zilber had prepared about two years ago for the occassion. On the tape, Zilber told his company’s managers to work together and stay focused on the company’s objectives.
Borris said Zilber’s message was “uplifting, inspiring,” but also was difficult to watch as the managers dealt with the sadness of their leader’s death.
“It was bittersweet,” Mervis said. “It was vintage Joe Zilber, straight and to the point.”
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.
“Joe was talking to us, but this time we couldn’t ask any questions,” he said.
The company’s 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.
“All of the senior executives have been here a long time,” Borris said. “There’s a little bit of Joe in each one of us.”
Zilber was a conservative businessman, but he was willing to take risks when he felt the opportunity was right, Braun said.
“Joe could take bigger risks than we are able to take,” he said. “We probably won’t be quite as aggressive as Joe might have been.”
The company’s senior managers will have to get used to making decision without Zilber’s 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 company’s executives say.
“Joe loved to talk about the deals,” Kersey said. “He was probing, like a prosecutor.”
“Joe loved to be the contrarian,” Borris said. “He tested his management team and made sure all of the alternatives were explored.”
Several of the company’s 250 employees have worked there for decades, a testament to Zilber’s commitment to them. The company’s senior managers say they will continue with that philosophy.
“He cared about his employees as if they were his extended family,” Borris said. “We feel that’s the way his company should be run.”
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.
“If you are a disciplined, well financed real estate company there are opportunities out there for you,” Kersey said. “That’s the position we find ourselves in.”
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.
“We’ve really weathered the storm quite well on the commercial side,” Borris said.
The company is proceeding with caution in the residential market, Borris said.
“On residential, we feel we’ve bottomed,” Borris said. “There are pieces of the puzzle that are starting to come together for the recovery, but it’s going to take time.”
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.
“We’ve tried to take advantage of the stress in some of those regions by acquiring some property at really low prices,” Borris said.
The company also is continuing its work on Zilber’s 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.
“Joe Zilber was able to see The Brewery come alive,” Kersey said. “That is very gratifying for us. But, there is still a lot of work to be done.”
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.
“Everyone is guardedly optimistic about the future (of the company),” Mervis said. “We’re all keepers of the flame. That’s an awfully big responsibility.” n