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Freeman Magazine - Summer 2007

A Stirling Success

JimmyMaurin has built Stirling Properties Inc. into one of the leading real estate companies in the Gulf South.

By Mark Miester

It was the case of the contentious cupola.

In 1984, James E. Maurin (MBA '72) and Roger H. Ogden (L '73) were young real estate developers trying to build a name for themselves in Louisiana. The pair had a differentiating concept that consumers would respond positively to new, better-designed shopping centers but they soon discovered that persuading longtime tenants to abandon their standard designs would take some doing.

In the Woodlawn section of Baton Rouge, a neighborhood dominated by Colonial-style homes, the developers proposed an open-air shopping center that would draw on the architectural style of Williamsburg, Va., but Sydney Besthoff, chairman of the K&B drug store chain, balked at their plans for his store. Did they really intend to put a cupola atop his K&B?

"I don't want it up there," Besthoff exclaimed. "That's not K&B."

Maurin and Ogden explained their Williamsburg concept to Besthoff, pointing out that other retailers had changed their facades to fit in.

"That's going to cost $20,000," Besthoff replied. "K&B doesn't need a cupola."

Besthoff and the developers went back and forth over the disputed addition, but the chairman wouldn't budge. Finally, Maurin and Ogden proposed a solution.

"We told Mr. Besthoff that we'd pay the entire cost of the K&B cupola," Maurin says. "And that's just what we did. In the end, we felt that maintaining our new architectural concept was key to the success of the center."

The Woodlawn Shopping Center was an instant success and that success helped cement a relationship between the developers and K&B that would last more than 20 years.

"We distinguished ourselves by creating a more visually appealing retail center," says Maurin, "a center that would blend in with the look of the community surrounding it."

That commitment to quality paid off. Stirling Properties Inc., the company founded by Maurin and Ogden, has grown into one of the Gulf South's largest real estate companies and a major developer of shopping centers, office buildings and residential communities. As chairman of the Covington, La., based firm, Maurin heads a full-service real estate company involved in commercial and residential development, the sale and leasing of commercial properties, investment sales, property and asset management, project management, buyer and tenant representation, and residential real estate brokerage. The company has 17 offices and 384 employees in Louisiana and Mississippi, and leases or manages more than 8.5 million square feet of property.

Miraculously, Stirling Properties was up and running at its Covington headquarters seven days after Hurricane Katrina devastated the region in 2005, working to assist employees affected by the storm and quickly reopen its portfolio of retail and office properties.

"What this company did after Katrina was one of our finest hours," Maurin says. "In getting our company back operating, we were able to deal with our clients and meet their needs very quickly get their stores and office building back open and operating and we were also given the unique opportunity to help a number of our employees to rebuild their lives. It was win, win, win."

While the storm dealt a major financial blow to many New Orleans area businesses, leading some to cut back operations or lay off staff, the effect was just the opposite at Stirling Properties. In the wake of Katrina, the company has added two new offices and 100 new employees and its portfolio of managed property has grown by more than a million feet.

"The recovery from this storm is a huge real estate project, and we're in the real estate services business," Maurin says. "A number of our properties were damaged, but all but two reopened within 30 days after the storm. We were able to do that quickly while other properties in the New Orleans market just sat there, and the reason was we had good people on the ground working to get properties reopened and strong long-term relationships with suppliers and contractors who showed us preference."

Despite his aggressive approach to Stirling's post-Katrina strategy, friends say Maurin is still just Jimmy, the good-natured, self-deprecating southerner whose engaging style and easy-going manner hide a keen business mind. "For someone who has the extraordinary skills, intelligence and analytical abilities that he has, Jimmy has always been down to earth," says Ogden, his business partner and longtime friend. "He is a person with great formal abilities wrapped in an informal, down-to-earth package, which is something that I've always felt has served him well.

"Jimmy has run circles around the Harvard and Wharton MBAs," Ogden adds. "And the beauty of it is they never knew it."

Maurin was born in Hammond, La., the son of a homebuilder father and a school teacher mother. At a time when such activities were unfashionable if not outwardly opposed, Maurin's father was active in the civil rights movement. Through the Bi-Racial Commission of Tangipahoa Parish, the elder Maurin fought to end segregation and to find white-collar jobs for African-Americans. Jimmy followed in his father's footsteps, joining the Junior Bi-Racial Commission and helping to integrate Hammond's segregated high schools.

Maurin's heroes were John and Bobby Kennedy and his enthusiasm for their social values carried over to another of their dreams: the space program. "I was young, impressionable and believed wholeheartedly in President Kennedy's dream of putting a man on the moon," Maurin says. "When I graduated from high school in 1966, the space program was it, and I wanted to be a rocket scientist."

Louisiana State University has just begun offering an undergraduate degree program in aerospace engineering, so Maurin, who had a gift for math, jumped at the opportunity. Three years later, Maurin worked as an intern on the Apollo 11 project, earning the right to say he helped put a man on the moon.

It was at LSU that Maurin met Lillian Crosby, the beautiful young woman from DeRidder, La., who would become his wife. The couple married in 1970 and today they have three adult daughters including Marli Maurin Quesinberry (MBA '04) and four grandchildren.

Soon after graduating from LSU, Maurin got his first lesson in business: Things change. In the wake of the Apollo 11 mission, NASA dramatically scaled back its workforce. A career that had seemed as vast as space itself only a few years earlier had become a dead end by 1970.

"I watched as many of the brilliant men around me were laid off," Maurin says. "It was painfully apparent to me at the age of 22 that aerospace engineering was not going to be a good career path. So I entered Tulane's MBA program."

Maurin majored in finance at the Freeman School and completed enough accounting courses along the way to pass the CPA exam after graduation. While at the Freeman School, Maurin served as a teaching assistant to Jim Murphy, then head of the finance faculty, and as a research assistant to Hugh Long and Ken Boudreaux. In 1972, he graduated at the top of his class.

After graduation, Maurin served a yearlong fellowship teaching finance before taking a job with Ernst & Ernst in New Orleans. There, he parlayed his scientific background into a career on the vanguard of accounting, helping Ernst & Ernst to introduce for its clients computer-based auditing and financial modeling.

"I did a lot of work at Hibernia Bank and some of the big financial institutions," Maurin says. "At the time, computer-based systems were very cutting edge. It was exciting and allowed me to draw from both my financial and technical backgrounds. "

To no small degree, Maurin owes the start of his real-estate career to the Arab Oil Embargo.  In 1973, the price of oil shot from $3 a barrel to $10 almost overnight. While the rest of the nation weathered a recession, Louisiana's oil-rich economy exploded. The hot business climate led Maurin's college buddy Roger Ogden, then an attorney with the law firm of Lemle & Kelleher in New Orleans, to give his old friend a call.

Since their days together in the Kappa Sigma fraternity at LSU, Maurin and Ogden had always talked about starting a business together. "We were both fascinated by real estate development," Ogden says. "But it was real estate development as the expression of our fascination with entrepreneurship. The underlying motive in each of our souls in our guts was to become entrepreneurs."

For a few years, Ogden and Maurin quietly analyzed the real estate market. They considered multifamily housing, mini-warehousing, condominiums and industrial warehousing, but none of those areas really excited them. The one area of real estate that did capture their imagination was neighborhood shopping centers.

"We realized that the Gulf South's explosive growth would make the shopping center industry blossom, yet there were very few Louisiana shopping center developers at the time," Maurin says. "Most of the shopping centers in Louisiana had been built by people from out of state."

Maurin and Ogden together with another fraternity brother, Gerald 'Chip' Songy, decided to go into the shopping center business. On a piece of property owned by Ogden's family in Lafayette, La., the partners built the Boulevard, a modern open-air shopping center anchored by a Kroger Supermarket and a Piccadilly Cafeteria. The center was an instant success.

The Boulevard got them in the door, but it was their second shopping center that put them on the map. It was a shopping center in Picayune, Miss., that was their first in partnership with Sydney Besthoff, chairman of K&B Drugs. "He took us under his wing," Maurin says. "After the success of our second shopping center, things began to snowball. There was a demand. Retailers suddenly wanted to get involved in the Louisiana market."

One of those retailers was an upstart discount chain from Bentonville, Ark. Sam Walton personally cut the ribbon at the opening of the first few Wal-Mart stores Maurin and Ogden built for him in Louisiana.

In its first 10 years, Maurin-Ogden Inc., as the company was originally known, built 20 shopping centers in Louisiana and Mississippi. The secret of their success, both partners say, was simply building a better mousetrap.

"No one was building high-quality open-air centers," Ogden says. "Prior to our entering the business, open-air discount-store-anchored centers were being done in a really pedestrian manner pipe columns, no architecture, no theme of architecture design."

Maurin is more succinct. "They were ugly," he says. "No landscaping, big parking lots, metal buildings, ugly signs. When it came to the first wave of retail through Louisiana, beauty just wasn't one of the considerations."

Maurin and Ogden set out to change that. Working closely with retailers and often convincing them to modify or scrap altogether their standard designs, Maurin-Ogden Inc. built high-quality, architecturally coordinated centers that became attractions in their own right. Using higher-quality construction materials and design themes in harmony with their surroundings, the company built centers that were greater than the sum of their parts.

"I think we had something to do with coining the term open-air center," Ogden notes. "We hated people referring to our projects as 'strip malls.' We'd create courtyards or pedestrian-friendly environments while still maintaining the convenience of being able to drive up and park relatively near the store you wanted to patronize."

Maurin-Ogden was riding high until, in the mid-'80s, the company was hit with a triple whammy. First, the oil bubble burst, sending the price of crude tumbling and, with it, the Gulf South economy. That was followed by the Tax Reform Act of 1986, which rewrote federal tax laws and essentially devalued all commercial real estate overnight. The third blow was the credit crunch of the late-'80s and early '90s, which in the wake of the oil bust ravaged South Louisiana. "Without a doubt, what happened to Louisiana was proportionate to the Great Depression," Maurin says. "In our portfolio, 70 percent of the mom-and-pop tenants filed bankruptcy or just walked away."

With shops vacant and shop owners unable to pay their rent, Maurin-Ogden faced a crisis. "We went to our lenders and said, 'Guys, we can't pay you,'" Maurin says. "Together with our lenders we came up with a creative solution."

Maurin-Ogden promised to send all rents collected from its shopping centers directly to its creditors. In return, the company asked those lenders for the right to manage for a fee the real estate properties the lenders had foreclosed on. The lenders, most of which were banks with little experience managing real estate, agreed. For the first time, Maurin-Ogden entered the third-party management and leasing business.

"Up to that point, the only properties we managed were our own," Maurin says. "Many of our lenders bought into the idea, creating our third-party management and leasing business. We were all able to hold on to what we owned during an extremely difficult time."

The company also began to enter into joint ventures with landowners burdened by troubled properties. When all was said and done, Maurin-Ogden had added dozens of managed centers and joint-venture developments to its portfolio.

"Probably our single greatest source of pride as a company is that we not only survived but built a better company during difficult times," Maurin says. "It was a very powerful lesson. It was a struggle every single day, but we never quit."

The company took another step toward becoming a fully integrated real estate services company in 1988 when it merged with a commercial brokerage firm owned by Lewis Stirling. The new company was christened Stirling Properties. Maurin served as president of Stirling Properties until 1994 when Ogden retired from active management of the company and Maurin assumed the title of chairman.

When Hurricane Katrina struck the region in August 2005, Maurin was already in the process of scaling back his involvement in the day-to-day operation of the company, a process he had begun in 2004 when he was elected to serve as chairman of the International Council of Shopping Centers, the worldwide trade association of the shopping center industry. In his year as chairman, Maurin circled the globe delivering more than 50 speeches on behalf of the organization. In the wake of Katrina, that experience turned out to be a critical advantage for Maurin as he began to involve himself in the region's recovery.

"The fact that I had enjoyed that great national exposure certainly opened up some doors," Maurin says. "I had no problem getting into the board rooms, not just of major retailers but also the major property owners, the people that had major investments in the New Orleans market. General Growth Properties, one of the largest REITs in the world, owns the Riverwalk and Oakwood Mall. I can tell you I had a number of conversations with their chairman of the board after the storm."

Maurin says his message to retailers and property owners was simple: The demographics of Louisiana suggest a strong recovery. Few geographic regions in the nation have a higher percentage of residents who remain in the area they were born over multiple generations. So while New Orleans may have lost half its population, Maurin says those residents are likely to settle in Mandeville, Hammond, Baton Rouge or another nearby city.

"We've retained 90 percent of the displaced people in the greater region," Maurin says. "So our pitch to retailers was you've got to reposition your offerings to accommodate that shift. We've kept them invested and active down here in the areas where people have moved to, and at the right time we'll help them reposition and improve their offerings in the new New Orleans."

The recovery of New Orleans may take another three to five years, but Maurin is wholeheartedly optimistic about the long-term future of the city. "New Orleans is the brand for the region and one of the best-known city brands in the world," he says. "We've got to rebuild our whole economic region around the New Orleans brand and make it better. It will be broader and wider, all of South Louisiana will participate in that brand. New Orleans proper is going to be smaller but better."

Despite Stirling's increased activity in the wake of the storm and Maurin's growing role in promoting economic development, Maurin has stuck with a plan he developed years ago to retire by the time he's 60. "Transitions are difficult but they're important if a company is going to get to the next level," Maurin says. "Roger and I have some phenomenal people that have been here most of their working life, and it is, quite frankly, their turn to step up and lead the company."

Much of the day-to-day operation of Stirling now rests in the hands of President and CEO Martin Mayer (E '75, MBA '77). In December 2006, Maurin and Ogden sold their ownership stake in Stirling to their partners. At that time, Ogden joined the Stirling board of directors and Maurin formalized a plan to remove himself entirely from the company. He will continue through January 2008, and then serve as non-operating chairman of the board for another five years, a role that will allow him to continue to serve as spokesman for the company as well as continue his efforts to promote economic development and frame public policy issues.

"Maybe I'll come back to Tulane and teach," he says.

Since abandoning his nascent teaching career to go into business, Maurin has returned to academia on several occasions as a guest lecturer at both LSU and Tulane, where he received the Freeman's School 2004 Outstanding Alumnus Award. Last year, he participated as an Entrepreneur in Residence at the University of Pennsylvania's Wharton School.

What advice does Maurin have for today's business students? Don't be afraid to make mistakes. "One of the greatest things about being young is that, career-wise, you can screw up three or four times," Maurin says. "I'm a guy that worked in the space program, then worked for a major oil company, went to business school, taught school, and then went to work for one of the Big 8 accounting firms. For me, the fifth time was the charm."

 

 

Last Updated 5/14/10