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Continued: The Pohlad family: Fortunate sons

  • Article by: DAVID PHELPS , Star Tribune
  • Last update: December 29, 2010 - 6:05 AM

Of all the accomplishments Carl Pohlad's sons have achieved, there's one that will always be out of reach: "Jim, Bill and I can never be self-made," said Bob Pohlad, referring to his father's rise from Depression-era roots to corporate billionaire.

The three brothers, now in their 50s, don't need to be told that they have something special -- a corporate legacy from a father who started with nothing. While they have been a part of the Pohlad business for much of the past three decades, the brothers are leading the distinctly Minnesota business empire into a new era, one that began when their father died less than two years ago.

A simple principle guides them: Succeed or fail, the brothers will do so as one.

"Our dad stressed the importance of sticking together -- no matter what," Bob Pohlad said. "On business issues of consequence, we all must agree."

The Pohlad interests range from car dealerships, real estate ventures and an iconic jewelry store in Minneapolis to finance, radio, motion pictures, and, of course, the Minnesota Twins baseball team. And 2010 was a big year for the Twins. The team just completed its inaugural season in the new Target Field ballpark, a project once loathed by many in the community that is now being embraced as a success.

It was a big year for the Pohlads beyond baseball as well. The Pohlad organization successfully sold its world-leading Pepsi bottling and distribution business for $2.12 billion, and contributed millions in charitable donations to fund jobs and improve living standards for the state's needy.

The brothers say they knew the day would come when they would be running the family businesses without their father. (Their mother, Eloise, died in 2003.) But that doesn't mean the transition has been easy, said Bob Pohlad.

"Dad had always been such a strong presence," he said. "When that ended, we had emotional issues to go through, we had estate issues to go through, we had organizational things to go through. When your parents die, you think you know how life will play out, but you don't."

During such unsettling times, rivalries within family businesses can emerge, leadership can be fractured and goals can be obscured -- especially when a death and vast wealth are involved. (In 2008, Forbes magazine estimated Carl Pohlad's net worth at $3.6 billion.) Friends and associates say the publicity-shy Pohlads won't likely fall into such traps because they complement each other so well.

Jim, long at his dad's side, is considered the visionary. Bob, fresh from running one of the largest Pepsi bottling companies in the country, is the operations guy. Bill, with one foot in Hollywood and one in Minneapolis, is the artistic one.

"Bill is shy but very intuitive," said Boyd Stofer, chief executive of Marquette Real Estate Group, a division of the Pohlad Family Cos. "Bob is more hands-on. Jim adapted Carl's opportunistic manner."

While the Pohlads aren't starting over, they do face uncertainties. The Pohlad businesses have felt the effects of the Great Recession, which was particularly tough on the financial services sector, a prominent Pohlad niche, and commercial real estate.

"The last couple of years have been the most challenging," said Jann Ozzello Wilcox, chief investment officer for the Pohlad organization. "Except for the Twins, every one of the businesses has suffered through this economic downturn."

And that means the brothers have plenty of work to do, Bob Pohlad said, even if they are starting at a different place from their father. "We can take what we've been given and build from that."

No formal titles

You won't find any titles at the top of the Pohlad organization. But Jim Pohlad, 57, still carries one -- "big brother."

"Jim has always been the leader -- though he would probably dispute that," Bill Pohlad. "He wouldn't ever throw his weight around, so to speak. He just acted naturally -- was himself -- and people would defer to him."

Indeed, as his younger brother described, Jim Pohlad is reluctant to talk much about himself and grants few interviews, but he remains well-known around the Twin Cities for one reason: the Twins.

The franchise just completed its first season in the newly built Target Field, a facility that deeply divided the metro area over how much the public should pay toward it but was wildly successful in its inauguration. Nearly every game was a sellout.

"It was a good year," said Jim Pohlad, who runs the Twins as CEO. "Everything performed better than planned."

But it wasn't that long ago when it seemed Target Field might never happen. Many felt the Pohlad family should cover the costs; Carl Pohlad wanted public money for the half-billion-dollar project.

"We made a decision early on to take a public position in terms of trying to convince folks to build a new stadium," said Bob Pohlad, now 56. "It was a bad decision. It seemed endless. It was not a good time."

Carl Pohlad reinforced his reputation as a tough negotiator, at one point threatening to allow Major League Baseball to dissolve the franchise back in 2001. It was a threat taken personally by many in the community, leaving the Pohlad family to endure their share of slights and slurs.

That "was probably the low point for the Pohlad name," said Dave Mona, a public relations executive and WCCO Radio personality. Today, said Mona, "History will be kind to Carl."

While the Twins often dominate the headlines about the family's businesses, the team is but a portion of a larger Pohlad organization. By all accounts, the brothers are pushing aggressively on all fronts.

Earlier this month, reports circulated that a Pohlad-owned company was negotiating to develop part of a high-profile block on the Nicollet Mall. The brothers say they are open to all sorts of investments, which explains their diverse holdings.

"We've been very opportunity-driven as opposed to strategy-driven," said Jim Pohlad.

But this time, the strategy is kept quiet.

Avoiding pitfalls

The brothers consider themselves equals in the overall Pohlad organization, although Jim oversees the Twins and Bill is CEO of his movie production company, River Road. Bob supervises the organization's other companies.

All three sit on a six-member board of directors that governs the businesses, along with three nonfamily members who were advisers to Carl before the brothers took over.

"I can't emphasize more the closeness of the brothers and their commitment to work through any issues that come up," said Pohlad board member Brian Wenger. "The transition [when Carl died] went well. The sons had all been active in the business prior to Carl's passing, and they had done thinking about their roles and responsibilities."

The brothers operate from a suite of offices in the RBC Plaza tower on the corner of 6th Street and the Nicollet Mall in downtown Minneapolis, three blocks from the new ballpark. They frequently have lunch together, often walking across the street to Mission or down the block to Zelo, two popular business eateries.

"That's good," said Tom Hubler, head of Hubler for Business Families. "You need to put energy into the success of the company outside the business relationship. You need to have lunch together.'' (The Pohlads are not Hubler clients.)

Jim and Bob are tailored suit-and-tie guys; Bill is not. On a recent day he was dressed in black boots, black jeans, black jacket and a black shirt with thin white stripes. Befitting his movie producer image, Bill wears his hair considerably longer than his brothers.

They speak of one another in respectful tones, well aware that interfamily fighting has been a cancer for other family businesses as they pass from one generation to the next.

"You need to avoid the pitfalls -- money and power," Jim Pohlad said. "The minute you sense there might be an issue, you've got to work on that. We have been fortunate."

Given his career in Hollywood, Bill Pohlad would seem to be the most likely to be seduced by the temptations of wealth, but he remains rooted in Minneapolis, choosing to live here instead of California. He opened River Road Entertainment in 1987 and eventually made an international mark for his company with the production "Brokeback Mountain," which won three Oscars in 2005.

River Road also produced "A Prairie Home Companion'' in 2006 and the Sean Penn-directed "Into the Wild'' in 2007.

"I'm not a networking guy," Bill Pohlad said. "I don't go to parties and try and meet every possible director or writer. I want to be able to connect with an individual on a one-to-one basis."

Giving back via the family foundation

As the brothers lead the family's business interests, they have taken over how the family invests in the community.

The Pohlad Family Foundation, founded by Carl and wife Eloise, quietly contributes tens of millions of dollars a year to help the needy and distressed, particularly in areas like Minneapolis' North Side and Dayton's Bluff in St. Paul.

Kip Browne, a community organizer in the Jordan neighborhood of north Minneapolis, has never met the Pohlad brothers. But because of them, the Jordan area is a better place to live, he said.

"You can have a lot of ideas to make things better in a challenged community. But the No. 1 impediment is the dollar," Browne said. "The Pohlad family was willing to make the investment."

In addition to summer jobs and summer camps, the Pohlad Foundation also decided to invest in the infrastructure of ailing neighborhoods. Beginning in 2008, the foundation provided $2 million in forgivable loans so residents could purchase homes, many of which were in foreclosure, and another $250,000 in additional forgivable loans for residents to repair and rehab existing homes.

"Right before my eyes, the neighborhood was literally transformed," Browne said.

While most casual observers point to Target Field as the Pohlads' biggest contribution to the community, Minneapolis Mayor R.T. Rybak looks elsewhere. "Much more important is the work the Pohlads have done very quietly, but on a significant scale, to take on the difficult issues we face."

The foundation, currently valued at $173 million, made contributions of $19.6 million in 2009 for job creation, small-business assistance and funding for nonprofit organizations already strapped by a tough economy. The foundation has donated more than $11 million in the first nine months of 2010 for a total of $97.9 million in grants since 1994.

"We're proud of that," said Bill Pohlad, chairman of the foundation. "It would have been easy to just toss out money to other groups. But our mom was interested in hands-on help for people in a personal way. That spirit has continued."

Embracing such priorities is essential for a wealthy family-owned business, especially one that is trying to make a successful transition to the next generation, said Hubler, the family business consultant. "You need a common vision to unite you. And you have to help each other be successful."

The Pohlad brothers have that bond and a shared vision for leading their ventures in the years ahead, said Stofer, the Pohlad executive. In the end, their unity may prove to be as much the family's legacy as their business success.

"The boys really stick together," Stofer said. "Carl always wanted that."

David Phelps • 612-673-7269

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