When the Longboat Key Club and Resort’s public hearing began last Friday, Jan. 8, in the sanctuary of Temple Beth Israel, there was a certain déjà vu. The scene flashed back to the previous months when the Longboat Key Planning and Zoning Board held similar hearings.
This time, though, the faces on the dais were different. They were those of the Longboat Key town commissioners. But even they had a sameness that resembled the gathering last month.
One man on the scene was clearly different. And on this day, he would be the star and key witness: Joseph Lesser, chairman and chief executive officer of New York City-based Loeb Partners Realty and general partner of Key Club Associates, the groups that own the Longboat Key Club and Resort.
Until this day, Lesser had been a mystery to Longboat Key’s Town Hall hierarchy. None of the town commissioners had ever met him.
In reputation, he was a Wizard of Oz (that is, before Toto pulled back the curtain). For the past 17 years his company has owned the Key Club, Lesser has been known here only via second- and third-hand reports as a tough, aging, powerful money mogul who oversees a vast domain of American real estate — 32 projects in all that encompass more than 15 million square feet of offices and shopping centers in 10 states. Over the past 40 years as the head of Loeb Partners Realty, Lesser has led the company in the acquisition, financing, management and leasing of more than $3 billion of real estate investments.
His wizard-like image belies his persona.
Lesser, 81, couldn’t tip the scales at 150 pounds fully dressed. He’s 5 feet 7 inches tall. When he talks, it helps to be close by to hear him. He’s quick-witted. When Lesser took the microphone to address the Longboat Key Town Commission Friday, his first words melted tensions and brought a roar of laughter:
“I actually came down here to find out who Mr. Green is,” Lesser said, referring to online pundit and Key Club gadfly Al Green. “He has been sending me a lot of e-mails, and I was wondering if I could answer and address some of his half-truths and misstated facts that he puts in his columns while I was here on Longboat Key.”
To be sure, Lesser is not a New Yorker, not the pushy business stereotype. Far from it. Lesser was reared in tiny little-known Mitchell, S.D. True to his small-town roots, he avoids the Big City spotlight. A good day is working at Loeb’s 23rd-floor headquarters on Fifth Avenue, two blocks from Grand Central Station, and then going home to read American history.
Perhaps Lesser’s closest claim to South Dakota fame is that his older brother was classmates with the late Joe Robbie, former owner of the Miami Dolphins, and failed presidential candidate, Democrat George McGovern.
One of seven boys in a family of nine children, Lesser earned his bachelor’s and law degrees at the University of South Dakota. In 1968, in his early 40s, he became chief executive of the real-estate arm of what was then New York-based Loeb Rhoades & Co. As Loeb Rhoades later became Shearson Loeb Rhoades and Shearson/American Express, Lesser’s unit remained intact and was spun off as Loeb Partners Realty.
“I’m a businessman,” Lesser said. “My function is to invest in real-estate properties in the U.S. to make a profit for our clients.”
Lesser was seated with his associates Michael Brody, president of Loeb Partners Realty, and Michael Welly, general manager of the Longboat Key Club and Resort, late Friday afternoon at a table at the Key Club’s Sands Point Restaurant. He agreed to an interview with The Longboat Observer:
How was your first close encounter with the Longboat Key Town Commission?
“I thought they asked excellent questions,” Lesser said. “It’s an intelligent bunch.” Lesser said unlike other city councils before which he has appeared, Longboat’s commission members appeared not to have made up their minds already.
“Of all of those we have been in front of, this one we were in front of today was the best.”
What are the business reasons to do this project?
“In the Longboat Key Club we’ve had an outstanding investment that is showing a bit of age,” Lesser said. “We have plowed all of our profits back into it, but it needs a capital investment.
“We hope to improve the existing facility and upscale it to one of the best destination restorts in the country and the world.”
Added Brody: “It’s about staying fresh and modern.”
Why this scale?
“It’s based on a proforma of what we believe will produce an economic return,” Lesser said.
“We scaled it back as much as we could and still make it self-sufficient. You need to have something to subsume the costs that produce no revenue. The amenities don’t produce a dime of cash flow.”
Your skeptics say you’ll never spend $400 million and that can’t possibly get the financing.
“Whether it will be $400 million or slightly less or more, we don’t know yet,’ Lesser said. “Tell us what we can do, and we’ll know what we have.
“As for financing, we may not get it. But it won’t be for lack of trying. We have as good a chance as anyone in America.”
Your skeptics say we don’t need more condos. Just build the hotel.
“As I understand the economics, if we don’t build the condos, we can’t build the five-star hotel,” Lesser said.
Many people have said they would like to see the Key Club and Islandside Property Owners Coalition “come to the table” and negotiate a compromise that would keep the two sides out of court. Your comments?
“We would love to make an arrangement, but it has to make sense for us,” Lesser said. “There’s no animosity here. We just want to run a business and be a good neighbor.”
Added Brody: “But it’s unclear to us — what exactly do they want? They say they’re worried about traffic from the hotel, but then they want us to guarantee that we’ll build the hotel, which will generate traffic.”
We heard one commissioner wants to propose that he would support your project in exchange for $6 million to $10 million in cash to build a new Longboat Key community center. Your comment?
“We have already given certain concessions,” Lesser said. “We would not be prepared to go to that level. We don’t want penalties. Good gosh, we’ve already spent $4 million to get to this point.”
Added Welly: “On top of the $5 million already spent on Phase One, the Tennis Gardens.” Welly also added: “In most communities in this country now, they’d be offering us that money in tax breaks and concessions just to get this project.”
Another comment that is heard is that Loeb is not a developer and is only going through this process to get the entitlements, and then it’s going to sell the club and resort. Comments?
“We have no such intentions of doing that,” Lesser said. “If we wanted to do that, we would have done that a long time ago.
Every CEO has a list of priorities that need management’s attention. Where does this one fit on that list vis-a-vis your company’s other investments?
“This one has one of the highest priorities,” Lesser said. “From a time commitment, this asset has the biggest commitment of time from senior management. I’m impressed Michael (Welly) has amassed one of the finest teams of experts I’ve ever seen.”
Every CEO is also always weighing risk-return and aggravation factor versus return. And at some point, there comes a time when the CEO says, “Enough. Move on.” Where are you on that spectrum?
“We’ve talked about it,” Lesser said. “But we’re going to see this through to the end of this process.”
Added Brody: “If we’re unsuccessful, we’re going to have to re-examine our commitment to reinvesting 100% of our profits. That’s not an ultimatum. We’ll just have to re-examine our priorities.”
What are your thoughts if the project is approved, only to be followed by a lawsuit attempting to block it?
“It’s a free country,” Brody said. “But we will vigorously defend our rights.”
Added Lesser: “Vigorously.”
If you were standing in front of the members of IPOC, what would you say to them that you would want them to consider?
“I’d ask them to try to think reasonably what is best for Longboat Key.”
Brody: “I’d like them to remember that they wouldn’t be living where they live today if they didn’t get amendments to the Outline Development Plan. We’re asking for the same treatment.
Last question: If your project is approved, would you be interested in buying the Colony Beach & Tennis Resort?
Lesser: “I don’t want to go into that.”
Click here to download Key Club and Loeb Realty Group ownership information.