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SAMUEL PROCTOR ORAL HISTORY PROGRAM at
the University of Florida.
D--We are doing an interview with Leonard Rich in his office in North Miami Beach.
The data is January 27, 1988. The interviewer is David Dodrill.
Before we get into talking a little bit about Gulf American, tell me a little
bit about your background, as far as where you came from.
L--I was originally an advertising man. I come from New York. I answered an ad
on one occasion. I was between jobs, so I was looking. I met Jack Rosen and
Charlie Hepner in an interviewing room they had at the Algonquin on 42nd Street.
D--That's in New York?
L--Oh, that's a famous place. That's where Hayward Broon, Dorothy Parker, and
Franklin P. Adams and all his people had their famous lunch round table. I
didn't think much of it. I had to go to Washington to see somebody and they
suggested I drop in either going or coming. So I dropped in on the way back
and was interviewed by Bob Carroll, Charlie, and by Jack Rosen.
D--When was this?
L--1961, probably in February. In March of 61, I joined the Company at our
Baltimore headquarters. My title was Sales Promotion Manager, but basically
I was the man who had to motivate the salesmen, run the contests, do all the
training materials and stuff like that. Rather than being very much involved
in the external promotion and the external advertising. Most of the external
promotion was basically done in Florida, where we had permanent sites. The
big thing that we did from Baltimore at the time was we were running a home sit
operation. With all our brokers out in the field but a few "Oando's,"
owned and operated, company owned. You always have a pretty tough problem
in that kind of operation because in a home sit, a man is by himself, he's
operating his own, and the law of averages says that if he's a really super
salesman, he'll close one out of five, which means he gets four no's to every
one yes. After he closes his one out of five, maybe a third to fifty percent
of those, in the kind of deal we were doing, would cancel. Now, General
Development had shown a way, by selling at $10 down and $10 a month. We were
selling Cape Coral and we were high class. We were selling for $20 down and
$20 a month, as a minimum.
D--The high rent district.
L--Now, an important change occurred when one of our experiments...we had started
out experimenting with cocktail parties. Have you met Lester Morris?
D--No. I haven't.
L--Well, Lester was one of our chief swingers. Ex-carnie. He was travelling the
country making the morale visits better & soon, presumably training and soon,
though I don't think Lester was much of a trainer for a home sit operation.
When we tried the cocktail parties and we evaluated what it cost because we
did serve liquor and so or, Lester said, "For that money give them chicken
dinners." And we started the first dinner party program in the industry.
We quickly discovered that the party program was much more effective than the
home sit. There were several reasons for that. I don't know whether they
would be relevent to what you're interested in.
L--One of the reasons, first of all, was that instead of each man having to make
the presentation, which meant that most of them were either mediocre or bad,
we had one person up front, either a professional like Lester or somebody we
had trained, usually the manager or somebody who was better, another man.
So that meant that to begin with the human element was superior. Secondly,
when our men pitched in the home, what they pitched was a slide program. Now
we could afford to really do a film and know that it could be used. So we did
some very good films.
D--How many people would be at a dinner party?
L--It might vary anywhere from unsuccessful was only seven or eight couples, to
as many as twenty or thirty, depending on the nature of the unit that was
doing it. And, of course, we attempted to control the size of a party in
relation to the number of salesmen that the branch office doing it had. We
could control that normally by the number of invitations we sent out. There
was another advantage to a party. In our home sit a man is alone. He has
nobody to help him. He has nobody to get his morale up. Nobody to catch him
when he falls on his face. But at a party, the manager could do all that. The
man was part of a group. If the guy didn't score that night the manager was
supervising and he could determine whether the guy just couldn't sell, or
whether in terms of the percentages, that it was just one of those nights for
the man. But that meant that against a turnover probably, maybe ninety percent
I imagine, every three or four months. We cut the turnover of men way down
because we could keep the good men, we could keep them from burning out, and
if we had men who were no good, we would get rid of them. I used to control
the recruitment program. I would give every office an advertising budget.
I would tell them how it had to be done. I'd put out a manual which really
went into great detail on how it should be done. If I saw an office run ads
every day of the week, I immediately told the manager to go in there was
something wrong. They were only supposed to be recruiting new men...trying
to replace the bottom men with better men. My instructions always were, run
Sunday, and if you want to run another day, run Monday, but spend your money
where it counted. If a man ran frequently, he was panicking. He had a
problem. I would always alert management that we had a panic problem that
something was wrong. Inevitably something was wrong.
D--How many...were the salesmen paid strictly from commissions?
L--In that operation it was draw against commission. We did not pay salaries.
L--And at a typical dinner party, how many salesmen would there be per unit?
L--Originally when we started, a salesman had two couples, which was not good
because he would tend to, in his own mind, qualify them. He would probably
concentrate on the one he thought was the best prospect, but he wasn't often
right. Let's say he wasn't always right. Not only that, he had to deal with
two different personalities as it were, and there was always the chance that if
one of the couples was negative they'd kill the other one. Ultimately we
organized the parties to the point where a man got one prospect at the party,
and he'd have to concentrate on them for good or for bad. That was more
effective. When we originally started they sent out an invitation that looked
like a wedding invitation. Charlie Hepner asked me if I could do something with
it. So I developed an invitation that we called "Conquistador". What I did...
this was around the time of the 400th anniversary of Florida settlement by
D--When was this what year?
L--Let me see, I'm trying to think...this must have occurred either late in 61 or
in 62, I'm not quite sure. I was a wiseguy. There was no real supervision at
that time by the Florida Department of Business Regulation. So what we did (I
should have brought a copy in)...there was a commemorative stamp on Florida's
400th anniversary. So we did an invitation which to begin with was illustrated
by something very close to the artwork the government had. Had the old picture
of Connie Mack and a letter from Connie says that a friend of yours
recommended you. But the whole thing looked pretty official. Today, I would
probably have had to modify it somewhat not entirely. It was a legitimate
deal. We were flat out stating what we were doing. But today the Department
of Business Regulation is much tougher that you make look like a government
sign. That about tripled our response. So we were able to send out fewer
invitations. Ultimately of course, all these things dwindled. When the whole
industry followed us, there were millions of invitations in the mail. We put
millions out each year. Ultimately, you skim the cream off and your mailings
become less and less productive. But up until the very end, my "conquistador" used
to do as a mailing)either outpulled or equal to pull of anything that was ever done.
It was really remarkable.
D--What kind of response would you get from a mailing like that?
L--When I first started I was getting four or five percent. At the very end it
went down. You did well, very well, to get one percent. That meant that
apart from thefactorof inflation that your cost of getting a prospective
buyer shot way up. So the party program really enabled us to jump, as I recall,
from about a thirty six million dollar volume in home sit to seventy or eighty
million the next year. I know we doubled it.
D--How many of these dinner parties would they have in a typical year?
L--In a month we might have fifty, sixty, or more.
D--Would they be all over the country?
L--All over the country. At the same time, now that we had some degree of stability,
I developed an awards program. Because in talking with Jack Rosen, Jack said,
"We gotta have some way of getting these guys down to Cape Coral. Most of them
have never seen the product. We have to have a basis." So I said, "All right.
We'll base it on volume and we'll have a series of awards when a guy hits, let's
say $250,000, he goes down to Cape Coral and we have an annual awards get
together. When he hits $500,000, let's say, he can take his wife. When he
hits, let's say, $750,000 or $1,000,000 (whatever it might be), in addition to
sending him down to Florida we'll give him a trip to the Carribean. The fact
that so many men won some of the awards was a reflection of the new stability
that we had found. In this kind of direct marketing, as I say, the turnover
is tremendous. We also, now that the party program was going, had a speaker
training program. Jack used to, originally he would hold out a plum...if you
do well, I'll let you speak. I used to look at him and laugh to myself because
other than Lester Morris, I felt I could do better than anybody there because
I happened to have a fairly decent background in public speaking. But I had
no desire to do it. By the way, one of the big advantages to a party was
called t.o.ing. T.o. is a takeover man. He's the guy who walks in when the
salesman is having trouble and attempts to close the deal for him. Usually
it's the manager. In a big operation as in Cape Coral itself where we would
have many more salesmen and many more people, there would just be t.o. men.
D--How did they do that?
L--The salesman will signal him and he'll make some comment that Mr. & Mrs. so
and so say, and he would state the objection. He would...the objection that
the man cannot overcome is not necessarily the real objection. So it's up to the
t.o. man to ferret it out and to attempt to close the deal. This was very
important because t.o.ing is normally part of any effective direct selling, but
the man in the home by himself couldn't have a t.o. So again, you see this is
one of the reasons we achieved comparative stability in the sales force. And
why we could turn the spicket on and up the sales. I ran all kinds of contests.
My contests were different from what they had run before. I didn't believe in
fancy printing. My view was that what would motivate the men were not stunts
and slogans, but what you wrote about them. I always looked at a contest as
though I were doing sports writing and describing the ballgame, or describing
a race in the olympics, that sort of thing. I would get a data processing run
and I would first do a piece on who had been the leaders that week. Then I would
do a second run on the accumulated totals. That meant that even if a guy was
not consistently good, if he just hit occasionally, I'd get his name in the
paper which motivates him. Now the problem with most sales forces is that
80% of the volume may be done by 20% of themen. In order to motivate...when
all our bigshot sales managers wanted to run a contest they...I remember down
at Cape Coral they gave away a Thunderbird, and they gave away all kinds of
big prizes. But only the top guys could win them. What I did was establish
plateaus. Depending on what plateau a man hit he could win a prize. The
higher the plateau the better the prize. Not only that, but my first plateau
would usually involve making maybe one sale. I would give away something
like a pen. But the pen would say "Gulf American Contest Winner". A guy
could show it to the people he was trying to sell, he could show it to his
friends and so on. The higher they went the better the prize. Then I would
usually have prizes for the top three to five men that would be big prizes.
So the big guys could really be recognized. Those contests were very effective.
They would always have a theme. One time it might be baseball. Another time
it might be football. Another time I might make them all knights, lords, and
ladies. That kind of thing. I could use my contest bulletin as a means of
education. I could always have some stuff in there on either product or sales
tactics and so on that would, maybe, help a man do a better job. As a matter of
fact, a couple of my contests led to an administrative change in the Company.
When you have men out all over the country, there's always the danger of
selling a piece of property twice by two different people. The way they always
sold started with the home sit program and continued with the party program
was what we called t.b.a. (to be allocated). Meaning if you give a person a
specific piece of property, they gave you a specific size and shape, and they
would then be notified as to the exact piece of property. The salesman in the
field couldn't tell them this. What this meant was that a whole lot of non-
standard property started to accumulate. One day, Eddie Bryant, who was an
administrator, called me and said, "We have a lot of stuff that's just sitting
because we can't allocate it. Do you have any way of moving it?" I said,
"Sure. Send me up a list of some of these allocations and a description.
We can move it." He sent me some stuff. I dubbed it all preferred property.
I gave extra contest points, because I always used the point system, for any
preferred property they moved. The preferred property moved out first. Why
did it move out first? A they would be motivated. B all of the sudden
they had a specific allocation they could describe. And finally those lunkheads
down in Miami suddenly realized that they should have an inventory program
and an allocation program so the people in the field could sell something real.
D--So they weren't just selling general description lots, they were selling a
specific piece of property.
L--Right. Instead of selling something that lets say was 120 x 85, and that's
what you're going to get, they could sell a specific size, a specific location.
Our great opening gambit when the man made his first trial close was, "What
would you like, waterfront or waterview?" Because in selling you always have
to give people choices and nail them down on the choice. Or a guy would ask
...on our survey sheet we would ask them how much a month they could handle
comfortably. Now when the man tried to zero in, if he knew they had indicated
that maybe they could handle a fairly substantial amount, he could go for
waterfront, knowing that they were financially able. So they realized this.
Low and behold we developed a whole inventory system down in Miami. What we then
did for the party program was we would give each office allocations on specific
property. They would have an allocation sheet and I developed a standard way
of doing an allocation sheet so that it would punch up every piece of property
as being good. That's what they would work from.
D--So the sheets would be updated?
L--Oh sure. At every party. What they would do if they had sold something is
cross out what they had sold. It's very powerful when you show a customer
an allocation sheet and say, "Here's what I think would be good for you,"
and the customer see's these things marked sold. In fact, even if nothing
was sold, my instructions always were to cross out some of the allocations
for that night and mark it sold. Because psychologically it was effective.
We had an even better thing at selling Arizona, but you're not interested in
D--I'd like to hear a little bit about that.
L--In Arizona, at Rio Rico, we got to Rio Rico. We had another problem. It was
not like Florida where you can sort of put an overlay down and get most of
your standard lots right out of it. In Arizona you have very mountainous
country. You can only sell a parcel if there was an area large enough for a
building site. That meant you would have to drive in on a dirt road onto a
building site. That meant there was no such thing as a standard parcel.
Everything was irregular. You might sell somebody a whole mountainside with
60,000 square feet. In other cases you might be selling something very small.
There were other complications. Your pricing in a place like Arizona
depended to some degree on whether you called it hillside, or skyline, or
sloping skyline, or valley and so on. At first, when they started to give
us the inventory from Arizona, I asked the guys out there, "How are we supposed
tok sell this? Everything is different. Haven't you fellows worked out a
classification?" Well they hadn't. Every price was different. Everything
was different. And that's a very caotic way to work. So my first personal
problem was I didn't really understand the nature of the inventory. But
knowing how to read a contour map, I finally figured out how to do it. Now
I had my classifications. The crest was skyline, right off the crest was
sloping skyline, and the hillside we had, I guess, a ten percent was hillside
and so on. Out there you were selling view also. So I took all their
inventory and broke it down by first of all size, then classification. Then I
grouped anything from 5 to 10,000 feet in one group of a particular classifica-
tion. I kept going up and did this with everything. We established a footage
price in each classification. Let's suppose I had hillside. Some parcels were
only about 5,000 feet. Some were 7,500 and so on. They now all had the same
price. Now a salesman could say, "You're going to get 3,000 extra feet if you
buy this lot." Now the salesman, who had never seen Arizona either, had to
understand what the nature of their inventory was. The classifications I
established were descriptive, so they could start to understand what they were
selling. Now the allocation sheet wasn't a simple listing of property with
some marked sold. Now they had two ways to work with it. Instead of just
waterfront to waterview, they could describe the different types of inventory,
and they always were able to give the customer an edge a bargain. The
allocation sheet became the chief sales tool that they had.
D--At a dinner party would they sell just one particular property in other words
Cape Coral or Rio Rico...
D--They wouldn't mix them up?
L--They would never mix them up. You would either have the Cape Coral team, or
the Golden Gate team, or a Rio Rico team (which was Arizona), and so on.
D--How did they determine who would be invited to these. Had the people made some
L--No. Although we did a lot of work in trying to compile lists and get leads,
that became less important when we went to the party program. We needed the
leads to give the men for home sits, but when we went into the party program
fundamentally we were mailing geographically. We were using the post-office's
as demographics. We would mail into zip codes and so on. People would answer
this thing and that's the way we got to them. So it didn't matter what
property an office was selling. We still used the same technique to get them
D--What other methods were used to sell the different properties like Cape Coral
or some of the others? You had the dinner party...
R--The dinner party was the basic technique we used out in the field. But for
example, we had a booth at the World's Fair and we got a lot of names there
and put them into our systems so that the people could be invited. The big,
really big variety of selling techniques were used in Florida. Since in
Florida, fundamentally, the properties were...in Florida we can do lots of
things. Now one example would be we would have people at various attractions.
Let's say Ocean World, Parrot Jungle and so on. Our o.p.c.'s meaning
outside public consultant...what happened was I had dubbed our salesmen,
consultants. So when they had people to try to get units in, they were outside
public consultants. And the whole industry called their salesmen consultants
and called their canvasers o.p.c.'s. We would get a great many locations and
people would get invitations to come to a hospitality room. What was a
hospitality room? It was the equivalent of a party. It was a place where we
constantly ran parties. To get people in we would offer some sort of premium.
Even here we get our people in right now at Golden Strand with premiums.
That was one technique. That was a method. Now the various techniques that
we used to lure the prospects were quite varied. There were locations. We
had welcome stations up in North Florida. We, I guess, tried a great variety
D--What were some of the different kinds of premiums?
L--It's hard to remember now. Some were dinners. Some were radios. Whatever you
could think of we tried. Jack Rosen used to say, "This is a laboratory. We
have to pay for the cost of research." He would really try anything. Once
we hit something that he thought was good, like the party program for instance,
then Jack would really concentrate on making it cost effective. He wouldn't
worry about cost when we started it, but once we said something works, he
would really hit it hard. A lot of things did work. For example, we tried
getting people to the movie theatre. They would see a movie. I remember we
had gotten some Ozech picture that won an academy award I think it was, something
about slow moving trains I don't remember the name of the film. But we found
that the theatre program was no good. We couldn't close people. We couldn't
really...they'd come to see the movie and that was that. There is such a thing
as having too good an offer. So people will come for whatever the offer is,
but they won't do anything else. We really started the whole certificate
business, the so called vacation certificate offering people up north three
days and two nights. We established a fly and buy program with Travel Guild
of America. We had our own fleet of airplanes about four airplanes that we
bought from American Airlines. They were fast but they were high cost. We
would bring people in from all over the country. It was especially effective,
of course, in the cold states especially, it worked.
D--Did they bring them into Miami or bring them into Ft. Myers...
L--We would bring them into Ft. Myers and into Cape Coral originally. We also did
some for Golden Gate. In that case we still flew into Ft. Myers and bussed them
over. It was very interesting. For example, we tried French Canada. We got
lots of French into the closing room, but we couldn't sell them. And the reason
we couldn't sell them was fairly simple. We didn't have French Canadian
closer to sell them. Here at Golden Strand 80% of our sales are French
Canadian. But we have a French Canadian line. So that was an example of an
experiment that didn't work. It was a high cost program. Because first we
would run...we would send people invitations not really to a party, but to a
session at which they could take advantage of the offer. Therefore, instead of
sitting down at tables with the prospects, we didn't have to use sales rooms
as such. We could use the equivalent of an o.p.c. who would sign people up
for the flight. The flights were as cheap as $49.95, but they were usually
around $99.00. We lost money on them naturally.
D--So people would be invited to a little session to hear about this flight to
Florida and they'd get signed up for that. Then once they got down to Florida
L--That's where we tried to sell them. But we tried to let them know what they
were coming for. There again was the question of the invitation. I didn't do
the original invitation. They asked me to take a shot. Could I do another
conquistador? I knew I couldn't. But I did something we called "Flight Roll
call.""'Flight roll call"was an invitation that was a very professional direct
mail sell. It was no longer we were selling a product. What I did with flight
roll call was I really spelled out what they were coming for, and why we were
offering the flight the fact we were trying to sell them some land and so on.
I did outpull the others, but we got about twice as many people who once they
came agreed to take the flight, and a better sales closing rate because we
leveled with them in advance. But that was a piece that really went professional.
I had a little seal on the outside. I forget who we said was running this thing,
but it sounded very, very official. Conquistador I could still do, but flight
roll call would never pass the...
D--Did it sound like a government agency?
L--Yes. It wasn't that I lacked scruples, it was just that there were no
limitations placed on you in those days. Whatever you did, nobody disagreed
with as long as it wasn't outright chicaney. You could do almost anything.
D--Was that pretty typical of most of the land sales industry?
L--Let me put it this way. Everybody hired our men away because they wanted to
learn how to do our programs. So whatever we did was typical of the land sales
D--So people like General Development and stuff like that would hire them...
L--Even though General Development proceeded us, once we got rolling they followed
us. They hired our men. They imitated everything we did. Everybody did that.
D--So you don't feel like there was much competition from the other companies and
L--Well I think General Development were pretty good competitors. But we outstripped
everybody in volume. It seems to me as I recall, that last year when we were
GAC Properties we must have done about $200,000,000 gross. That sales is not
a story but it still put us out way in front of anybody. We probably did as
much as the next four biggest companies combined. We had that effective a
machine cranking out.
D--Let me ask you a question. What percentage, roughly, of the property, whether
Cape Coral or Golden Gate or whatever, was sold off site either at a dinner
L--Well, Charlie Hepner would be a better man to answer that question than me. But
to my best recollection we must have done at least 70 to 80% off site. What
they did at the property was fundamentally they were dealing with all these
prospects who were brought in by the various programs we had going in Florida.
But they had a third function. They had what we called a home site owners line
which was a solidification line. In other words when we sold, we had a travel
allowance for people to come down on their own. Because a lot of people,
naturally, would drive down. Give them let's say a nickel a mile or
otherwise. They were handled by this special line of men whose job it was first
of all to make sure that the sale stuck in the books. Secondly, if possible, to
upgrade, meaning to sell them a more expensive piece of property to have them
trade what they had bought for a more expensive piece. Or third, to add on -
meaning that rather than just selling you a more expensive piece of property,
to sell them at least another piece. We really had our best men in that line.
Those men make out like bandits. They...even though the standard was maybe one
percent, they were getting gilt-edged prospects in...getting people already
sold out in the field. This was a very important line. It was building the
book but holding your people. That was the name of the game.
D--Was that really stressed from up above?
L--Well, we established the line for that purpose. Another function was that we
always had a couple of guys that were working with that line well with both
lines now. with both new customers and the old, who were called Mr. Cash. Their
problem was to get a larger down payment. If possible, to get a full cash
payment. That was also very important not only for the cash flow, which is
always a problem in an operation like ours, but the more money you took the
more solid the sale. Remember originally it was $20 down and $20 a month. That's
not a very solid sale. As we learned more we kept increasing the minimum down
payments as well as monthly payments. Just as a side on this, the difference
between the men in the field and the men at the property, the first time I ran
an awards banquet) I ran it at Cape Coral while in later years we always ran
"them in Miami at big posh hotels and I'll never forget we had one guy from
'- St. Louis. I don't remember Nick's second name he was Greek American He's
down in Cape Coral. He's a good salesman. He's gotten the first award. I
had little globes with the slogan "A new world for a better tomorrow" translated
into Latin. I had very fancy awards. We take the men around on a tour...we
tour the customer and we tour our salesmen...and we come back and Nick says,
"Gee! I wasn't lying after all. It's all here." Which shows what kind of
guys we had. Think of it. Here's a man who though he was telling fairy tales.
And he's one of our top salesmen. That was the importance of the awards
program to get the people there. When we established Travel Guild of America
with the flight program, then it was easier to make sure the men knew what they
were doing. We would send men down on the plane to help handle the people on
the plane. They would get a chance to see the property they were selling.
But in these early days the awards program was very critical. Making sure
these men understood Cape Coral was a real place. You haven't been to Cape
Coral have you?
D--Yes. I lived there.
L--You lived at Cape? Do you know the history of that bridge?
D--Tell me about that.
L--I'll tell you about the bridge.
D--Before we get to the bridge let me askk you a couple of questions about sales
again. Didn't Gulf start a mortgage company and did they try to sell
mortgages to the people?
L--The original name of the company was Gulf Guarantee Land and Title Company.
It sounds very real estate...very conservative. We changed it to Gulf
American because when putting it into the stock exchange they wanted something
that sounded better. So first it was Gulf American Land Corporation then it
was Gulf American Corporation. No there was nothing of that sort. Maybe the
name made people think that. We did not give people a mortgage. We gave
them a contract for deed. Now a contract for deed is an installment sales
contract. You got a warranty deed when you had finally made all your payments.
I believe, I'm not sure, whether you can still operate with a contract for deed
even on land in Florida today. I know that for example, on timesharing we have
to give them immediate mortgage, which creates problems, because if people
then fail to make payments and they've gotten a mortgage, we have a big problem
getting the property back. If somebody stopped making payments, he'd forfeit
D--Maybe it was that they tried to sell mortgages to people who bought houses.
L--Oh, that's different. With houses it's always a mortgage. That's a different
story. But when you sold housing, people, remember, had the privilege of
getting the mortgage any place they wish. So I guess we had a mortgage company
but it was not an important factor.
D--The other thing about sales...who were some of the best sales people early
on and throughout?
L--First let me tell you who the best broker were out in the field. There was an
outfit that had the state of Ohio C-o-m-e-t- M-a-r-k-s. It was headed by
a man named LouRosen, who was a very excellent businessman. I would say
Comet Marks must have done $20,000,000 or $30,000,000 a year. Then in
chicago we had a broker called Herman Harris. Herman didn't do quite as much
as Ohio, but he probably did $20,000,000. His salesmen were power houses. One
of his best men, I remember, was Marvin Marks. This is Herman Harris's man not
Comet Marks. On the property...I remember they once called me up and said we
wanted you to do a contest for the property (Kenny Schwartz called me). I
want one of your dynamic contests. I said, "Kenny, what's the matter with you?"
"You're on the property. you have a bulletin board. The guys know how well
they're doing. In addition to that you've got a contest going where a guy can
win a Thunderbird." "I know that but I want another contest." The problem
with the Thunderbird and all that was that when a guy made a sale, he got an
entry for a raffle as it were, and all these sales managers all loved raffles
because their thinking was flash, they wanted this big thing. But I don't
believe in flash as being primary. That's very superficial. I believe in
motivating the man to compete against himself. That was the purpose of the
plateau system. So I said, "Look Kenny. Do you realize that when your men
get my bulletin it'll be two weeks after they made the sale. That's when
he's out in the field and it won't be any different for him. "I want it."
So I did it. And Kenny was right. Late or not late, it moved his men. In
that first contest the two leaders were two guys named Marvin. One was
Marvin Popkin and the other was Marvin B-a-u-e-r. In my bulletins being
written after the fact, these guys knew how everyone stood. But out in the
field nobody knew until I got a bulletin out. I started talking about...
since they were the two leaders and they both were named Marvin, I said,
"Who will win the title of El Marvo?" And to this day, Marvin Popkin's
license plate reads "El Marvo." In fact, when I came down to the Cape
for that first awards, Marvin said, "I want to see my p.r. man." I built
everybody up. There was never a negative. These guys had enough problems
without giving them anything negative. Who were some of the leaders? Well
Arnie Mann, who was our vice president of sales here, was one of our top men.
Arnie was a pretty good honest salesman I might add. Arnie is a very solid guy.
I'll say this. Arnie was like Willie Mays when he first came up to the Giants.
You probably don't remember. Willie Mays, I think, went for 24 when he first
came up. Arnie came up and...we had a sales supervisor named Jim Raskin. I
used to call Jim"the animal because I considered him that. he was uncouth,
ruthless. I must say one thing for Jim. He saw something in Arnie. Arnie
kept blanking and he though Arnie would be one of our best men. He would bring
Arnie home at the Cape and drill him and drill him. When Arnie finally broke
through his first sale he couldn't stop. I must give Jim credit. He saw
talent. He was patient. He developed the man, animal or not.
D--Who were the best sales people at some of the different sites like Golden Gate?
Or did you have any?
L--I'm trying to think. It's a pity that you haven't interviewed Sey Reis. Sy
was our personnel scout in Florida. He would remember what every man did.
There was a guy named Kingsley. I don't remember his first name. He was very
good. Especially with spanish speaking people because he had lived in Latin
America and he was very fluent in that language. It's very hard now. I wasn't
at the properties living with these guys. I only remember names of men who
were from my contest bulletins. Let's see. One of the men that was very good
was Manny S-t-a-m-i-t-o-l-e-s. I used to call him Stam the man. Something
like that. Everybody got a nickname. Bob Carroll would remember them better
than me. Bob was more into it. I mean Bob was in sales administration.
It's difficult for me to remember.
D--That's all right. We can...
L--Names are my great weakness and I've aged.
D--It's my great weakness and I haven't aged!
D--Were you over the sales people in international sales? In Europe...
L--Well, at one time no I had nothing to do with international at one time
Sey Reis was in charge of international.
D--So it was a separate...
L--We used a lot of our state side people to head it up. That, we really ran
as a separate division. In fact, Marvin Popkin was sent to Mexico. The big
problem was he spent too much money. Marvin was a wild man. But Sy Reese
was in charge of that division. I don't know where Sy is. He could tell you
about international and probably give you a long list of top salesmen. He would
D--Just to review, you were over all the sales people in the field to motivate
and supervise them?
L--Yes. And I also played some role in Florida with the properties. Because
they wanted it. Florida was like a separate empire. Therefore, I really
couldn't do anything for Florida unless they asked me to. If Kenny asked me to
do something, fine, I would do it. We controlled Florida only to this degree -
that Jack and Charlie controlled Florida and spent a lot of time their. But they
had to deal with Leonard. Florida was just dealt with separately. Eddie Pacelli
was a vice president. Eddie was really in charge of Florida directly.
Certainly he was in charge of Cape Coral originally. Usually Florida wanted
D--Who did you answer to? Who was above you?
L--I worked with Charlie Hepner. I answered to Charlie basically and Charlie
answered to Jack. You might say I was Charlie's right arm.
D--You were going to tell me a little about the Cape Coral Bridge.
L--Cape Coral Bridge. First I'll tell you a story that I heard from Kenny.
This will illustrate how smart the Rosens were. In the early days of the
Cape probably in 59 when they were planning it, Kenny and Leonard Rosen
were at the Cape with somebody from the county. They wanted to establish what
the standard for the roads would be. Kenny didn't like what he was hearing.
He wanted lower standards. He felt they were being much too demanding. Leonard
shut him up. Leonard hoped and waited. We'll do the roads their way. We want
better roads not inferior roads. For a pirate this is pretty good thinking.
Leonard's attitude was who knows how long it will take us to sell this place.
Looking down the future it's better to put the good roads in now than later.
Leonard and Jack gathered and decided they ought to have a bridge. Because to
get to Cape Coral, originally, you had to go miles (15 miles) to get around to
the Ft. Myers bridge. So they plotted, first of all, to get the government's
approval and support. But what Leonard did was he bought the rights of way
across the river in Ft. Myers right down to the connection with I guess U.S. 41.
When they finally approved the bridge, it involved our donating the right of
way, which they did. Again, it was farsighted. It was intelligent as hell. He
was willing to give something away to get something he knew would be of
incalculable value. That bridge was the key to Cape Coral's growth. They
were no slouches the Rosens.
D--Just aside from that, yesterday they began work on a parallel span to that
L--No kidding? I guess now with 55,000 and growing they need it.
D--They're working on a mid-point bridge too. Halfway between the Ft. Myers
bridge and the Cape Coral bridge.
L--The Rosens are really responsible for that. They understood the need. They
understood that if you want to get it quickly, you have to cut through and
settle some of the legal problems that the state would otherwise have -
mainly land acquisition. They gave the right of way on Cape Coral side and
they bought the right of way on the other side.
D--Did you know Jack Rosen pretty well?
D--Tell me a little about him. What kind of a man was he?
L--Jack was a man with very high ideals. He was troubled by the fact that he never
had a college education. But he was a man that read greatly and read good
stuff. Who was the guy that wrote Excellence the guy that founded Common
Cause? I can't remember his name. Anyway, when Excellence came out, Jack
gave that book to every one of his executives. We had some seminars on it.
He aspired to be a benefactor. He had great faith in what Cape Coral could
be. Even though I've indicated Leonard appreciated quality, Jack was much
more concerned with it than Leonard. The biggest problem in Jack's life was
that he could never compete with his older brother. Somehow Jack could always
beat everybody else but somehow Leonard could always break Jack down. It was
really sad. As far as I'm concerned, in essence Jack committed suicide in
his goddamn. frustration with Leonard. People commit suicide in different
ways. Jack did it by ignoring three heart attacks and so on. At the same time,
when it came to running the business,...let me backtrack. Jack was a man
who took pride in the fact that he could take all these aluminum siding men,
carnies like Lester, guys with criminal records he could take all this dirt
and turn it into gold. He could make these guys assets. He could use their
talents. This is a very difficult thing. The problem is control. How do
you control these people? He prided himself in the fact that he could really
exercise control. He could control the Lester Morriss, and the Harry Dempseys
and all these other guys.
D--How would he control them?
L--Don't ask me because if I knew how then I could control people.
D--Was it based his personality?
L--Dased on more than personality. He knew when to hit a guy, when to encourage
a guy, when to pull the reins, when to give the guy freedom, and he understood
that he had to have control in the organization as well in order to do this.
But he could have all these key people who nobody else could have possibly
built a company with Jack could do it. Leonard was different. Leonard
didn't give a damn for anybody. I remember once I brought maybe a couple
of hundred stockholders down on a special trip. Before we flew them over to
the Cape we came into Miami, brought them into the building, put them into
the art gallery, and Leonard in his inevitable fashion comes in in his tennis
shorts and tennis shoes. He was an arrogant guy. He loved to flout people.
That wasn't Jack. Leonard didn't give a damn what his swingers did. Leonard.
really had no scruples whatsoever. Jack had scruples. But still Jack did
what had to be done. Jack had a lot of imagination. He listened to people
who made suggestions in programs. And as I said, he was willing to spend a
lot of money to experiment. He had this attitude of this is a laboratory.
Both the Rosens seemed to be inspirational toward their men, but I think Jack
was a guy who inspired loyalty. Leonard gave a damn for nobody and everybody
knew it. Jack cared. People knew he cared. So people were very loyal to
Jack. I don't know how many people you have spoken to. I'm sure they all
had a lot of positive things to say about Jack. I don't know how many took
shots at Leonard, but if they were honest they would have. I would say that
to some degree sums up Jack. He was a man of real intellect. He wanted to
have a philosophy in his organization as well as for himself. He worked very
hard at trying to improve himself and his people. I was kind of an odd man
out in that organization. Not many of our people were college graduates.
d--Where did you go to college?
L--I went to Brooklyn. And not many people were as square as I was because I
refused to get involved in some of the stuff these guys did. Some of their
shenanigans. The only reason I guess I could supply for the organization was
that I could produce and people knew it. When they had a problem they thought
I could be involved with, they all wanted me involved. Jack believed,
very much, he understood the need for communication within an organization.
That was one of the big things he wanted me to do in terms of the whole field.
But even in Baltimore, we used to run a weekly meeting. We might have 45 guys
in there. They were all department heads. I used to run the meeting. The
problem that challenged me, of course, is how can I make sure that everybody
gets a chance to talk. At the same time we really have problems and maybe
had start some solutions. I had the advantage of having been in war department
Information Education Division, with an orientation branch. I had precisely
faced this problem in the army when we were first developing the troop discussion
program. In essence, Jack never knew that. I never told him that. When he
put me in charge of the thing because he thought I could do it, that's why I
could do it. I had had a comparable situation with a lot of experience.
And believe me, dealing with the brass is a lot tougher than guys in
civilian life. At every point Jack understood that information was the life
blood in an organization. Jack used to say, "I cannot command when he want
to do this and that..you cannot command only persuade." He understood what
his powers were and what his clout was. But he also understood what was the
essence of real leadership. You don't just tell people to do things. They
must believe. I don't know if Leonard understood that, I sort of doubt it.
But Jack understood it very well. It's one of the fundamentals of leadership.
You must persuade. You can't just say do this do that. You can't be a little
dictator because ultimately you'll foul out. I never knew Leonard as well as
Jack. My reactions to Leonard were minimal conversation. I should say
something about Golden Gate or Remuda Ranch. Golden Gate was an environmental
disaster. But it wasn't because we wanted to...although you want to be in
the history books? Mel was one of our best salesmen at the property. There
was a terrific data processing guy named Dave Isaacs. Dave's talent...Dave
could'nt write a program. But his talent was he understood the equipment to
begin with the IBM equipment they always had the latest and he understood
the business. When someone wrote a program or worked on the system, Dave
would always look ahead. He would always insist on them putting things in
that they hadn't dreamed of, which he knew would be necessary so that we
could extract the information we would need at some future time with different
programs. Dave was a genius at that. Good man. Back to Golden Gate.
The environmental disaster. We though we were doing great things for the state
of Florida when we were going to drive those canals and drain that property.
Now that the environmental movement...people don't realize that back in the
60's people didn't know very much. I didn't know very much and I was very much
attuned to that sort of thing. Today it's an environmental disaster. We
drained we did the job too well. We had a problem with Remuda Ranch.
I resigned from the Company bver Remuda. They decided to sell Remuda Ranch.
I went into Jack and said, "Jack, we're selling swamp land. It used to be that.
when my friends up in New York would ask me what I was doing, and I told them
selling Florida land they'd say, oh yes, selling land by the gallons, right?
and I set them straight. If anybody says that to me about Remuda Ranch, I
cannot contradict them. I don't want to be associated with it."
D--When did they start selling Remuda?
L--I can't remember the exact date probably late 60's. There were other
people who felt as I felt. Jack made a personal pledge. He said, "We'll
drain Remuda. It will be dry." Well, when the Company was sold to Haywood
Wells, GAC Properties, there was a $7,000,000 reserve in that financial
statement for the purpose of draining Remuda Ranch. Jack was a man who kept
his word. But again, little did we realize, that it would have been a dese-
cration to have done it. Well, the environmental people in Collier Country
took care of that. They blocked us from draining it. It wasn't that we
were malicious or put profit above all else. We thought we were doing good.
It was only in later years that we learned we weren't doing good on that score.
We thought we were showing a pretty good set of ethics. Actually we were,
except we were ruling them on the facts of the past so to speak.
D--What happened once you block and drain it? Was that before GAC took over?
L--Yes. When GAC took over we hadn't drained it yet. Now we got blocked -
when GAC took over. Now the problem became what to do about all that swamp
land we had sold to people, since it now could not be drained. You might
use it for various purposes, but you wouldn't build homes in it. So we
developed a program of exchange. We offered people property up in Poinciana,
which is near Disneyland, which is quite dry. We offered property in Golden
Gate. A lot of people wrote in and said you're trying to swindle me, I'm not
going to give you that land back. Again, we were trying to do the right thing.
Some people really got stung because they didn't believe us. It wasn't that
we were so pure, it just made sense to do this.
D--Originally, was the idea to sell the 'tracts at Remuda for homes o0r Wa c r-c-o
L--We were selling acreage. Unless you have a final end use of occupancy, you're
not selling anything. Now of course you realize that our men however weren't
selling that, they were selling money. They were selling leverage. I'm sure
you heard a lot about that. They were selling resale. Lester would do a pitch
up front where he'd show them their paper proft, so to speak, and he used the
word paper profits. Now, after a year I had not quite doubled in value. They
were tempting people with greed. When they showed Golden Gate for example,
their slogan was "Buy by the acre...sell by the lot". They would show the
customer how you could buy a five acre track and get twenty lots out of it.
You could make a huge profit.
D--So people would come in their and hear this speel and they maybe would even
know what the land looked like. They would just think down the road that
someday I'll be wealthy because I'll be able to resell this.
L--Yes. Because that's the way they were sold. Now let's take Remuda.
We would bring people into Remuda. We had a magnificent club there. They
couldn't go out into the swamp and see the actual land they were buying, but
they had all the glamour and glory of this wonderful place done in spanish
colonial. It was a terrific set up. They were being so greedy. They were
being so resell. They would get restless and say, "Well now if it's doubled
in value, and you've only put in $x then we can resell it. Think of the
profit. The quick profit you could make. All of the industry went that way.
It was selling investment.
L y L 25
D--So General Development did it? Did all the rest do it?
L--Everybody followed this show. None of them had scruples, believe me. There
are some scruples -in the land businessin that if you're selling swamp land,
or at least land that's ponded. At least you'd be frank with your customers
about what you're selling them. That's scruples. But you had a lot of people
in Florida that simply sold the swamp land and probably told people it was
high and dry. When the state finally started to come in in the federal
government, you had to do a property statement, saying these things. But the
Companies selling had to be conscious of the fact you had to try to be somewhere
near the truth. Your real problem with these salesmen was that salesmen would
tell any lies. I hate to think of how many salesmen there were who said to
people, "Look. If you don't like it the Company will take it back because
it's so valuable. It will be so valuable by that point the Company will take
it back." The Company wasn't going to take back anything. That was against
our policy. We never said we'd take anything back. If there was a lie that
could possibly be told to hood wink people, these salesmen would tell it. It
wasn't just the guys that would come from aluminum siding or that kind of thing,
they were all like that. When new men would come in these guys always chose
the easy way to sell. It takes a good man to sell and sell responsibly. We
did a lot of training. We made a lot of effort. We didn't want these problems
with people saying, "But the salesman told me you would take it back," and all
the other problems they created. There is one element of control that is almost
impossible to cope with.
D--Was the bugging of the rooms at Cape Coral an attempt to...
L--The purpose of bugging the sale rooms was not really, originally, to control
the salesmen, because the management at Cape Coral was not that concerned.
The reason they put the system in was the same reason why the automobile dealers
do it. They did it long before we did it. It was when the salesmen walked out
of the room to let the husband and wife talk to each other, we wanted to be
able to listen in so we knew what their doubts or problems were, so when t.o.
man walked back in he could go straight at the target. That was the fundamental
purpose. When the time arrived and the government started to crack down, we
knew that we had to try to alleviate the problem. To some degree you had to
listen to see whether they could and find out who were the most flagrant people,
and who were telling lies that we were not tolerate. The problem was that
there heart wasn't in it. They would rather throw it against the wall.
There weren't many guys like Arnie Mann who I think was a pretty honest guy.
You know it was in Excellence where the writer said that it is the leadership
of society who set the tone. And in any company, it's management that sets the
tone. Our property management, all our Florida management, were not at all
concerned with setting an ethical tone. That was part of my problem. It was
always a battle within this company between the swingers and the guys like me
who said, "You're going to far. This is not right. We don't want to live a
lie." Always a battle. They usually won.
D--Who were the top management? Was their a manager for each property?
L--Yes. For each property.
D--Kenny Schwartz was the manager of...
L--Kenny originally was the manager of Cape Coral. Then later it was Ed Pacelli.
As I remember, Eddie was in charge, at one time, of all the Florida property.
He had overall management also at Golden Gate and so on. Mel had named some
of the managers to it. But it's too low to go. I didn't really look at any
of my stuff to see...my bulletins...to see what names I used.
D--Tell me a little about River Ranch? What was the idea behind that whole
L--First of all, there had been a struggle between Jack and Leonard. Jack wanted
to build more Cape Corals. He wanted to build cities. Leonard argued, and he
was supported by Pacelli, that it's much easier to sell unimproved acreage.
It's cheaper and you can do greater volume. That's an example of when
Leonard overcame his kid brother. That's why we had Golden Gate. That's
why we did Remuda. We went to River Ranch and it was the same idea. We were
going to sell acreage even though we had an area set aside to build homes.
If you couldn't tell a story about a community, you couldn't sell the acreage.
So Golden Gate Estates had to sell you Golden Gate. I don't know how many
people are living there now, but it's growing, I understand. It was always
a question of what theme we would use. At Cape Coral we didn't really have a
theme. Of course that was our first one and it was a city. And Golden Gate
was the second one and again, it wasn't necessary because it was primarily
acreage. But when we went to Remuda, for example, the theme was Spain was
spanish colonial. So we went to Remuda, that was up in cattle country.
Florida used to be the second largest cattle raising state in the country,
second only to Texas. Up to that point, Florida was where you had most of the
D--You're talking about River Ranch?
D--That's up in Polk county.
L--Yes. That whole area of central Florida used to be cattle country. I remember
when I was in the army I was stationed at Blanding for a while. We would take
out a truck convoy and we would have cattle blocking us on the road. So they
decided to do a western theme. So they called it River Ranch and they did it
western. That gave them the basis for how they would ... decor, we had stables
here for riding and that sort of thing. We stocked River Ranch. It was a
great hunting area and we even did some stocking with some animals. That was...
D--Again, River Ranch was not intended to be a city.
L--They weren't going to put any great effort into River Ranch. River Ranch is in
the middle of no where. At least Golden Gate was on the gulf. Remuda is
basically on the gulf. Cape Coral is on the gulf. Pointseanna is near
Disney World. Remuda is near nothing. The land was cheap. They primarily
sold acreage. They sold it with the same arguments and the same promises.
You had this western theme.
D--Tell me a little about the time period in 66 and 67 when the land sales board
was starting to get it more critical of...
L--Well, if Leonard hadn't been so arrogant, we'd probably had not have been hit.
But here's a point. The abuses of the land industry were now a nation wide
scandel. There had been many exposes. The State, in its own protection,
was being pushed to go after the worst of the people. With any regulatory
agency, federal or state, when they have a job to do they normally go after the
biggest guy. If they could control Gulf American and knock us on our ear,
they would be hitting a substantial part of the whole industry. Because like
I said we were bigger than the next four combined, including General Development.
So they went after us. Leonard thumbed his nose at them. He was arrogant as
hell. We were the prime target and of course he managed to antagonize them.
S Claude Kirk, who was the first Republican governor I think since Reconstruction.
Jack and Leonard were Democrats. Leonard had provided all sorts of help to
the Democratic candidates. We had this great bank of phones and they were able
to use it in the campaigns.
D--So they let the democratic candidates use the phone banks to help...
L--Sure. We put people on to do it. Not just volunteers. And Kirk, of course,
these guys really worked against him, he really wanted to get them. I think
it would have softened the blow if Leonard hadn't persistently more or less
laughed at them, thumbed his nose at them, wear a big chip on his should and
say, "I dare you to knock it off," and that sort of thing. Then the Rosens
did something I think was stupid. We never went to trial. But they took
a consent where they admitted guilt. Which was stupid because they didn't
have to. If it had been me I would have fought the thing out. Once you're
in a fight you fight. They were afraid of going to jail. Kirk and his
people were very frank about saying, "We're going to send these Jews to jail."
Charlie would have a better grasp on that story than I do. He was much more
involved. More knowledgeable about it. In spite of having to put it on our
property reports, we still outstripped everybody else in sales.
D--Do you feel like the investigation was more motivated by Kirk than...
L--I think the investigation to begin with was motivated by an intolerable
situation. So that objectively, there was a reason for an investigation,
good reason for it, and when there was a good reason for a thing, it is
ridiculous to impune motives even if motives are there. The job had to be done.
However, I would say that vigorous effort to prosecute as opposed from
investigate was very much involved with the relationship with Claude Kirk.
And that's that.
D--Were there any comments ever made about Elliot Mackel being on the board and
his role in that as possibly being...
L--I never heard of them. Yeah, come to think of it yes. There was a good deal
of cynicism on our end. Mackel was a Republican. Therefore he was put on the
board. He was the largest of our competitors. He certainly had no affection
for us. I'm sure that the course of events that Leonard had managed to personally
...I'm sure but I never witnessed it...I'm sure he managed to personally
antagonize Mackel. That would be typical of Leonard Rosen.
D--When did it become clear...even before that...how badly did the thirty day
suspension of sales and stuff effect...
L--Oh, it hurt us. I cannot quantify it. To begin with we lost thirty days. But
beyond that it demoralized people. We obviously lost personnel. We had to
put the information in red on our property report. It hurt us. It hurt us
considerably. No doubt about it.
D--Was it near that time that discussions started to come about about the
possibility of selling out?
L--Let me put it this way. When we moved our headquarters from Baltimore (our
marketing headquarters) to Miami, I knew damn well that that consolidation
was a move designed to pave the way to selling the Company.
D--When was that?
L--We came down... let me think...I think we moved in 67. Because we sold the
Company in 68.
D--Was it before or after the suspension? Do you remember?
L--That I don't clearly recall. I don't know if it was before or after. But I
knew damn well that this was a preliminary to the sale. I said to Jack, "I
won't come unless you make me an officer of the Company." If you're going to
sell this goddamn company, and don't tell me your not, I want whoever takes
over to know that I count for something. I don't want to be just the promotion
director. I want to be an officer.
D--So what did they make you?
L--They made me assistant vice president. I later became first vice president of
GAC Properties. It was important they did that. Very important. When GAC
took over, they thought that I was an officer. Charlie could say, "Look,
Leonard's an important guy. We need him." Well if he's that good well he's
an officer. If I wasn't an officer there would have been problems.
D--So how long did you stay with GAC?
L--GAC took over in 68. I believe it was May 30 or 31 of 1971 that we had black
Friday. They fired Charlie, Marty Rolnick me, Lester, Vic (the head of our
phones), Bill Baron (who was our movie producer), there were seven of us in all.
All key people.
D--How do you spell Marty...
L--B-a-r-o-n. His real name was some long greek name but he went by Bill Baron.
I can't remember Vic's name. By the way, the phone room was really the most
unprincipled part of the whole company. It did a lot of business.
D--What would they do?
L--A phone man, if you think that a direct salesman would tell lies, he doesn't
have the imagination of a phone man. We had a boiler room operation. They get
people who are willing to tell any lie or any untruth. That was just as true
in our firm too. They were totally unprincipled people. But that's the nature
of that beast.
D--Did the phone room operate throughout pretty much the history of the corporation
and into GAC?
L--I don't know when Jack actually started a major phone room operation, but I
would say pretty much through because the Rosens believed in the phone as a
method of getting sales. As the mail became less effective and more expensive,
the phone became more cost effective by comparison. Even today, one reason
why, I don't know what your phone is like but I get calls all the time, and
the reason they're doing it is because it's less expensive today to use the
phone than to use the mails.
D--So in the phone room they would actually make the sales over the phone? And
what would they do, send a contract out to the people and they'd sign it and
send it back?
L--Yes. They would have an elaborate contract package with all kinds of literature
and what not in it. Then of course, people would have a fly and buy
or drive and buy agreement, and when they came down it had to be solidified.
D--Was there a pretty high cancellation rate?
L--Yes. The phone room had the highest cancellation rate in the Company.
D--Any idea what it was near?
L--No. Even at that, they were profitable. The Rosens built a book, book
being your customers who made payments. We were always in a negative cash
flow situation. The moment the book caught up, we suddenly could break even.
They would go out and do some kind of expansion to put us back in the negative
cash flow position. Leonard was a financial man. He had a deal at the bank
to finance this. Truth in Lending was a problem for us, originally. It was
such a revolution in what you had to put in the contract.
D--So Leonard would use that book, in other words, to borrow again?
L--Sure. At all times. Leonard could not stand getting into a positive cash
D--Why was that? Any ideas?
L--I don't know. They believed in expansion. They believed you always have to
grow and you grow by spending the money. You don't put it in the bank, you
spend it to get more sales. By the way Jack...do they still have the Cape
D--No. That was destroyed and they're building houses over there now.
L--That was Jack's idea and he was the guy who wanted all the sculpture. And
it was some pretty good stuff that he brought there, and so on. Jack was a
very creative guy. I wanted him to do bible gardens. Yes. I felt it would
be a lot more colorful. But I guess it would have narrowed the appeal. Then
we had waltzing waters. Do they still have that?
D--It has been moved twice, but it's indoors now over on 41.
L--We used to do that show. I used to name all that stuff.
D--Who was responsible in the corporation for purchasing additional land and stuff
like that. Was that all Leonard?
L--Basically that was Leonard. But I don't know what role Jack played in that.
Leonard was the guy who really, I think, initiated the process. He was
responsible for our going into Florida. You know he came down here for his
health. He immediately decided to get in the business with a real swindler.
What the hell was his name...
D--Are you talking about Milt Mendelsohn?
L--Yes. Milt Mendelsohn. Milt went to jail later for his own projects. Leonard
was too smart to do what Milt did.
D--Did you know Milt at all?
D--What was he like?
L--Street fighter. Smart guy. Life master in bridge should have known better.
But Milt had no scruples.
i JL 33
D--Who do you think, besides Jack and Leonard, was the most important people
in the organization? That helped make it successful?
D--Why is that?
L--Well first of all he is one of the few guys that could work with Jack. He
would sit there for six or eight hours a day if necessary, and not go crazy.
Charlie also has an advertising background. Charlie is a very good organizer.
Very creative. He understands the need to solidify your operations, to give
it some substance as it were. Charlie and I used to work, for example, on the
commission programs together. Commission programs the way they're
structured is very critical because you've got to structure it in such a way
that you motivate the men to do the right thing. And also so that you could
protect yourself against these swingers. Charlie really got into every phase
of the operation. Every property. I would say that next to the Rosens
themselves, Charlie was the man that was most important in doing it. Now
a lot of the swingers were important. This was a very dynamic organization.
I remember that GAC marveled and couldn't understand how we could be so
dynamic and have developed the loyalties and so on. Lester Morris was very
important. Even Ron Nitzberg was important.
D--What did he do?
L--Ron was basically in the national program working with everybody. The officers,
brokers, and so on. But Charlie was the back stop. Charlie was a solid guy
who could understand all these crazy things, and could tie them together
pretty well. When Jack died, somebody had to do the job. Charlie was the
guy that would do the job. And whom everybody respected. He worked very hard.
Still does. I don't know what other people I would say were really critical
in the success. We had a lot of people on intermediate management levels who
did a very good job. For example, Tony Perecci handled the mailing room.
I had mentioned Dave Isaacs, who was so excellent in data processing. But on
the very top it was Jack, Leonard, and in my opinion, Charlie. Milt
Mendelsohn was a very key man in the early days. Because he showed Leonard
how to do it. How to put it together.
D--How important were some of the people like Connie Mack and Bill Stern as far
as giving the whole sales operation a legitimacy?
L--It was very important. They were front men. Connie today won't even talk
about...oh you talked to him. He's ashamed. He has nothing to be ashamed of.
He lives in Cape Coral still doesn't he?
L--Well anyway, there's Cape Coral a monument to the really positive feelings.
He was associated only with Cape Coral. I don't think he has any reason to be
ashamed. But, you know, Bill Stern was a spokesman a good one. But that was
their importance. To give us a front of celebrity, really. It's not just
respectability. You can get all sorts of people for respectability, but
afterall, Bill Sterns name and Connie Mack's name were famous. Not that
Connie did anything to merit, but his father did. So Connie Mack was famous.
And Bill Stern, everybody knew. Celebrity is very important. Connie Mack was
not a bank president. People believe in celebrities.
D--Which of the operations in the Corporation were done in Baltimore, and which
ones were done in Miami?
L--What do you mean by operations?
D--As far as marketing?
L--Marketing was done...well here's the point. First of all I said Florida was
an empire unto itself. So everything directly effecting the properties in
Florida and in the o.p.c. operations and all that kind of thing, was done in
Florida. However, Jack and Charlie controlled it. They were down there all the
time. But that meant that Leonard had a much bigger hand in what happened
in Florida than nationally, in which he had no influence at all. Nationally
it was all Jack in charge.
D--Were there any operations that were just strictly in Baltimore, like advertising
or anything like that? Or was it all scattered.
L--Unless it was something that had to be done for local purposes in Florida,
everything with respect to marketing was centered in Baltimore with Jack.
D--When they hired new people, was that all done out of the Baltimore office?
L--No. They hired in Florida. It depended on what you were hiring for and where.
Jack was always a great talent scout. I remember when he was training some
executives, trying to influence them along with this Excellence thing. He
brought in guys from the State Department to talk to us. They weren't much.
They really didn't understand what we were doing.
D--Was there a particular inner circle of people, that when they were making
big decisions, that the Rosens would call to Baltimore or call to Miami and
get folks together?
L--Well, I'm sure that Eddie Pacelli played an important role. It was the two
Rosens, Jack, Ed Pacelli, Milt Mendelsohn when he was with us (before he went
on his own). But who else would have had that regular a key influence, I'm
not certain. Those five people certainly. Because Pacelli was very
influential. Very important to them.
D--How important was Tom Weber?
L--Well, Tom was the man who had to build everything. He was out chief engineer.
So to the degree that a chief engineer is in engineering is important, Tom
was very important.
D--Was he just an employee or was he...were the Rosens ...
L--The Rosens had great respect for Tom. He was an employee just as Hepner and
Pacelli. But they had great respect for Tom's knowledge and his ability.
If good things were done at Cape Coral, Tom did them. The Rosens may have
let him do them, but Tom did them.
D--What was the motivation for Gulf buying other companies like Guild Life
Insurance and Congress Inn?
L--First of all they thought they could make a profit. Secondly, they wanted
to sell the Company. They wanted to have a package. A diversified package.
L L(f1 36
By the way, Congress Inn did all right with the Rosens. The insurance company
brought a profit to GAC when they took us over. They did very well with out
insurance company. We had standing and the rights to do business in most of
the states. It was a valuable property. But when they wanted to sell it, they
wanted this package. I had even forgotten about them.
D--There was a lot of newspaper coverage on their attempt to purchase a company
L--Oh yeah. I remember the story. That was part of this desire to put this
package together for Wall Street. As I recall, they used Smith Barney when they
were first trying to sell the Company. I'm not sure now. I think it was
Smith Barney though.
D--Who was the Paul Venze Agency?
L--Paul is a first cousin. Paul's agency was really a house advertising agency.
Paul's group really did most of the work. When I did that conquistador
invitation, I used Paul's people to get it done. I didn't have any artists.
I did need the copyrighters. But I had to work with his people to produce
them. Paul, therefore in essence, was purchasing, printing, and what not.
But it was a house advertising agency. Paul was a very nice guy.
D--You talked a lot about mailouts and telephone calls to contact people. Was
there ever very much advertising done over the radio or t.v.
L--Yes. In the early days when we were home sit, we had to have specific names
given to our salesmen all over the country. We did heavy response advertising.
Mainly it was print. But the Rosens were pros in t.v. Guys like Lester Morris
and Harry Dempsey had done t.v. stuff. But we never found t.v. in those days,
as cost effective as print advertisement. Radio? They're experts at radio
too. They do that long pitch. Jack experimented, but it didn't work for
land the way it worked for lanolin.
D--Who was Rader Associates in Miami?
L--Rader Associates...I think they were architects.
D--Who was Bernice Freiberg. Tell me a little bit about her.
L--Bernice was a Baltimore woman who, again, had been with Jack and Leonard at
the original enterprise and came over. She...her mission really was to get
leads in every possible way. I think Bernice was very open to ideas. She
was highly motivated. The only woman who had a high position in the organization.
Not very well liked, probably because she was a woman who had a lot of
authority and could push as hard as any of the men.
D--She was in advertising?
L--Her job was lead procurement. That meant that she could use advertising, or
any possible technique we might have or think of to try to get leads.
D--So she had a lot of latitude as far as what she could do.
L--Oh yes. Of course, she was in constant touch with Jack. But yes she had lots
of latitude. She was a very hard worker. Very pathetic.
D--What do you mean?
L--Well I don't think that Bernice got very much out of life. It wasn't that
she was a career woman, I just don't think that Bernice...I think Bernice
had a very narrow circumscribe sort of existence. She made a lot of money.
She did very well in that material sense. I often ask myself, what are these
things worth. I wish I'd have made more money. I'd have been a little more
greedy. But still we live comfortably. I wish I made a couple of million
dollars and I could travel freely, but what the hell.
D--Something totally unrelated. Was there evidence of anti-semitism against
the Rosens and against Gulf American because of the Rosens that you ever saw
or heard about?
L--At this date I couldn't be specific. But my answer would be yes. Especially
with regard to Kirk and his staff. Did you see the Leo Frank program this
L--Oh you didn't? The Murder of Mary Phagan?
L--We were still in the south. I know the south fairly well. I used to run a
factory in southwest Georgia. One of my various
D--Some people that I've talked to in Cape Coral that have lived there wonder why
there's no blacks in Cape Coral. Was there efforts. Did salesmen just go off
on their own and prevent blacks from...or discourage them from buying land
L--Let's put it this way. They didn't encourage them. Your black market is
small enough as it is in relation to their finance and capabilities. But they
were very aware that people who were going to retire in Florida, as a whole
(being American) would be prejudice against blacks and didn't want to ruin
the neighborhood. We used to call blacks double x's. We never talked about
blacks. Double x's. And the salesmen simply didn't encourage them. I'm
sure that today, there would be a different attitude because the country has
changed. But rather this, the Voting Rights Act wasn't passed until Lyndon
Johnson succeeded Kennedy. And the Voting Rights Act, which the Kennedy's
understood very well by the way, is responsible for tremendous changes in the
whole political climate in the south. With the change in political climate
goes a greater tolerance. It didn't exist then.
D--Tell me a little about...I understand that Leonard and Jack did a lot of
charitable giving and stuff like that.
L--Well, they were orthodox Jews. They always supported, basically, the parochial
schools. Both in Baltimore and here. And yes they gave a lot of money. They
didn't have to be pressured. They helped to raise a lot of money. I often
wonder why a guy like Leonard would have been such a big supporter of Jewish
education, because I never felt that he really gave a damn about the ethical
lessons and precepts of the Talmud But they had great reverence for the
Torah (which are the Pentateuch The first five or six books). They had
great reverence for Jewish education. And they worked very hard, actually
at trying to be helpful. Both of them. I guess they liked being big shots
in the Jewish community.
D--I understand Leonard gave quite a bit towards the State of Isreal.
L--Oh they both did. They were very convinced they felt...I remember when I
first met Jack in the interview. he must'have spent two hours with me when I
was in his office I said to Jack, "Look Jack, don't try to sell me this stuff
about the Torah and stuff. I'm a non-practicing Jew myself. I'm a nationalistic
non-practicing Jew. In fact, Jack, if you want the damned truth, I'm an
atheist. But it doesn't matter to me. I'm not ashamed of being Jewish. I'm
not trying to walk away from my heritage or my background. I just don't believe
like you do." I remember Charlie told me that when it was all over Jack had
said this guy could either the biggest bust we ever had or one of the best
guys we ever acquired. Because no matter what he threw at me) .remember his
methods of control also involved attacking people) I just 'threw- back.
D--I understand that the Rosens collected a huge art collection.
D--Tell me a little about that.
L--I forget the name now of the guy they used to acquire the art. He had a
gallery in Palm Beach. I don't remember his name anymore. Anyway, they
gave him a lot of money to go out and buy Latin-American art. They went
very heavy on Mexican art. They had Sequero's, Rivera, Arusko, really the
very best. What they did was they converted that second floor I was not on
the second floor. My office was on the sixth; into an art gallery where
they hung all this stuff. I imagine they got a very good tax break as a
result. That's where I brought the stockholders in with Leonard.
Very impressive. And I must say that the art was good. It was good stuff.
There was no crapping around. They really acquired the best of Latin-
American art. When they sold the Company, they kept the art work. That was
not part of the deal. In other words when they made the deal, the deal was
they kept the art. Because Leonard knew that whatever he'd paid for it, he
would probably get double, triple, or quadruple the value when he came to
L y 40
sell it. If he decided to sell it. What he did with it when he sold it, I
don't know. But Leonard being a very canny guy, I'm sure he got top dollar.,
The only decent artwork I ever saw in the city of Miami. Not the city, in Dade
County. Bass Museum was crapy' All copies. I don't think there ever was
a gallery that equalled the Rosen's collection in this town. They had taste.
L--Jim 'Layden I'd forgot him.
D--What did he do?
L--Jim was with the property. He was a sales manager. I'm not sure what Jim
did. But he was at the property. He was originally at Cape Coral.
D--There's another guy. Bob Granger.
L--Bob Granger. I'm trying to think. I thought he was in sales.
D--No. From what I understand he helped as a contact man for the Rosens with
different sources of financing and stuff.
L--I didn't know him well. The name rings a bell, but I don't remember. Now
there'sanother guy who became a political lobbyist. I can't remember his
name. He's dead now. He wrote a book about buying condominiums in Florida.
He was a real swinger too, this guy. I always wondered how he could be an
effective lobbyist up in Tallahassee. Charlie would know.
D--I'm running out of questions. Is there anything else you can think of that
might help to tell a little bit more about the Corporation?
L--Sure. When we were taken over by GAC Properties, Hayward Wills wanted us
to increase our volume by 20% a year, and at the same time, clean up the
operation. When he found out that you couldn't do $200,000,000 a year, and
clean up the operation, that's when he fired us. He had some illusions about
going into politics. We got fired at the end of May. We were doing about
$20,000,000 or $25,000,000 net a month. And by the following November,
less than six months I guess, they were down to $6,000,000. And as you know,
ultimately, they went broke. He was a goddamn idiot. He inherited money.
He had managed to get some people around him. But he wanted to have his cake
and eat it too. That's what lead to the ultimate downfall of the Company.
We were doing our job. At that point, I was in charge of advertising as well
as promotion. I had a very hard working group of people working with me.
Hayward expected too much. If he wanted us to clean up the operation, we
couldn't keep going up to 20% a year. And if he wanted 20% a year, we couldn't
really clean up the operation. You can't do it overnight. So Hayward, really,
was responsible for the ruination of the Company and its going bankrupt.
D--Do you think he just really didn't understand the sales business?
L--He wasn't very smart. Charlie worked his ass off when he became president
of GAC Properties. He worked hard. And he did a pretty good job too. He
was making some progress. But Hayward wanted it all overnight. He wanted
everything overnight. Not much you can do. Hayward brought in some pretty
good people. We had a very good chief financial officer, Jack Jones. Jack
was excellent. I can't remember the name of the guy who was chief engineer,
but he was fair. I learned how to do critical path method in planning a new
product, during that period, because that's what we did at Poinciana-
D--Pointseanna came during the GAC period?
L--Yes. The Rosens had planned for it, but it came during the GAC period.
Poinciana Park. Of course you can't grow pointseannas up there but I
didn't know that when I named it. After we named it somebody told me this
and I said, "Why didn't you tell me before!"
D--So you named Pointseanna?
L--I named everything, usually.
D--You named Remuda?
L--No. I didn't name Remuda, Golden Gate, or Cape Coral. The Rosens had a
superstition about having the two letters being the same. But most things
like Waltzing Waters and the gardens and Pointseanna, and all kinds of things
usually came to me to suggest names. I didn't name it because people had
to choose the name, but they chose a name from what I proposed.
7 ( I 42
D--Anything else you can think of or would like to add.
L--Well I'm thinking of the GAC Properties period. Hayward got us into a stupid
thing on Eleuthra. Couldn't possibly have been successful. It was
a bad location in the Bahamas. But he was impressing Juan Tripp. Do you know
who Juan Tripp is? He was the president of the old Pan Am. When Pan Am was
still a great power. So Hayward wanted to impress Juan Tripp. I didn't think
Juan Tripp had an interest, but we committed all kinds of talent and money to this
report on Eluthra which went no where. Notenough water. All kinds of
things wrong. On Truth in Lending we really showed our industry how to do it.
Do you know anything about Truth in Lending? Truth in Lending is the federal
law which requires that you make financial disclosure when you sell something.
D--When was that passed?
L--I think Truth in Lending must have come in maybe in 69. We had a big problem.
First of all we had to supply our men with a lot of information that we had
never given the customer before. We had to redesign our contracts to
accommodate it. We had to comply with a law that nobody knew anything about.
We had some big battles with the Federal Reserve, who had overall supervision,
because we gave a discount and they wanted that to be part of the finance
charge, which would have been ridiculous. Finally a compromise was worked
out where we didn't discount anything, but we were allowed to charge a
different interest rate on the basis of different down payments. In other
words, for 10 down let's say you paid 18%, for 15 down 15, 20 down you got
down to 12. That sort of thing. Then the problem arose as to how to present
this thing. How to do various conversions at different interest rates, and
resales and what not. For some reason I got stuck with it. We had to put
something out that the salesmen had to use. Accounting washed their hands of
it. They gave it to me to work this thing out. So I went to data processing,
and at this point David Isaacs was not in charge, he was working in finance
with Jack Jones, and they had some guy that GAC had brought down from Allentown.
And I go to the guy because I want help. I want to get these figures. Well
I got great help. One day at 5:00 he walks in and he introduces an outside
resource. This guy is going to do programming. The next thing I discover is
that he has his programmer--is a guy who works for the county and is moonlighting.
The next thing I discover is that the programmer knows nothing about
amortization. The next thing I discover is he doesn't know how to figure
amortization. I called the guys up in Allentown since they had run a consumer
borrowing thing and knew all about it. They gave me some help. Then I bought
a book from a financial publishing company which gave the level of payments
for certain interest rates. I had to teach this damned programmer how to do
amortization. Now I'm not bad at math, but had never done amortization. I
didn't know what to show the customer. But working with the book I could figure
some shortcuts for it. Like 1:00 at night this guy would call me at home with
these problems, because he was moonlighting. Well, we finally got the thing
done. I had to do a special book for the international program. A book for
the property which might have different terms from outside. But miracle of
miracles. When the deadline came for the law to go into effect, we had new
contracts, which I had designed. We had the books with all the financial
disclosure information a guy could get for almost any price for which we'd
sell. I gave him instructions on how to interpolate. and there was very little
interpolation necessary. I didn't want our salesmen interpolating. I
wanted them to just write down what we had in the book. It was a great
crisis. A lot of people didn't comply until after we complied and they could
see how we had done it. There were other people who complied on time,
General Development was one of them. But basically people would look to see
what Gulf, GAC Properties had done.
D--Somebody mentioned to me one time/ I don't think they necessarily had any
basis for it but I though I'd ask you, that the Rosens or Gulf would go out
and get an option on a piece of land, like when they were expanding Cape Coral
or whatever, and would basically divide it up and sell lots from it, without
really owning it. And when they sold a certain percentage they would
exercise that option and purchase the land.
L--That doesn't sound legal to me. If they did it they must have been coveredly
doing it, because that would have been a criminal offense. I remember they
had something called the Phipps property in Cape Coral, which must have been
one of the things you are referring to, but I'm sure what they did with it was
legal. In fact, the garden was Phlpps' property. They weren't dumb enough
to do something that would be out and out criminal activity. They knew better.
S The GAC Properties period was interesting. It was interesting because for us,
the people we now had to work with were so different from the people the Rosen's
D--How is that?
L--My wife was a Pennsylvanian. Her ancestors were Pennsylvania Dutch. When she
met the people, she shook her head and she said, "They must have all gone to
Bucknell. You'll have problems with them. They're stodgy. They are going to
be ultra-conservative." Now Hayward Wills people were Quakers. T remember
I once wrote a promotion piece on a Quaker deal. Hayward thought he learned
something he never knew about Quakers, as to why they were successful in
business. It was a different ambiance a different way of looking at the
D--You're talking about the Pennsylvania people?
L--Yes. You know- I'm trying to think of the right word that describes this
business of people who had differing backgrounds, consequently had different
morals, had different folk ways that's really what it is. A different way
of working. For example, I remember we had...let me see what was the name of
our attorney...I don't remember Jerry's second name, but his assistant was a
Mormon. In various conversations, I found out that these people thought that
we were real dirt. They had the utmost contempt for us. We were really, in
essence, paying their salary, because without the generation of sales, these
people would have not been paid. But I found out that he really
looked down on us. I remember one day I had really had enough of it. I was
thinking you think you're so goddamn pure. And you think we have no principles.
And I gave him a little lecture on the background of the Company, and some of
the things we fought for and won, But they looked on the old Gulf people as
really being people without morals. They were very moralistic in their attitude.
I will say that. We built a company on street fights. They were very
sophisticated people.. I said that there were very few college graduates in
Gulf American well, these guys were all college graduates. That didn't mean
that they were smart. It didn't mean that they were superior. It meant in
their eyes there was a great social gulf between the lords of the manor and the
mercenaries. They weren't nearly as smart or as cultured as they thought they
were. Most of them were real stick-in-the-muds. A college degree does not mean
you are educated. My school today is called the poor man's Harvard. It wasn't
the poor man's Harvard when I went there but it was a pretty good school. I
learned a lot after I left. I'm going to the 50th anniversary of my class in
D--When were you born?
L--1917. I told you I was one of the older guys at Gulf. I'm older than Charlie
and Charlie looks older than me!
D--Anything else you'd like to add?
L--Offhand I can't think of anything except that I had great respect for Jack.
He did a lot of things I didn't like, but most of the things Jack did were
creative, and I think, the product of high aspirations. Not ambition. Ambition
is there, but high aspirations. Jack wanted to be a superior human being, and
he wanted the people around him, if he could possibly bring them along, to be
superior human beings. He encouraged them to go to speed reading classes at
his expense. All sorts of things like that. He brought in those State Dept.
people. Jack wanted to do good.
D--Do you think that the Rosens started out originally just with a get rich quick
scheme and came away with the idea they building a city down at Cape Coral.
L--I feel positive when they started, especially when you're using a guy like
Milt Mendelsohn, that the motive was to get rich quickly. On the other hand,
as I pointed out earlier in the game, Leonard also understood that it might not
be so quick, so you had better build well. I feel sure that the reason Cape
Coral is a flourishing city today is that Jack brainwashed his brother by
really making the dream come true. That this new world for a better tomorrow
was possible. That it could be a monument to them and in doing a job for
private profit. People have-mixed motives. Mine was always, first and foremost,
but that didn't mean that these guys didn't want to do a good job. Only after
they switched from lots to acreage at Leonard's insistence, did I think the
worse things developed. Now nobody could believe that Golden Gate could be
another Cape Coral. Not when you looked at the size of the thing and the way
it was being sold. It couldn't possibly be another Cape Coral. Nor could
Remuda or River Ranch. Poinciana P ark yes. It was near a population
center and it could be a bedroom community for Orlando. Jack fought the idea
of selling acreage. He wanted to keep building cities. But Leonard overpowered
D--One last question. Both the Rosens by the early or middle 60's were wealthy
men. Was that something that they flaunted or did they live fairly simple
L-- I never felt that either one of them flaunted anything. I mean they had nice
homes. The only man who was a real flaunter of any kind was Leonard. But I
don't think that Leonard really, because of his lifestyle, was really flaunting.
He was just a guy who liked to to jab people. I remember once my wife and I
were eating in a restaurant Casa's Santino and we sit down and Leonard
was sitting near us with his mistress. To show that he didn't flaunt, he sent
us a bottle of wine. I knew that Leonard was bribing me not to talk. He said
hello and all that, but he was bribing me not to talk. I wouldn't have talked
anyway. But if the guy had really been flaunting, he would have flaunted his
mistress too. He didn't. Within certain limits, he was observing proprieties.
If he didn't like the limits then o.k. But he didn't really go out of his way
to flaunt anything. It wasn't necessary. Leonard was much too secure a person-
ality. He just knew what he wanted to do and the hell with it. He didn't feel
it necessary to flaunt. Weak people flaunt. People who lack confidence in
their status. Leonard didn't have that. And Jack, though he wanted a different
sort of status, didn't want it in such a way that he had to flaunt wealth. And
he didn't. They would rather flaunt their money in making their contributions
to Jewish charities and causes. That was their flaunting. A pretty good kind
of flaunting. Jack was a very complex guy. The number three man was Charlie
Hepner. It was Leonard, Jack, and then Charlie. Then I guess it was Ed Pacelli.
D--Well thanks a lot for your time.