82.1 F
San Fernando
Thursday, Mar 28, 2024

Making Good

Michael Cusumano has development in his blood. His father Chuck and his uncle Roger started Cusumano Real Estate Group in 1959. The firm has come to represent development in Burbank, where it’s completed more than 30 projects over the years, from office buildings to senior living. When Michael and his brother Charlie were in John Burroughs High School, they bought their first piece of property. Four decades later they are running the family business. Michael joined the business in 1984 after graduating college. The developer sits on countless non-profit and community boards, including the Burbank Arts For All Foundation, Providence St. Joseph’s Foundation and Burbank Business Partners. Now, he is shepherding the company’s biggest project ever: the mixed-use Talaria at Burbank, which will have a Whole Foods market on the ground floor and 241 apartments above it. Cusumano estimates the 400,000-square-foot project set in the heart of the Media District will cost more than $150 million. The developer sat down with the Business Journal at his corner office overlooking the Verdugo Mountains to talk family legacy, high-school football and how the development game has changed in the city. Question: Growing up, did you find real estate and development interesting or was it just what dad did? Answer: It’s not really sexy, no, but I saw so much opportunity. When it came down to it, I saw the most opportunity in real estate. It’s probably because it was something that I knew. Since I had such a comfort level with it, it was a natural trajectory into the field. You and your brother made your first real estate investment while still in high school? What was it? We started really, really small. It sounds prestigious that we bought a building. But the facts are we bought a one half interest in a triplex. I was working through high school, mostly in construction. We saved our money and made the small investment, about five grand each. We broke even. What was Burbank like growing up for you? Burbank was really a different place. Lockheed was the major employer. You didn’t venture over to that side of town between 2 p.m. and 4 p.m. because after they got out there was a mass exodus to the freeway. There wasn’t much to do in Burbank. Very few restaurants and nothing you could call an entertainment spot. It was a sleepy suburb. I hear you had quite the high school football career? Growing up, athletics was a really important part of our life. We all played football from the time we were kids. It was something we did together. I learned some great lessons about sacrifice, hard work and team work. It’s something I really grew to love. We had a number one rated team at John Burroughs and I absolutely loved it. Were any colleges interested in you athletically? I could’ve gone to Brown and play football, but I had already been accepted to UCLA. I’ve been very happy with my life. But it is definitely one of those things you look back on with a little bit of regret and wonder. Do you still follow local high-school sports? Not so much. We returned for the Burbank versus Burroughs game and it was a fun opportunity to reminisce and pull out my letterman jacket. It still fit. I took my kids down. It was rewarding. But I don’t get a chance to go back as much as I would like. What brought you to want to join the family business? It was never really fully preordained. It was never set. It just evolved. When I was in college I worked in construction and I went to the companies that were building for the family business for work of course. I hated it. I was looking for a way to get into the business but get out of the dirt. In college, I wasn’t fully committed. But the market in the mid ‘80s was strong. It sure sounds preordained. I could’ve gone out on my own, but you need capital. I looked at my dad and uncle and thought it was the best opportunity for me to get into the business with a capital base. If you weren’t in real estate, what do you think you would have done with your life? After going to UCLA and getting my degree in economics, I probably would have ended up in some sort of finance job, maybe on Wall Street. I love numbers and economics. So how many family members are in the business with you now? My dad Chuck and his brother Roger are still active in the business. And my brother Charlie is a full partner. He has been involved since he graduated USC in 1986. USC? Didn’t you go to UCLA? There’s a little bit of a rivalry there. We used to have a tradition that the loser of the UCLA-USC game would have to wear the other guy’s hat around the office for a month. I had some good years in the ‘90s, but then the tide turned. And then there’s this massive, life-size bear in the middle of the office. What’s the story there? My brother Charlie is a huge outdoorsman. My dad is too. About 20 years ago, we took a trip to Kodiak Island, Alaska. It’s the far reaches of the Earth, there’s nothing out there. We went out there and it was a burdensome, tough trip. My brother shot the bear and it’s been with us ever since. That’s the actual bear? That is the actual bear. What’s that like, mixing business and family? Our commitment to business forged a bond that has worked. Family businesses generally don’t work, so I think we’re really the exception. And this is going to sound unbelievable, but in the 30 years we’ve been doing this, there’s never been a shouting match. There are always family squabbles, but they stay out of the business. In all these years, how many developments would you say Cusumano Real Estate has been a part of? I honestly don’t know. We never counted. We’re active in the market, both in development and acquisitions. We’ve closed 31 deals for acquisitions since 2010. Are there any that stick out in memory? We bought one of the largest complexes in Burbank in a distressed sale in 2010. The owner needed to unload it and there was a lot of competition. We were able to prevail because the seller was convinced we had the best chance of performing in a short time frame. We made an offer in early June and we closed in three weeks. No one closes a big deal in three weeks. What was the property? It’s now called the Village at Toluca Lake. It was the Jefferson at Toluca Lake. (Cusumano paid $31.5 million for the 151-unit building) As a family with such coattails in the city, is it a bit like “Cheers,” for you, where everyone knows your name? I don’t really think of it in those terms. I think about being an important part of the community and having the chance to give back. There may come with that a level of recognition. I recognize that. What about in regard to pushback over planned developments? Do you have to deal with that yourself? We’ve never employed any spokesperson. We have always represented ourselves in the community. But you know, we’re not an out-of-town developer. We’re going to be here. We take a tremendous amount of pride in the developments here. Which development in your career received the most pushback? We built the Park Avenue Senior Apartments on Whitnall Highway in 1992. It was on a high-density site that backed up to single-family homes. That neighborhood was very vocal in their opposition for development looking into their back yards. Over the course of the process, we met repeatedly and they even worked with us on the design. It took some time, but we worked it all out. When the project was in front of the city, we had residents from that community come in to speak in favor of the project. So in all this time with all these projects, any missteps? Honestly, it’s not being more aggressive. In the mid ‘90s, we bought about a dozen buildings. And we looked at 500. In hindsight, any one of those buildings could have been a huge money maker. We were cautiously optimistic, but we should have bought more. When everything goes on sale and you can buy at half cost or less, you have to buy. Also, we’re not very good sellers. What does that mean? Well, we almost never sell. We never take the opportunities to exit properties that peak and move capital over, so we maybe missed a few opportunities. And now you’re pushing the Talaria at Burbank mixed-use. Is that a first for the firm? It’s the first true mixed-use residential we’ve ever done. And it’s a developer’s dream to be able to build such a project, with the best retail tenant in Whole Foods, the best amenities and to have it located so close to the studios. It’s really exciting. Where is the Talaria project anyway? Catch us up. We are in the process officially now. We have a formal application with the city and are undertaking the environmental review. Our anticipation is that this will be in front of the City Council late in summer and begin construction at the end of the year. How has Burbank changed through your life? Well, as I mentioned, there was very little for kids or residents to do. But everything has completely changed. We’ve got great shopping, restaurants and it’s a fun and vibrant place to be. Why did you move out of Burbank given your history here? I lived in Burbank until July 2000. I looked for a home in Burbank for a long time with a lot of land. We had young children and wanted a property with a lot of land where they could play. We couldn’t find anything so we found our house in the Valley. It’s on about 3.5 acres. How has the real estate business changed? In the past, it was very much like the community. Things were owned by local people. There were very few large properties or institutional players. That profile has changed. Whenever a trophy property comes available in Burbank, which is incredibly rare, it will now get attention from everyone in the real estate community. The list of charities your company is involved in is a bit staggering. Is philanthropy a big focus for you? If not us, who? But it really came from my grandmother. My grandfather was born in Sicily, married my grandmother and raised four kids. She lost him to cancer when the kids were teenagers, so she went to work. It’s not woe is me, but she did what she had to do. And when she retired, she began volunteering at St. Joseph’s Hospital right away. The philanthropy is her legacy. She made giving to the community a focus for her life, and an example for us. What are the “Wounded Warriors”? We have had a great concern about the well-being of veterans for a long time. You see these young men who have gone to serve our country oversees and you don’t understand what an ordeal it is. The guys that go through that come back and we feel an obligation to afford them every opportunity to reintegrate. It’s not an organized charity or non-profit, it’s just something we consider important. So what do you do? It’s spearheaded by my brother; his son is in the service. We set up a triathlon team and thought training would help the guys gets their minds off of injuries, give them purpose and a sense of camaraderie again. It’s about a dozen guys. They train and go all over the western United States to run. It’s had a huge impact that someone cared so much for them. We just wanted any way to get their life back together. But it started with the triathlons. Do you run the Triathlons? My wife has conned me into doing a few. There’s a tremendous sense of accomplishment when you finish these things. But man, they’re tough. Your wife too? My wife is a world-class athlete. She’s run the L.A. Marathon I think 17 times. She was a competitive swimmer in high-school and college. Does your wife play a big role in the business? She takes on little projects. She’ll take a building, fix it up herself and really focus on it. She has a great design sense. For her it’s a lot of fun. And I hear you’re quite the boxer too. Where does that come from? When I was a kid, we just boxed and played around. And about seven or eight years ago, I walked into Gio’s Brooklyn Boxing Club about a block from here. This job I do is very fast paced and there is always a lot going on. So it became an outlet for stress relief. When you’re in the ring and someone is trying to hit you in the face, the only thing you worry about is the guy in front of you. Ever been knocked out? No. I’ve never been knocked out. I’ve gotten hit really hard and came home with some damage, like black eyes and a fat nose. I’ve also dealt out a bit of the same. What kind of toll does the company take on your personal life? From the beginning, I made a decision not to let the business run me. There are people in my business who work 60 to 70 hour weeks, miss kids’ recitals and all that stuff. But I never miss any of that. Family is so important and I keep that as the most important thing in my life. How many hours a week would you say you put in at this point? I’d say 50 and it’s manageable. Some of it I even do from home. What are some of the greatest challenges? It’s about managing the growth. How do we transition from solely family managed to not? Bringing in great non-family executives. One of the greatest challenges facing us right now is setting up a management structure that doesn’t have so much Cusumano leadership. So you took over from your dad. Do you think your son or daughter will lead Cusumano Real Estate Group one day? Time will tell. There are a lot of grandkids that have expressed some interest in real estate. We’ll see who steps up to the plate. There are a lot of opportunities for the next generations if they want it. But for my kids, it’s whatever they want in the world. I’ll support them in whatever they choose. Michael Cusumano Title: Managing Director Company: Cusumano Real Estate Group, Burbank Born: Oct. 26, 1962, Glendale Education: B.A., economics, UCLA; MBA, Pepperdine University in Malibu. Career Turning Point: Graduating college in 1984. “There was this huge opportunity to get into the business and I took it.” Most Influential Person: Father, who founded the company. “I grew up in the family business and had a unique opportunity to see the business inside and out from a very young age. So my dad was both inspiration in family and in business.” Personal: Splits time between homes in Indian Springs Estates and Malibu with wife of 23 years, Caroline; 19-year-old son, Michael Tanner; and 18-year-old daughter, Taylor. Hobbies: Travel, reading, boxing

Featured Articles

Related Articles