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KERCHEVAL PREPARES TO TAKE THE REINS AT ICSC

By Debra Hazel

Passing the torch: ICSC President John T. Riordan, right, discussing the transition with his successor, Michael P. Kercheval.

For Michael P. Kercheval, the chance to lead a worldwide trade association was a natural fit in a service-oriented career that began as a teen-ager doing volunteer work in Latin America.

“There is something special about working for an association,” Kercheval said. “Your objective is service and satisfaction, not solely bottom-line profitability. In the end, however, our job is to help our members improve their bottom line. It’s just a very nice set of goals.”

Those goals include helping the industry itself adapt to meet its customers’ needs, Kercheval told attendees at the ICSC European Conference and Exhibition, held in Turin, Italy, in March.

“If the past 10 years were exciting, just wait for the next 10 years. The coming years will bring us an accelerated pace, changing consumer habits, changing technology and changing capital flows.

“Change is a necessary and desirable part of the natural evolution of our global industry. Our role at ICSC is not to be the vehicle driving change, but rather to be the industry’s facilitator of adapting to — and adopting of — new ideas and new ways of doing business,” he said.

Currently executive vice president and COO of ICSC, the 45-year-old Kercheval will officially be named president and CEO this month, succeeding John T. Riordan. Kercheval will become just the third chief staff officer in ICSC’s 44-year history.

“I have never felt so honored in my 45 years to have been entrusted with this tremendous honor and responsibility,” Kercheval said.

Born in Grand Junction, Colo., Kercheval’s early goal was to become a doctor. Summer vacations during high school and college were spent doing public health volunteer work with various organizations in Central and South America.

“My family had traveled a lot on vacation. So the opportunity to do something in a less-developed country was intriguing,” Kercheval recalled. “And the idea of doing something more than just being an exchange student, doing something in public health, was a real positive idea.”

His travels led him away from medicine and toward a career focusing on economic development. After earning his undergraduate degree from the University of Colorado, Kercheval worked with several groups in Nicaragua.

“This was during the revolution, and I got to know [leader Anastasio] Somoza very well. After he stepped down, I also got to know people in the Sandinista government, as we tried to continue some of the economic development projects.”

Returning to the United States, Kercheval settled in New York, raising funds for development activities in Third World countries, then earning a master’s degree in economics from Columbia University. After a brief return to Colorado, he completed nearly all of the work for a Ph.D. at Columbia, where he was preparing a dissertation focusing on the impact and management of rapid growth on boom areas.

“There may be some relevance in terms of what’s happening today, with the push toward smart growth that’s going on in the real estate industry. I was very intrigued by that over 20 years ago, at seeing what happened in Colorado: the impact of a large influx of people on schools, sewers, fire, health care. How do you manage it, pay for it?” he said.

Colorado’s boom went bust, ending Kercheval’s dissertation efforts. Instead, he joined Equitable Life Assurance Society as an economist. He progressed through the ranks, doing quantitative research and analysis, eventually becoming a senior economist. Then, through a series of acquisitions, Equitable became one the major commercial landlords in the United States.

“I was totally intrigued by the real estate explosion at Equitable, and was eager to get out of theoretical work. So when Equitable created a real estate subsidiary, I joined them as head of their real estate research department,” Kercheval said.

After two years, he sought a more practical application for his work, and quickly became the manager for Equitable’s $10 billion commercial lending portfolio. Overseeing offices around the country, Kercheval was involved in all aspects of real estate finance.

He became involved in international work once again when Equitable Life, the real estate concern’s parent, was acquired by French insurance company AXA Group in 1992. AXA sold the real estate subsidiary to Australia-based global real estate firm Lend Lease in 1997. Kercheval was tapped to integrate Equitable’s investment side with its Compass Management and Leasing division, and merge that with The Yarmouth Group, acquired earlier by Lend Lease. The merger complete, Lend Lease called on Kercheval, who is fluent in Spanish, to oversee its expansion in South America.

“It became a challenge for two years. I did the book research, did the field research, did the business plan and put it into action by opening offices and hiring people, finding and underwriting investments,” in Chile, Argentina and Brazil, he said.

Thus, years after his high school volunteer work, Kercheval was once again bringing something new to developing nations in Latin America.

“Never doubt for a moment that everything you learn in life you will have the opportunity to apply later in life,” he said.

All was going well: Kercheval and his wife of now 15 years, Dana, had sold their metro New York home to relocate to South America for Lend Lease. Their children, Jacquelyn, now 8, and Adam, now 5, had been enrolled in schools there.

Then ICSC came calling.

Joining ICSC as executive vice president in January 2000 gave Kercheval the opportunity to use his well-rounded experience and to achieve a greater balance in his life.

“I suppose it’s the looking ahead at my life personally and professionally: where I felt I could make the greatest contribution and get the most personal and professional satisfaction out of that contribution,” Kercheval said. “I felt that ICSC offered a lot of that, and the possibility of heading an association offered all of that.”

He has time to be even more involved in his children’s activities, to go on family ski trips, he said. And Dana also has had the opportunity for a new career, Kercheval added. She earned an MBA in finance and became a senior officer at Mastercard International and had changed jobs in anticipation of the family’s move to South America.

“She had always wanted to be a schoolteacher. So during the transition [at Lend Lease], she began substituting. After I started working at ICSC and we bought a new house, she decided to get a New Jersey teaching certificate,” he said.

The family now lives in the Princeton, N.J., area, and Dana Kercheval teaches in the West Windsor, N.J., public school system.

“She was very successful and loved her [old] job, but this is incredibly fulfilling for her. You’re personally helping someone to be a better person,” he said.

The same idea motivates his work at ICSC.

“You may be able to make a difference in a person’s life. That’s what I’ve been trying to do my whole life, way back to high school,” he said. “I wasn’t finding the same level of satisfaction in my previous job that ICSC has provided.”

Noting that hiring Kercheval was the result of a yearlong search in which dozens of candidates were reviewed, Riordan said: “Of these Mike was the best suited to do what the board of trustees had laid down: someone with a good, strong feel and knowledge of operational matters, and someone fairly conversant with the issues more on the minds of the newer generation of shopping center professionals, particularly finance; and to find someone to carry on” current successes.

Riordan, who will continue to serve ICSC in an advisory capacity as vice chairman, was quick to note that “[Mike] won’t find me looking over his shoulder. I have a personal vested interest in the independent success of my successor.”

Looking ahead, Kercheval sees his, and ICSC’s, challenge as keeping member services “fresh and relevant.

“I think the greatest challenge for any leader is to not get stale, to continue to be a bit on the leading edge,” he said.

As such, Kercheval remains a traveler, attending ICSC and other shopping center meetings around the globe.

“The depth and breadth of ICSC is enormous. It will take me another year or so to fully get my arms around everything we do, everywhere we do it. And even then,” he said, smiling, “I will still be learning.”

 

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