MINTO NO LONGER ALL IN THE FAM­ILY

Roger Green­berg and new CEO Michael Waters talk to James Bag­nall about the tran­si­tion

Ottawa Citizen - - FRONT PAGE - JAMES BAG­NALL

Roger Green­berg never made any se­cret of his de­sire not to die in har­ness. He was just 35 when he was thrust into the role of pres­i­dent of Minto — the real es­tate com­pany founded by his fa­ther, Gil­bert, and mul­ti­ple un­cles. The year was 1991. Canada was in the throes of an eco­nomic re­ces­sion, and Un­cle Irv­ing — one of the last of the first gen­er­a­tion of Green­bergs — had, like other mem­bers of the fam­ily, suf­fered a fa­tal heart at­tack.

“There was no suc­ces­sion plan,” Roger re­calls, “Boom. I was made pres­i­dent. I had no train­ing, no busi­ness plan, noth­ing.”

Lit­tle won­der then, that he de­voted so much ef­fort to mak­ing sure his own suc­ces­sion plan was not only timely, but rock solid.

This month, Michael Waters — a 42-year-old na­tive of Kam­loops, B.C., with no fam­ily con­nec­tion to the Green­bergs — took over as chief ex­ec­u­tive of The Minto Group, the first time in the 58-year his­tory of the firm that an out­sider has done so. The story of how and why the Green­bergs picked him says much about the style and the op­pres­sive health his­tory of one of Ot­tawa’s most prom­i­nent fam­i­lies.

The need to se­lect an out­sider was im­posed early on Roger. When he took over from Irv­ing, he told the fam­ily he was pre­pared to lead Minto un­til 2005, when he would be 50. But that tar­get proved too early for a host of rea­sons, so Roger pushed it out to 55.

But even at that age, it was ap­par­ent he would not be able to keep the po­si­tion of pres­i­dent in fam­ily hands. The third gen­er­a­tion of Green­bergs — his chil­dren and those of his sib­lings — was too young for such re­spon­si­bil­ity. Even to­day, the el­dest has yet to turn 30.

Add to this an un­usual fam­ily re­quire­ment: No mem­ber of the third gen­er­a­tion — now 17 strong — can join Minto un­til he or she has earned re­spect else­where. “They must work out­side the fam­ily busi­ness for a num­ber of years and gain a pro­mo­tion out­side, so they have the ex­pe­ri­ence,” says Roger, who re­cently turned 58.

In 2005, the year he had orig­i­nally picked to step aside, Roger turned his at­ten­tion to re­struc­tur­ing the firm to make it more like a pub­lic en­ter­prise.

It was a lengthy process. Even­tu­ally, he col­lapsed five di­vi­sions into three and put non-fam­ily mem­bers in charge of each of them. An­other ma­jor change was to cre­ate a seven-mem­ber board of di­rec­tors, in­clud­ing a ma­jor­ity who could be con­sid­ered in­de­pen­dent of the Green­berg fam­ily.

Roger’s prom­ise to cre­ate such a board was one of the keys to con­vinc­ing Michael Waters to join Minto early in 2007, ini­tially as chief fi­nan­cial of­fi­cer.

“There’s an el­e­ment of un­cer­tainty if you’re join­ing a firm that’s run by just one per­son,” says Waters. “But if you have a board of di­rec­tors in place, it gives you con­fi­dence. And it’s not just an ad­vi­sory board. It’s real, and there are ful­some de­bates.”

The de­ci­sive fac­tor for Waters was Roger’s per­son­al­ity.

“He flew out to Van­cou­ver and ar­rived at our house in a plain Jane ren­tal car,” Waters says. “He con­nected with my kids, my wife, my in-laws. It was more on blind faith based on the con­nec­tion with Roger that I came to Ot­tawa.”

Waters at the time was a se­nior fi­nan­cial ex­ec­u­tive with In­trawest Corp., a va­ca­tions con­glom­er­ate that owned ski re­sorts such as Whistler Black­comb and Mont Trem­blant. Roger’s ap­proach proved timely. It came just a few months af­ter a New York pri­vate eq­uity group, Fortress In­vest­ment Group, had ac­quired In­trawest then ag­gres­sively cut man­age­ment ranks.

“It was nasty, nasty,” says Waters. “I opted to leave of my own vo­li­tion.”

He was ini­tially cool to the idea of mov­ing to Ot­tawa. But the more he thought about the Minto job, the more he liked it. At In­trawest, Waters had been top fi­nan­cial ex­ec­u­tive of a sin­gle divi­sion. At Minto he would have the same re­spon­si­bil­ity across mul­ti­ple di­vi­sions of a siz­able en­ter­prise.

Minto has 1,360 em­ploy­ees, in­clud­ing about 850 in the Ot­tawa area. It also man­ages more than 17,000 ren­tal units in ad­di­tion to more than three mil­lion square feet of com­mer­cial hold­ings. And it main­tains real es­tate in­ter­ests in Toronto, London, Ont., Cal­gary and Florida.

As chief fi­nan­cial of­fi­cer, Waters at­tended meet­ings of the board and other key strat­egy ses­sions.

He also had a su­perb view of an in­dus­try on the verge of a melt­down. Waters joined Minto just a few months be­fore the global real es­tate bub­ble burst.

Nearly three decades ear­lier, Roger’s fa­ther and un­cle had led the ex­pan­sion into Florida real es­tate, which be­came one of the most over­priced mar­kets in the U.S. What saved Minto dur­ing the 2007-8 col­lapse was the in­nate con­ser­vatism of the Green­bergs and the fact that Florida ac­counted for less than 10 per cent of the firm’s hold­ings.

“Peo­ple were un­der­writ­ing deals in Florida with sig­nif­i­cant in­fla­tion built in to the home­build­ing prices,” says Waters. “It was the only way they could make the math work. But Minto had stopped do­ing deals there in the 12 months be­fore I ar­rived. As a re­sult it was not overex­tended”.

The process that made him Minto CEO was some­what “opaque.” What Waters might not have known is that Roger was in­creas­ingly con­vinced by 2009 that Waters had the right stuff. “He’s smarter than me, and he’s bet­ter with peo­ple,” Roger ob­serves. “He’s very pa­tient.”

It took Roger two to three years longer than planned to in­stall non-fam­ily mem­bers at the head of the firm’s three new busi­ness units, which is why the han­dover didn’t take place un­til this month.

“I did not an­tic­i­pate how much work was go­ing to take place,” he says, “and the need not only to tran­si­tion my­self, but my sib­lings and a cou­ple of other long-term Minto em­ploy­ees whose loy­alty was clearly to me and my broth­ers.”

Of course, the Green­bergs still con­trol Minto’s pri­vately held shares. And Roger has cre­ated for him­self the po­si­tion of ex­ec­u­tive chair­man.

“It means Michael and I will part­ner on strat­egy and ma­jor ac­qui­si­tions and dis­po­si­tions,” says Roger. “But day-to-day op­er­a­tions will be 100 per cent the re­spon­si­bil­ity of Michael.”

Given the cir­cum­stances, it’s easy enough to spec­u­late that Waters has been hired to keep the CEO chair oc­cu­pied un­til one mem­ber of the Green­berg’s third gen­er­a­tion is ready to claim it. Roger main­tains that’s the wrong way to read this.

“There’s noth­ing in­terim about Michael’s ap­point­ment,” he says. “He is the CEO.”

Rogers adds that he hopes the next gen­er­a­tion of Green­bergs will be­come ac­tive share­hold­ers in Minto, with per­haps one or two serv­ing on the board.

“If we get re­ally lucky,” he adds, “some of them will want to work in the busi­ness.”

Mean­time, this is Waters’s show. The Whar­ton Univer­sity busi­ness grad talks about de­vel­op­ing the base he’s in­her­ited.

‘He con­nected with my kids, my wife, my in-laws. It was more on blind faith based on the con­nec­tion with Roger that I came to Ot­tawa.’

MICHAEL WATERS New CEO of the Minto Group talk­ing about Roger Green­berg, who con­vinced him to join the com­pany

Minto has been ex­pand­ing, ju­di­ciously, in all its ma­jor mar­kets, con­fi­dent that its di­ver­si­fi­ca­tion in both geog­ra­phy and type of real es­tate prop­erty (ren­tal ver­sus owned) will pro­tect it if the prop­erty mar­ket does take a tum­ble. Last week­end, Minto un­veiled a new eight­story de­vel­op­ment un­der­way in Ot­tawa’s Beech­wood dis­trict. The com­pany is also build­ing con­do­mini­ums as part of the re­de­vel­op­ment of Lans­downe Park.

Roger says he’ll be spend­ing con­sid­er­ably more time in his role as chair­man of the Ot­tawa Sports and En­ter­tain­ment Group, which is lead­ing the de­vel­op­ment of the Lands­downe site with the City of Ot­tawa.

“I don’t call it re­tire­ment,” says Roger, “I call it a tran­si­tion.” As for the con­cern about the fam­ily’s faulty genes, “I want to ex­er­cise a lit­tle bit more. I can’t hide from that.”

Nor did he shrink from the pos­si­bil­ity that the fam­ily’s health curse would visit him. What­ever hap­pens, the Minto Group is in the hands of pro­fes­sion­als.

CHRIS MIKULA/OT­TAWA CIT­I­ZEN

Michael Waters is Minto’s new head. He says it was Roger Green­berg’s ap­proach that con­vinced him to join the firm.

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