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Senior executives back in the trenches

By Debra Hazel

Charles Cope … back to the mall.

Sometimes, return engagements can be better than the original run. Less than 10 years ago, the shopping center industry had a definite hierarchy. Executives rose in the ranks from junior center-level staff to senior center staff to regional office managers to corporate headquarters executives. Backtracking a level, unless as a result of a switch to a much larger company, rarely happened.

That is less true today. In recent years, former corporate executives such as Charles Cope, SCSM/CLS, former president of Wheaton, Md.-based strip and mall developer Resource Realty; and Laurence Fedorka, formerly vice president of management at Kravco Co., among others, have returned to run regional malls: Tysons Corner Center in McLean, Va., and Westfield Shoppingtown Garden State Plaza in Paramus, N.J.

But the return in the last several years of these and other former high-level corporate executives to center management does not mean that they have taken a backward step in their careers. Nor does it necessarily send a message to those hoping to run such centers some day that only professional “heavyweights” need apply.

For one thing, generally only the largest centers — such as Tysons Corner and Garden State Plaza — will attract, or be able to afford the salaries of the heavyweights, noted Rich Poline, president of Poline & Associates, Atlanta. Generally, salaries for super-regional mall managers can range from $75,000 to $100,000 plus bonuses. For premier properties, compensation can run much higher, he said.

And the large centers provide the challenge that experienced managers seek.

“Tysons Corner’s dollar volumes are larger than all of Resource Realty’s. Plus, it has 2.3 million square feet of space. It’s like running a company to me,” Cope noted.

But their corporate experience has definitely helped the heavyweights bring a new perspective to center management.

“I brought them tremendous organizational skills, people skills and negotiating skills,” said Fedorka, who joined the center in September 1997.

Not surprisingly, another benefit is a stronger relationship with the corporate headquarters.

That experience is the major reason that some owners have turned to former corporate executives to run their prestige properties, said executive recruiter Roberta Rea, president of San Diego-based Roberta Rea and Associates.

“That’s what they can bring. They know how to run a $100 million business,” Rea said.

Cope had an even greater familiarity with Tysons: He actually returned to a mall he had run eight years earlier.

“When I left Tysons, we had just finished a major renovation. When I returned, all that remerchandising opportunity was available again.”

Westfield America’s purchase of Resource Realty’s Wheaton Plaza coincided with Tysons’ need for a new general manager.

“I had never moved, and with leases rolling over, there was a lot to be done. From that standpoint, it made it interesting to me. After five years as president of Resource Realty, I had a better viewpoint of running a business. And the complexity of [center] management has just taken a quantum leap. It is much different from 10 years ago,” Cope said.

And using extremely experienced corporate professionals may be a godsend, given what one professional sees as a dearth of up-and-coming personnel who might otherwise be considered for these posts.

“We as an industry have matured, and the industry is not bringing in new talent. Developers are not saying to kids out of college, ‘Let’s start you on a career,’” Poline said.

Good talent hard to find

Finding the up-and-comers is getting harder. The early 1990s downturn resulted in hiring freezes at all levels, with few center managers changing jobs and even fewer new hires, he observed. As a result, there is a shortage of five-, six- or seven-year industry veterans who might be ready to move up to managing a large, prestigious center.

“This will only be more and more of a problem with the industry,” he said.

Industry consolidation to the real estate investment trusts also has been a factor. The financial pressures of running a large portfolio means firms have little patience for someone to learn the ropes.

“Even when things got better, every hire had to be a success. New staff have to hit the ground running; no one has the time to train,” Poline said.

The question could arise, though, about personnel relations. With corporate experience now being sought by some owners of large centers, more junior staff, as well as younger managers at other projects, may believe they can no longer aspire to managing these properties.

The key to keeping good people then becomes expanding their duties, according to Tysons’ Cope, while Fedorka notes that industry consolidation could help. Assistant managers and marketing directors can train at the prestige properties, knowing that an opportunity may open at another center owned by the same company.

Cope, for example, is heavily involved in community and local political activities on behalf of the center, focusing on what he terms “big-picture” issues. Thus, he must leave day-to-day operations that might be handled directly by the manager of a smaller center to his staff.

In addition, he actually has a larger operating staff than his former corporate job. Tysons Corner has more accountants than all of Resource Realty, and Ted Priest, the mall’s marketing director, has two assistants and two interns.

To retain top talent, Cope is delegating more and encouraging his staff to work outside traditional roles. “I don’t let Ted just do marketing. He’s now involved in leasing, among other efforts,” he said.

The larger REITs, however, can provide opportunities that smaller firms can’t.

“I wouldn’t have done this if I hadn’t had more opportunities at Westfield,” Fedorka said, observing that the Los Angeles-based company had essentially doubled its portfolio in one year through acquisitions.