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Posted Jun 9, 2007, 11:01 PM
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Join Date: Aug 2006
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An interesting interview with Sacramento developer and UC-Davis alum Paul Petrovich in the California Aggie.
Quote:
UC Davis alumnus discusses business success
Paul Petrovich estimates self-worth at over $100 million
By: MILES DUNCAN
Caifornia Aggie, 5/31/07
In the business world, making $1 million has long been the standard goal for a young entrepreneur. For Paul Petrovich, who reached that plateau before the age of 24, it was just a starting point.
The UC Davis alumnus, who estimates his current worth at more than $100 million, is founder of the Petrovich Development Company. Started in 1986, the corporation designs and builds shopping centers, like the Oakshade Town Center in South Davis, and then leases them to a variety of businesses.
Though Petrovich now owns one of the largest development companies in the country, realizing the American Dream didn't come easy for him.
For all his business achievements, Petrovich started out as an athlete, winning a Babe Ruth League World Series while still in high school. As a promising pitcher, he received 18 athletic scholarships to play college baseball but lost the only one he accepted, from UCLA, after getting drunk at his high school senior prom.
Petrovich then deferred to Long Beach State, though he said he "hated it there," and transferred to UC Davis shortly thereafter. While at Davis, he enjoyed a wealth of experiences, including pitching for the baseball team, being a member of the fraternity Phi Delta Theta and working as a volunteer firefighter.
After graduating in 1982 with a degree in managerial and agricultural economics, he accepted a job offer to work as a broker during his senior year. But after arriving on his first day, he found that the man who offered him the job had been fired and had to fight the brokerage firm's manager for his promised position.
"He said, 'Fine. There's a desk and a phone and a phonebook. Go for it,'" Petrovich said. "So I was afraid to leave my seat - I thought they were going to change the locks - and I ended up being their top producer."
Yet the brokerage world was not always so successful for Petrovich, who recalled making only $1,100 in his first 14 months, while working 90-hour weeks. All that changed when he got a listing on the corner of Third and A streets in Davis for an old bookstore that was going out of business.
Leasing the property to FedEx Kinko's, a cookie store and Café Roma, Petrovich used the opportunity to make his first real profit in the business and a name for himself in the process. Encouraged by Petrovich's growing reputation, the owner of University Mall contacted him to redevelop and sell the property.
Through hard work, he earned $256,000 from the deal, though Petrovich didn't know how much he had made until his father delivered him the check.
"I remember he just slugged me. He said, 'You son of a bitch, I'm holding a quarter of a million dollars in my pocket,'" Petrovich said, laughing. "And for a guy that grew up in the Depression, and fought in World War II, landed on Normandy, that was a big deal for him."
Petrovich attributes his success as much to his competitive sports background as to his upbringing by Depression-era parents. However, he insists that in his industry, "it all comes down to instincts."
"In business, you only have so many opportunities to make money," he said. "You only have so many opportunities to make a bad choice or a good choice and survive. And if you don't continue to make more right decisions than wrong decisions, you're going to fail."
Petrovich said his business model often leads him to redevelop real estate in inner-city areas, reusing the infrastructure of roads and utilities to build his shopping centers.
"For doing that, I end up having incredibly successful projects that people want to shop at because it answers the needs of a community that had been ignored," he said. "A lot of times this ends up in ethnically mixed areas. They're underserved."
Petrovich takes a more conventional approach to philanthropy as well, having donated to an on-campus oncology lab. He is also currently working to provide new homes for orphans in Sacramento. Most famously, he is working to clean up Sacramento's Curtis Park, a neighborhood consisting of an old train yard highly contaminated with lead and arsenic, and redevelop it with homes and a shopping center.
Petrovich also contributes art to the community through his projects, in what he calls "private art in public places," including his most talked-about piece, a sculpture made out of recycled chrome bumpers in front of a Safeway market.
"Taking some of my profits and putting it in the form of interesting, thought-provoking art is another way of having people enjoy and think about their shopping experience, as opposed to it being just another grocery store," he said.
The father of three said he plans to keep running his business at least until his children graduate from college, but said he almost wouldn't recommend the industry to them.
"It's a very demanding, teeth-grinding, hyper-competitive environment that will eat you alive if you don't have the backbone," he said.
For those competitive enough to try to make it in business, Petrovich suggests obtaining a law background and avoiding difficult partnerships. He said most entrepreneurs don't need an MBA.
As for the best advice he's ever received? Petrovich said it came from a high school baseball coach who told him, "Don't confuse activity with achievement."
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