washingtonpost.com
Family Business Looks to Expand
Lerners Have Deep, Local Roots

By Thomas Heath
Washington Post Staff Writer
Friday, November 4, 2005

When Theodore N. Lerner was a young man growing up on Fifth Street in Northwest, he would walk several blocks to Griffith Stadium, where the future real estate mogul took a job as an usher because he couldn't afford to buy a ticket to watch the Senators.

"I didn't have the money for admission in those days -- I think it was less than 50 cents a ticket -- so I took a job as an usher to get in," Lerner said. "My dream was some day to be the owner of the team."

After three decades of failed attempts to buy a Major League Baseball team, Lerner, 79, is now the closest he has ever been to fulfilling his dream. He and his close-knit family, who operate a vast real estate empire in the Washington region, are among the leading contenders of the eight bidders for the Washington Nationals.

"After the heartbreak of seeing our Senators leave the city twice, I never thought that I'd ever see big league baseball return to D.C. in my lifetime," Lerner said. "Now that it is back, I am deeply committed to assuring that it remains here, is played in a first-class facility which people can enjoy, and is operated in a way that brings the community a common source of pride and joy that serves as a community bond. I hope this will be a lasting legacy I can leave to my family and to the community where I was born and raised."

Lerner's comments, which came in an e-mail response to written questions this week, are the most extensive he has made in public since he bid on the Nationals this year. Indeed, he has been nearly invisible in his pursuit of the team, which is consistent with the private way in which he has run the family's real estate business but which also has raised concerns among some in the area over whether he can sell himself to the local community as well as he has done with baseball.

Lerner in recent decades has either bid on, or expressed interest in, the Baltimore Orioles and San Francisco Giants but each time fell short of his goal, in some cases because he did not put enough money forward. In 1999, he lost out to Daniel Snyder for the Washington Redskins, who bid a record $800 million for the NFL franchise.

"They've always wanted to own a sports team but at the same time they wanted to make a prudent business decision," said Gary Abramson, owner of the Tower Companies, which has partnered with Lerner Enterprises on many area projects.

Baseball officials say Lerner has met the $450 million sales price on the Nationals set by the league. The league may select the new owner in time for a Nov. 16-17 owners' meeting in Milwaukee.

While some other bidders have gone on radio and TV, touted high-profile partners and showered charities with donations in the run-up to baseball's decision, the Lerners have tried to gain the league's confidence more quietly. The lone investor outside the immediate family identified so far is Fox Sports anchor James Brown, a native of Washington.

Lerner "is the real sleeper in this," said Mayor Anthony A. Williams, who publicly has come out in favor of another local group headed by businessmen Frederic V. Malek and Jeffrey D. Zients. Williams said he believes Lerner could also represent the city's interests as the team's owner.

"We do not think a political or PR campaign was the best vehicle," Lerner said. "We have approached our bid, as we do all of our business ventures, by putting forth our experience, qualifications and credibility, and then allowing for a determination to be made of whether others desire to do business with us. We would like to be judged worthy to own and operate the Nationals based on who we are and what we can offer to assure the long-term stability and success of the franchise."

'Hands-On Pride'

Lerner's reputation for discipline with money and his family-oriented business inspires confidence from officials at MLB headquarters in New York who like the idea of a single, deep-pocketed owner running the franchise.

But others privately express concern that Lerner's group does not have the broad political and business support from the Washington community enjoyed by some other groups. And some in the business community said the Lerners haven't worked hard enough at solidifying local backing.

D.C. Council member Vincent B. Orange Sr. (D-Ward 5) said he met with a representative of the Lerners but never with the family members. "Of the groups out there, I have a rapport with the Malek and Smulyan groups, the Haney and Ledecky and Collins groups and can put my hands on them at any time and have an open dialogue," Orange said. "The Lerners? I have never met them."

"They don't think like a corporation. They think like a family," said Abramson, whose family shares a suite at FedEx Field with the Lerners. "The have pride of ownership in terms of the projects. They visit them personally, know the tenants, visit the employees. They would bring a family, hands-on pride to the team."

When Ted Lerner visited Commissioner of Baseball Bud Selig in Milwaukee two weeks ago, family members went as well, including his son, Mark, and sons-in-law Edward L. Cohen and Robert K. Tanenbaum. While Ted Lerner is the chairman of Lerner Enterprises and the control person heading the baseball bid, Mark runs the Lerner real estate holdings and is a sports enthusiast who would eventually take over the Nationals, according to Michael Shapiro, a family spokesman. Cohen manages the Lerner family money; Tanenbaum handles financing for real estate and the baseball bid.

Mark Lerner is also a partner in Lincoln Holdings, which owns the Washington Capitals, the Washington Mystics and 44 percent of Washington Sports and Entertainment, the holding company for the Washington Wizards and MCI Center. Ted Leonsis is the majority owner of Lincoln Holdings.

Lerner said the family will not micromanage the team. "While our family will be active in assuring the organization's commitment to quality and integrity . . . we are cognizant of the error often made by new owners and will seek to retain the best available professionals to operate the club, from the team president on down," Lerner said.

Marty Irving, chief executive of Irving Interests and a former part owner of the Capitals, described the Lerners as "very generous, very private, model citizens" who build first-rate properties. But Irving questioned whether the Lerners can get along with 29 other baseball owners after having autonomous control over their own business.

"They have the financial wherewithal, no question," Irving said. "The question is are their skills transferable to sports? It's very different when you're in charge of your own project."

Leonsis said the Lerners "would make ideal owners of a professional sports franchise. They are great teammates and partners -- and I have personal experience with Mark as a minority partner. He is very respectful to the game's economics."

'A Visionary'

Ted Lerner graduated from Theodore Roosevelt High School in 1944, where he played on the tennis team and edited the school paper. After a stint in Texas as an Army clerk-typist, he attended law school at George Washington University on the GI Bill. While in school his father died, and Lerner, then 21, started selling houses on weekends to support his mother, sister and brother.

Today, he presides over a real estate empire that includes 20 million square feet of office, retail and commercial property in the Washington region, as well as 7,000 apartment units in Maryland and Virginia. The family developed such prominent sites as Tysons Corner in Virginia, White Flint Mall in Maryland and Washington Square in the District.

"There's no one in town with a tougher reputation to negotiate with than Ted Lerner," said Bill Regardie, former publisher of Regardie's business magazine. "I'm not implying that he was unethical. He was a visionary. But when he drew up a lease to negotiate for space at a shopping center, it was 'my way or the highway.' You got nothing. You got concrete floors and air and you paid his price."

Lerner Enterprises, headquartered off Rockville Pike in Bethesda, has continued to develop major projects around Washington, including Dulles Town Center, a 1.4-million-square-foot, two-level mall in Loudoun County and a corporate park, also in Loudoun, where the Redskins have a practice field.

Lerner has also invested in Texas Pacific Group, an exclusive private equity run by David Bonderman, who partnered with Lerner on the Redskins bid, according to people who know the Lerners. Lerner owns homes in Palm Springs, Calif., and on Maryland's Eastern Shore. He and his wife, Annette, have been married 54 years.

They founded the Annette M. Lerner and Theodore N. Lerner Family Foundation, which has given millions of dollars a year to charity, according to federal forms required of nonprofit organizations. George Washington University Law School named a building after Ted Lerner in recognition of his philanthropy.

New York developer Tom Bernstein was ridiculed several years ago when he and partner Roland Betts proposed a redevelopment of a barren business district on Manhattan's Lower West Side into a sports and entertainment area with skating rinks, a health club, soccer field, golf driving range, a 40-lane bowling alley and movie studios. But Lerner invested in the project, which is now a thriving enterprise.

"Ted looked around and looked at our plans and instantly got it," Bernstein said. "The conventional wisdom in the real estate community in New York was that it was a fool's errand, and Ted saw it differently."

Staff writers Annys Shin and David Nakamura contributed to this report.

View all comments that have been posted about this article.

© 2005 The Washington Post Company