Family tree spawns construction company with deep community roots

Family tree spawns construction company with deep community roots

 

What bank wouldn’t want to lend to the Ratner family and the renowned, multibillion-dollar real estate empire it built, Forest City Realty Trust, Inc.? It seems a crazy question, but the Ratners were far from a sure thing when they first went to banks looking for loans.

What bank wouldn’t want to lend to the Ratner family and the renowned, multibillion-dollar real estate empire it built, Forest City Realty Trust, Inc.? It seems a crazy question, but the Ratners were far from a sure thing when they first went to banks looking for loans.

Albert Ratner, a second-generation leader of the family business who served as CEO of Forest City Realty Trust, Inc. from 1975 to 1995, said, “Life is storytelling, and my father and uncle were great storytellers. So I feel like I was there in the beginning even though I wasn’t born yet. I knew the whole history, used to hang around the office when I was 8 or 10 years old, I would go up with my father on the ladder, and it was always exciting. It’s always been a great business.”

The Forest City history starts in the early 1920s, when the family was still only a few years off the boat from Bialystock, Poland, via Ellis Island.1 Like many other Jewish immigrants during this period, the Ratners were escaping pogroms in Europe and seeking freedom and opportunity in America.

Albert’s uncle Charles Ratner came to America at age 13 and initially made his living singing on New York City street corners. After serving as an Army captain, he settled in Cleveland and established Forest City Lumberyard in 1920; he focused on selling garages for the burgeoning automobile industry in the community. Not every bank’s idea of “community” extended to Ohio’s Jewish or other ethnic communities at the time, however and language barriers could be problematic.

Charles’ younger brother Leonard, Albert’s father, had immigrated in 1920, and first found success in the creamery business. With the garage business booming, however, Leonard sold his creamery interests, hoping to join his brother.

Around 1923, when he needed capital to launch his own lumber business, Leonard sought his existing bank’s help.

But a banker apparently said, “You’ll never be able to sell garages with that accent. People will never buy from you,” and denied the loan.

So, Leonard went across the street to Union Trust, one of the nation’s largest trust companies during the early 1920s.2 When Leonard entered the grand banking lobby on East Ninth Street and Euclid Avenue, he was introduced to a banker known as “Sanders,” whose first name has been lost but surname is core to Ratner family lore.

“My father sat down with Sanders and told him his story. Sanders looked at my father and said, ‘You’ve been in the country how long? And you’ve done this well? That’s remarkable! I’ll be happy to make the loan to you.’”

Leonard’s Buckeye Lumber was founded in 1924, while Charles moved to Florida and helped build The Clevelander, one of the first grand hotels of Miami’s South Beach area.3 Brother Max and sister Fannye joined the lumber business and in 1929 combined the two businesses under the Forest City Material name.

As the country entered the Great Depression, Leonard continued working with Union Trust. Albert said, “One day my grandfather came home from the synagogue, which was the font of all information, and said to my father, ‘The word is, in the community, that they’re going to close the Union Trust Co. Leonard, you have to go to the bank and take your money out or you’ll lose it.’

“So my father went to the bank, and there was a very long line. He got in line and finally got to the window. And who do you think was at the window? Sanders. My father said to him, ‘I’m here just to tell you that we have every confidence in you and you’re going to be fine.’” The next day, Union Trust didn’t open, and Leonard never saw that money.

A few years later, Leonard bumped into the banker who’d rejected his loan application.

“Leonard, you’re such a big shot and you went to Union Trust, so how much money did you lose?” the banker asked.

“I know what I lost with them,” said Leonard, “but you have no idea how much I still have because they were the ones who put me into the lumber business.”

During the 1930s, Forest City expanded into building modest homes and bought its first apartment building. In 1941, Forest City was among the first companies in America to manufacture prefabricated housing.4 The company grew rapidly after World War II, both in its retail chain of home improvement stores, launched in 1955 and later spun off and in developing real estate projects, including suburban shopping centers. In 1960, the family-run company reorganized as Forest City Realty Trust, Inc. and offered stock to the public.5

Albert Ratner joined the family business in 1951 and during that period they began talking to a banker named George Herzog at Cleveland’s Union Commerce Bank, which was formed in 1938 and moved into the old Union Trust building. “He reminds me of Sanders,” Leonard told his son then. “I want you to get in the car with me and come downtown and meet him. We have to start doing business with them.”

“My father is a fiercely loyal person,” Albert said, and “he credited his success to the fact that he was able to get that loan.”

Besides serving Forest City, George Herzog had helped administer the Van Sweringen railroad estate, and helped Art Modell buy the National Football League’s Cleveland Browns. “George was such a terrific fellow that we put him on our board of directors,” Albert said. “He was the smartest banker I ever met in my life.”6 Even after Huntington’s takeover of Union Commerce Bank in 1982, the Ratners felt a consistency of service; Tim Treadway succeeded Herzog and took a seat on Forest City’s board.

Over subsequent decades, Forest City engaged in marquee urban development projects coast to coast, including the revitalization of Cleveland’s Tower City Center in the late 1980s and early 1990s and the redevelopment of Denver’s Stapleton Airport in 1998. In 2007, the company celebrated the opening of the cornerstone of its Times Square redevelopment project, The New York Times headquarters building, designed by architect Renzo Piano.7

Forest City no longer has a Ratner in command — third-generation Charles A. Ratner ceded the CEO post to David LaRue in 2011.8 But the company continues to invest in the kind of communities where it got its start. And it has Huntington Bank at its side.

Huntington Bank is the lead lender on a mixed-use Forest City development in East Baltimore, at 1812 Ashland Ave., which includes life sciences laboratory and office space for Johns Hopkins University along with storefront retail space. Forest City has its choice of banking partners for the project that is scheduled to open in 2016, but John Lecker, vice president of development for Forest City-New East Baltimore Partnership, said Huntington’s commitment to community banking made it the preferred choice.

“Huntington Bank understands the meaning of community, community revitalization, and the benefit strong public/private partnerships have on job growth and economic sustainability,” he said.9

As Forest City approaches its centennial anniversary, the story continues.

Copy of Terminal-Tower-Forest_City

Forest City revitalized Cleveland’s Terminal Tower at Tower City Center in the late 1980s and early 1990s. Credit: Forest City Realty Trust, Inc.