Pace billionaire's latest efforts doing well, good
http://www.mysanantonio.com/business...s.3556018.html
Web Posted: 05/26/2007 11:07 PM CDT
Sanford Nowlin
Express-News Business Writer
Pace Foods salsa billionaire Kit Goldsbury made headlines as far away as New York City earlier this month with a $35 million donation to the Culinary Institute of America.
The high-profile gift may have shone a bright spotlight on the media-shy Goldsbury for the first time since the mid-1990s, when he sold his hot-sauce company for $1.1 billion. But his current company, Silver Ventures, already has made a multimillion-dollar impact in San Antonio — with far less fanfare than the educational endowment.
Bankrolled by Goldsbury's Pace earnings, Silver Ventures is a major factor in downtown San Antonio's redevelopment, having thrown its weight behind the ambitious Pearl Brewery project and two high-end hotels developed with Hixon Properties Inc., the Westin Riverwalk and the Hotel Contessa.
The company's two fast-growing food businesses — tomato producer Desert Glory and bakery Ecce Panis (pronounced "EH-chay PAH-nis": That's Latin for "Behold the bread") — have made headway in the competitive grocery industry. Desert Glory, which employs about 5,000 in Mexico growing its NatureSweet tomatoes, may be poised to replicate Pace's success, observers say, and Ecce Panis is rising fast as it supplies East Coast grocers with artisan baked goods.
They're all bold business moves, but company officials said they go beyond book values and balance sheets.
Ask Silver Ventures officials about Pearl, and they'll talk about the project becoming an "educational experience" for visitors; bring up Desert Glory, and they'll talk about how its year-round growing cycle has helped workers who once toiled as migrant laborers.
They'll point out that Silver Ventures' successes help fund the Goldsbury Foundation, a charity that in eight years has given more than $35 million locally, mostly to children's initiatives.
"With Silver Ventures, I don't think it's being a pure financial capitalist — he's a human capitalist," said Douglas Hutt, the Dallas banker who helped finance Pace's growth. "He doesn't just think about what's going to be the best return on his money. It's what will also give a return to people in terms of jobs and what will give a return to the community."
In other words, Silver Ventures thinks big, spends big and goes for long-term projects that are as much about creating wealth as they are about boosting its hometown's fortunes.
For example, the company has spent a decade to redevelop the Pearl Brewery into an "urban village" that will include housing, retail and entertainment.
Ultimately, the project could extend downtown's tourist allure to lower Broadway while preserving a landmark. Silver Ventures officials say they're aiming high, drawing inspiration from world-class spaces like Seattle's Pike Place Market and Vancouver's Granville Island.
A local focus
The project flies in the face of real estate trends by largely eschewing big chains to focus on tenants with local ties and an educational component — among them, the Center for Foods of the Americas and Aveda Institute's beauty school.
Its development team has paid meticulous attention to preserving architectural features at the 120-year-old brewery, even slowing construction to restore some touches lost amid the brewery's periodic renovations.
"This isn't just about growing companies and revenues," said Silver Ventures Chief Operating Officer Ken Halliday. "It's also about growth on the people side. It's about improving our community."
Such lofty phrases tend to flow from Silver Ventures officials' lips when they describe the company's business, but they're also quick to point out that the company isn't a charity or a billionaire's hobby. Like any other business venture, it's about making money but making it in a way that takes a long-term, community-oriented view.
Its success helps fund the Goldsbury Foundation, which has made hefty grants to San Antonio institutions from Christus Santa Rosa Children's Hospital to the Bexar County Child Abuse and Neglect Court. This month, the foundation announced a $1 million challenge grant to help the hospital with child-abuse prevention programs.
"Silver Ventures and the foundation have been thoughtful and intelligent investors in our city, both with their charitable and business efforts," Mayor Phil Hardberger said. "I'd like to see more corporations and wealthy individuals in San Antonio take a page from their book."
Silver Ventures has bolstered its small corporate staff of 30 with advisers that are among the city's best-known businesspeople. Among them: former H-E-B President James "Fully" Clingman; attorney and one-time Design San Antonio leader Bob Sohn; and Ed Kelley, the retired president of USAA Real Estate who oversaw development of Fiesta Texas, the Westin La Cantera resort and the Shops at La Cantera.
"I'm not a real hands-on type of person," Goldsbury said during a recent interview about his gift to the Culinary Institute of America. "We've got lots of good people, and I believe in empowering them to do what they do best. They're smarter than me, anyway."
Officials with Silver Ventures wouldn't discuss financial information or say how much it's spending on projects like the Pearl redevelopment. They would, however, say they have no immediate plans to grow beyond their current holdings.
At various times, Silver Ventures has been an investor in businesses ranging from entertainment chain House of Blues to former Wal-Mart Stores Inc. subsidiary McLane Foods. However, company officials said it has since shed most of its peripheral investments to narrow its focus to Pearl, its hotels and two food businesses.
Last month, the company sold salsa-maker San Antonio Farms to TreeHouse Foods Inc. for $88.5 million. It bought the sauce producer, then called Van de Walle Farms, in 2002.
"When we started, we invested in a lot of different things," Halliday said. "Over time, though, we've tried to figure out where we can make the biggest impact, and that's in real estate and food."
Birth of a brand
The crown jewel of Silver Ventures' food holdings is Desert Glory, which the company purchased in 1996.
Since then, the company has expanded from a small growing operation with headquarters in a trailer in Devine into North America's largest producer of greenhouse tomatoes. Its small, homegrown-tasting tomatoes now sell in all the major grocery chains and in all 50 states.
Unlike other produce companies, Desert Glory packages its products and clearly brands them with its NatureSweet logo. It also spends "millions yearly" on ads to promote the brand, marketing Vice President Bryant Ambelang said.
"There's been a trend toward products like heirloom and greenhouse tomatoes, but actually branding what you produce is taking it a whole new step," Matthew Enis, an editor for Supermarket News, said of Desert Glory. "They can really set their product apart by having some consistency and then marketing that to the consumer."
Officials wouldn't reveal Desert Glory's sales but would say it produces about 2 million pounds of tomatoes a week. At its 1,000 acres of greenhouse facilities in the Mexican states of Jalisco and Colima, the company uses a special process that places plants under stress so they supply an abnormally high amount of nutrients to their fruit, giving them extra flavor.
The labor-intensive business draws its work force from the same parts of rural Mexico where it builds its greenhouses, and many on its payroll previously eked out a living doing migratory work across the U.S. border. The company prides itself in keeping about 90 percent of its employees on the payroll year-round and offering health benefits, training and advancement opportunities.
"We're going to get a more consistent product if we have people who are happy and comfortable working here," Ambelang said. "We're nice guys, and we think that's just the right way to treat people, but it's also good business."
People familiar with Desert Glory say the company bears a similar stamp to Pace, the business that Goldsbury built from a regional, family-owned salsa bottler into the nation's dominant hot sauce brand: focus on a single product, make it well, market aggressively nationwide.
"It's a similar concept, and I think it's one of those things that will probably end up doing what Pace did," said Lou Rasplicka, a former Pace vice president who now heads Triad Produce. "At some point, another company may end up saying, 'Hey, that's a good idea, I think I'd like to buy it.'"
Bread and sweets
While Ecce Panis, Silver's other food company, still is modestly sized compared to Desert Glory, officials say it has similar growth potential. Though the company has yet to expand much outside the Northeast, it already counts Wal-Mart and the Kroger Co. among its clients, according to former H-E-B President Clingman, who's acting chairman of the business.
The company employs 100 people at its New Brunswick, N.J., bakery, hand-shaping some 20 gourmet bread varieties, from rustic baguettes to Italian focaccia. It uses special ovens that carry the bread along on conveyors sheathed in baking stones to give the bread a crunchy exterior and soft interior distinctive to bread usually produced in smaller artisan bakeries.
The bakery cooks the bread until it's just shy of completion, then flash-freezes the loaves and ships them to groceries.
The store bakeries finish them in their ovens in just a few minutes and sell them alongside their own baked goods — although in Ecce Panis-branded packaging.
Clingman said the company's product could end up on San Antonio store shelves eventually, but Ecce Panis wants to dominate the Northwest and Midwest before going national.
"The nice thing about this company is you don't have Wall Street pressuring you to do short-term things, and you don't have the bankers telling you how to run your business," he said. "The focus here is on building value the right way and on taking a long-term view of things."
That long-term view also impressed Hixon Properties, Silver Ventures' partner in its hotel properties.
During its partnership, Silver Ventures has consistently focused on quality, from the construction materials to minute service details, Hixon President Jack Spector said. He recalls Silver officials insisting, for example, that drinks, sweets and cookies be served free to guests every afternoon in the Westin Riverwalk's lobby.
"It ended up being a nice surprise for our customers," he said. "Little ideas like that show the kind of attention to quality. There's always a lot of brainstorming going on."
And that eye for detail appears to be paying off.
The 473-room Westin Riverwalk and the 265-room Contessa are among the top 10 San Antonio hotels ranked by daily average room revenues, according to hotel consultancy Source Strategies, which counts 35,000 rooms in the metropolitan area.
Former USAA real estate honcho Kelley, an adviser on the Pearl project, said that Silver Venture's ability to focus on lofty, long-term goals factored into his decision to work for it after he retired in 2005.
In the torrid commercial real estate market, Silver Ventures has resisted the urge to fill the former brewery site with national tenants and flip it for a quick buck, Kelley said.
"When I came over here, I thought, 'Well, we'll just do the same thing we did with La Cantera — go after some big national tenants and fill it up,'" he said. "To my surprise, they said, 'No, that's not what we want.'
"They've an honest-to-God commitment to doing this right."
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My thoughts exactly, people are still skeptical about the area... But there is still hope, give or take about 5 more years.
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