published Sunday, June 17th, 2012

Fathers, sons and sons-in-law help family companies thrive

CBL & Associates Properties founder Charles Lebovitz, second from left, stands with his sons, from left, Alan, Michael and Stephen.
Photo by Brad Cansler
CBL & Associates Properties founder Charles Lebovitz, second from left, stands with his sons, from left, Alan, Michael and Stephen. Photo by Brad Cansler

Barely one in 10 family-owned businesses make it to the third generation, and only 3 percent survive past that, according to the Family Business Institute.

Yet the bitter statistics have left many of Chattanooga's best-known companies unscathed, as the area's descendants continue to ply their ancestors' trade.

The passing of the torch from father to son isn't always a smooth process, local businessmen say.

MALL DEVELOPER

Charles Lebovitz, the founder and chairman of Chattanooga-based CBL & Associates Properties Inc., said that while working with his three sons was always a dream, it wasn't always a sure thing.

"I always hoped that all three of my sons and I could be in business together, but it was a different track for each of them," Lebovitz said.

His middle son, Michael, was always interested in the mall business, and would walk around the parking lots with his father to manually adjust the lights when the seasons changed.

Allen, the youngest, grew up immersed in the business and "it became part of his life," Lebovitz said.

Stephen, however, was just the opposite.

"It was only in his later years after he graduated from Harvard that he showed interest in being a part of that," Lebovitz said.

The current president and CEO of CBL's rekindled interest was aided in part by his father opening the company's first regional office in Boston -- where Harvard is located -- and offering Stephen a job there.

But Lebovitz never talked directly with his sons about joining the family business, he said. It was more organic than that.

As the company's next generation of leaders grew up, they "came to realize that there's a real value to what we do in creating the shopping center projects that provide jobs and income and become such an important part of our community," he said.

Lebovitz himself grew up learning about shopping centers from his father, Moses, who built Chattanooga's first shopping mall, which is now Eastgate Town Center. Charles Lebovitz ultimately started his own eponymous company, CBL, a real estate investment trust which owns nearly 160 retail properties across the country.

The challenge at family gatherings now is finding something to discuss other than shop talk.

"The business almost comes up automatically, but other members of the family say, 'let's talk about something else,' and we are happy to change the topic because we spend enough time talking about it in the course of a business day," Lebovitz said. "We almost have to discipline ourselves not to monopolize the conversation."

TOURIST ATTRACTION OWNER

Bill Chapin, the third generation in the family group that has always owned Chattanooga landmark Rock City, takes a different view.

Rock City was his literal backyard. He grew up with it, and didn't know any other way. In fact, there isn't anything else he'd rather talk about than Rock City.

Garnet Carter, Chapin's great uncle, bought and developed the property into a world-renowned destination with his wife, Frieda, who liked gnomes, rocks and flowers.

Chapin's father, E.Y. Chapin III, was good friends with Garnet Carter, the younger Chapin said.

"They liked to play golf, gamble and drink whiskey, so my dad went to work with Uncle Garnet after World War II," Chapin said.

After buying out his father in 1985, Chapin said he still goes to see his dad from time to time for advice.

"We get together every week and share stories about the way it used to be," he said.

His son-in-law, Andrew Kean, will probably take over the company "if he continues to do a good job," Chapin said of Rock City's fourth-generation leader.

"And if he doesn't, then I'll fire him," he joked.

Even though it will be the third name change in Rock City's history of owners, Chapin is satisfied that the institution will remain in the family. Kean does a good job with the day-to-day operations, and has taught Chapin a thing or two as well.

"I've lived next to the property all my life, but Andrew has set a very good example for me of having reasonable boundaries and making sure I get away from the place once in a while," Chapin said.

ORTHOTIC/PROSTHETIC MANUFACTURER

Family businessmen talk about varying motivations for why they work the long hours and give up other careers in favor of building a dynasty.

For some, there's no other option. For others, it's about preserving a legacy and making peace with who they are.

Michael Fillauer, president of orthotic and prosthetic manufacturer Fillauer LLC, said he almost didn't come back after college.

The now-fourth generation leader of the family business didn't always feel like he fit in.

"I think there's been struggles about, did I want to go into the family biz or did I want to go out on my own and do my own thing," Fillauer said. "My father [Karl Fillauer] went through the same thing."

After parts of the company were taken over and shut down by foreign corporations, he realized along with his father that the company needed owners who cared if it was going to survive.

"I don't know if the company would be here or not if we hadn't stepped in," he said.

His secret to surviving in the family business now is to "find your niche and talents," Fillauer said.

For instance, he doesn't care for accounting, but he considers himself a competent manager. By finding an outlet for his strength, he was able to carve out a place for himself in the business.

"There are certain things the company does that are just not me, but you've still got to find a way to be involved in a ways that fits your personality, talents and interest, and try to be what you are naturally," he said. "You can't be something you're not."

UPSCALE FURNITURE RETAILER

The Small Business Administration says that drafting a succession plan is among the most important things a business owner must do if his company is to survive.

But sometimes plans change.

That's what happened to Richard Fowler, who was ready to hand the upscale furniture retail business over to its fifth generation when fate intervened.

Fowler's son, Calvin, was running the business and everything was going fine. Then one day, Calvin felt called to serve as a pastor in Savannah after 11 years in the business.

"Before he was called to preach, I was able to leave and I pretty much had turned over the reins," the elder Fowler said.

That all changed when his chosen successor left for the Georgia coast, leaving a younger Carter in his place.

"When Calvin left I had to come back in and take over the reins and train Carter," Fowler said.

Most of the lessons were already taught, however. Years of dinner table conversation came back to Carter and he gained proficiency after a short time on the job, according to his proud father.

Now, he's preparing to once again step away from the business. There isn't a formula for knowing when to let go, Fowler said, "You just know."

"Carter, I had to hold the reins back on him a little bit because he's a racehorse, but I'm walking away now, and I'm turning it over," Fowler said. "And I trust him."

about Ellis Smith...

Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...

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