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ADELSON, RESPECTED MALL INNOVATOR, DEAD

By Anna Robaton

Irwin Adelson, developer of many of Québec’s leading fashion malls, died Aug. 15. He was 75.

Adelson rose from modest beginnings to build one of Canada’s largest privately held real estate companies, the Montréal-based Westcliff Group of Cos. The company, of which Adelson was chairman until his death, owns and manages assets valued at a total C$1 billion ($960 million), including the largest portfolio of malls in Québec.

Montréal native Adelson got his start in the business world at a young age. In his teens he worked with his father, an entrepreneurial Russian immigrant who bought apartment buildings in Montréal as investments and who also extended credit before credit cards became prevalent. The younger Adelson not only helped manage the apartment buildings, but also collected payments for the credit business, knocking on doors in the evenings and on weekends.

“He always had hustle,” said Alan Marcovitz, a 20-year Westcliff veteran who succeeded Adelson as president last year. “He believed in hard work and grunt work.”

After graduating in 1955 with an MBA from Harvard Business School, Adelson returned to Montréal to rejoin his father in business. In the early 1970s the fledgling shopping center industry caught his attention. Pooling money with other individual investors, he built his first shopping center in 1972 in Valleyfield, Québec, on a site other developers had rejected. The site was home to a shuttered textile mill, and a river ran along the front of the property. Where other developers saw too much difficulty, Adelson saw an opportunity to gain a foothold in a strong market.

He diverted the river to the back of the property, creating space along the front for a parking lot, and then demolished the mill. He used the demolition debris to fill the hole that remained where the river once ran and then built the 260,000-square-foot Centre Valleyfield mall.

Westcliff still owns the mall, the first of dozens of centers Adelson developed in steady progression through the 1970s and into the ’80s and ’90s.

Although he built a handful of projects in other parts of Canada, Adelson remained faithful to Québec, even when the province fell on tough economic times in the 1980s as a result of political upheaval.

Many other companies abandoned Québec during the ’80s. Adelson saw the exodus as an opportunity to expand in Canada’s second-largest province geographically. His focus on the retail sector also spared Westcliff from the losses suffered by many real estate companies with large office portfolios in Québec. Even today the bulk of Westcliff’s portfolio is made up of regional malls serving midsize towns throughout Québec.

“He stayed home,” said James R. Bullock, CSM, an ICSC past trustee and past chairman, and also former president of Toronto-based Cadillac Fairview Corp. “He knew his market, and he was really successful there.”

Centre Valleyfield was also the first of many projects Adelson built on unusual sites. His most audacious undertaking was in 1988, when he persuaded the Anglican Diocese of Montréal to let him put a shopping center under its historic Christ Church Cathedral, on Saint Catherine Street in downtown Montréal.

“When your company is small and privately owned, you have to add hustle and vision to your advantage,” said Marcovitz. Westcliff faced stiff competition from large, publicly owned real estate companies in its early days, he says.

Westcliff literally suspended the cathedral off the ground, supporting it on a series of columns and beams, while the site was excavated. This mall, Les Promenades de la Cathédrale, helped create a critical mass of retail downtown. The 125,000-square-foot mall connected existing department stores The Hudson’s Bay Company and Eaton’s and became part of Montréal’s massive underground city.

It is part of a mixed-use complex that also includes a 34-story office tower erected behind the cathedral. The 143-year-old cathedral, whose steeple is reflected in the facade of the tower, collects rent under a land lease that pays for its upkeep.

Adelson went on to undertake other projects that changed the face of downtown Montréal, including the construction in 1996 of a 500,000-square-foot office building that is home to the International Civil Aviation Organization, a United Nations agency.

Two years later, in partnership with Goldman Sachs, Westcliff purchased Place Bonaventure, a mixed-use complex in downtown Montréal, and spent C$100 million on a massive redevelopment of the property, which boasts one of the largest office buildings in Canada.

Westcliff no longer owns Place Bonaventure or the structures under and around the cathedral complex, but the company has generally adhered to a policy of holding its assets, rather than selling them. “Irwin was a guy that got things done and lived up to his word,” said Bullock. “He had an innate fairness and a sense that the deal had to be fair for both sides.”

Those qualities helped Adelson forge the relationships that fueled Westcliff’s steady growth, even in the face of competition from big public real estate companies.

He developed close ties with specialty retailers, supermarkets and department stores, including anchors like Sears Canada, that teamed up with him in some projects. He also had close ties to big Canadian pension funds, which financed some of his projects and were partners in others.

His relationships with pension funds and other investors proved especially useful during the credit crunch of the late 1970s and early 1980s, when Westcliff took on equity partners in its projects in order to continue its development program. Colleagues and competitors describe Adelson as a tough negotiator and a straight shooter. They say he also had a deep knowledge of every aspect of the shopping center business, which he cultivated by taking a hands-on role in every project.

Adelson served on ICSC’s Board of Trustees from 1984 to 1987, a period during which Québec began to undergo an economic revival. He also served on the Canadian Committee for two one-year terms, in 1988 and in 1992.

“He was smarter than most people around and a very fair person,” said Seymore Obront, an ICSC past trustee and vice chairman of Oberfeld Snowcap, a Toronto-based retail leasing consultant. “He was the kind of guy you could do a handshake deal with, and it would hold.”

Although Adelson built a number of projects on unconventional sites, he was not a risk taker in other respects. In a January interview with SCT, he summed up his business philosophy this way: “Don’t take on what you can’t do. Don’t take what you can’t finance properly. Never get squeezed for money, and expand by keeping, not selling.”

Those who knew him well say Adelson had a love of people and the shopping center business that kept him active in Westcliff well into his 70s.

In recent years the company, which today has some 700 employees, has shifted its focus to power center development and the redevelopment and expansion of existing malls. It has also become more active in the residential market.

“Irwin is very much a disappearing breed,” said Marcovitz, during an interview in January. “He is a generalist. He knows all aspects of the business. He loves people, and he still loves this business today. There is nowhere he’d rather be than in the office.”

Adelson is survived by three children: Andy (married to Cynthia) Adelson; Gail Marcovitz (married to Alan); and Heather Zipkin (married to Brad). His wife of 50 years, Esther, died in 2004. He is also survived by nine grandchildren.