He doesn't sit on lots of corporate boards, his name isn't on a lot ofbuildings, and he isn't the first guy local charities run to when they need abig donor to swing a project.
Even though real estate magnate Sam Zell isn't one of corporate Chicago'sinner circle, some business and civic leaders say they have a positiveimpression of the real estate investor who struck a deal Sunday night to buyTribune Co. They not only respect his business acumen, they believe he couldbe the right guy to shake up Tribune Co. and get the media conglomerate backon a growth trajectory.
"He is a genius business person. If the fundamental issues facing theTribune are business issues, I'd rather have a business genius in charge thansomebody else," said Paul O'Connor, executive director of World BusinessChicago, a non-profit economic development organization.
Added long-time Zell watcher and Chicago investment manager Marshall Front:"He will try to give Tribune Co. the right focus. When he sits down withTribune managers, he will ask some very deep, fundamental questions. And theanswers had better be solid, or heads will roll, and it will not be pleasant."
Zell emerged as a surprise last-minute contender for Tribune Co., an $8billion national media conglomerate that owns newspapers and TV stationsaround the country. Tribune Co. has long been a mainstay of the Chicagocorporate fabric, and its presence is highly visible here in the form of theChicago Tribune, WGN-Ch. 9, WGN radio and the Chicago Cubs, which Tribune Co.now plans to sell.
Zell's local roots play in his favor, especially in a city such as Chicagowhere its biggest bank is now headquartered in New York and the hometowndepartment store has been renamed Macy's, civic leaders say. Zell grew up inChicago and returned here to build his estimated $5.5 billion fortune, whichhas run the gamut from commercial real estate to shipping containers tobicycles.
"He's a local and recognizes the Tribune as a local icon with deep Chicagoroots from Colonel McCormick to McCormick Place," said Jerry Cizek, presidentof the Chicago Automobile Trade Association, which represents more than 500area auto dealers. "He isn't going to change the name to Zell Tower."
There's certainly an element of coastal rivalry in Chicagoans' support forZell.
The other billionaires who bid on the company -- Ron Burkle and Eli Broad-- are from Los Angeles, and they let it be known they considered Tribune Co.a bit too parochial to be the steward of the Los Angeles Times.
"I wouldn't want the L.A. guys to get it," said Jim Loewenberg, co-chiefexecutive of real estate developer Magellan Development Group LLC. "It'simportant to have a local interest involved."
Zell has long prided himself on his outsider status. He is better known forhosting lavish birthday parties for himself than heading big fundraisingdinners for prominent charities.
But he has stepped up from time to time in ways that city leaders havefound encouraging.
When Boeing Co. was shopping for a new headquarters city, for instance,Zell took it upon himself to write a letter to then-Boeing chief Phil Condit,saying Chicago would be a better location than Seattle, the aerospace giant'slongtime home.
"If you're wondering why I'm qualified to say that," Zell wrote, "I am theNo. 1 holder of downtown real estate in Seattle."
"It was brilliant and crisp," said O'Connor, who received a copy of theletter because his organization coordinated Chicago's bid for Boeing. "He wasnot going to gain directly. He just stepped up to the plate."
Similarly, Zell was one of a half-dozen prominent businessmen whovolunteered to be on a panel to advise former Illinois Gov. George Ryan oneconomic development issues.
Laurence Msall, president of the Chicago's Civic Federation, got to knowZell through the committee and found him a "very effective advocate for therole of the entrepreneurial spirit in Chicago and the importance of havingrational tax policies."
Even though the committee was made up of heavy hitters such as ChicagoFederal Reserve President Michael Moskow, Zell didn't bow to convention.
"He certainly didn't wear a suit and tie," Msall recalled. "He dressedcasually before business casual was commonplace."
Zell also has been a big supporter of academic institutions, including theUniversity of Michigan, where he was an undergraduate and attended law school.He also has endowed the Samuel Zell/Robert Lurie Real Estate Center at theUniversity of Pennsylvania's Wharton School.
When Chicago business chiefs talk about Zell, they mostly talk about hisphenomenal success in scooping up undervalued assets and holding them untilmarket sentiment turns. But some are worried that his success with hard assetssuch as office towers may not translate to a people-oriented business such asputting out a newspaper or broadcasting the evening news.
"Media properties are in the same category as investment banks, a moviestudio or a television network, where the frustration of an owner is thatanything other than a light touch will destroy the value of what is acquired,"said Joe Starshak of Starshak Winzenburg, a Chicago-based private investmentbank.
"It will be an interesting challenge seeing whether he can manage ahuman-capital business as well as he managed his real estate business."
Others are concerned that Zell may not be in it for the long haul. He maylook at the Tribune as an investment he can clean up and sell off in pieces tomake a profit, said Mike Mulica, chief executive of BridgePort Networks, aChicago-based wireless phone software company.
"Zell's ownership will be transitional, I suspect," Mulica said. "I thinkthe notion that it landed in local hands is temporary and not good news forChicago."
James Schrager, a professor of entrepreneurship and strategy at theUniversity of Chicago Graduate School of Business, believes Tribune has comealong at a perfect time for Zell, just as he is finishing up the $39 billionsale of Equity Office Properties Trust.
"I think he sees it as a cheap asset. I think he sees it as fun. I think hesees it as a wonderful soapbox for whatever he wants to promote," Schragersaid. "I'm not sure he really understands the difference between real estateand running a business. But he is a very quick learner and a bright guy. Itwould be hard for me to imagine that he won't get up to speed really fast."
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