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- 2010 - March - 25th -

Jacksonville Civic Council’s Peter Rummell:

Public problems, private assistance and tough nuns

Peter Rummell chairs the new Jacksonville Civic Council, a group of Jacksonville business leaders seeking to improve Duval County. The members make a financial commitment to join. Rummell’s long career includes serving as chairman of The St. Joe Co. He met Tuesday with the editorial staff of the Daily Record, after a Monday night Civic Council meeting.

What is the genesis of the Jacksonville Civic Council?

I think it’s fair to say that in any progressive city that I know of, 1 million-plus in size, there is some version of a civic council. They have various names and sizes and structures. All are collections of business leaders that are what I describe as the private side of a private-public partnership. That typically is not done through a chamber of commerce. Our Chamber is one of the most effective in the nation.

This is different. We were not tightly organized or focused. A group of us got together and decided we needed to make that happen.

We are undemocratic. It started in small circles that kept expanding as we talked to people who cared. We edged up and now we have a group of 51.

How did you decide on 51 members?

There were two goals. One, get the right people at the table. Two, make the budget nut. We came up with a structure where large pays more than small.

What’s been the community feedback?

Apparently, there’s a bunch of people out there that think we’re just a bunch of rich, white guys.

How do you prove the skeptics wrong?

You know, I’m sorry. We’re here to try and make a difference and I think the proof will be in the pudding.

Some folks in town have said these are the same folks who have been involved in everything for the past 20 or 30 years. Is that fair?

Yes, somewhat. (Haskell Company Chair) Preston Haskell fits that description. Some are brand new. The goal was to get an interesting combination of perspectives. Take Dave Stovall (Stein Mart) or Lee Thomas (Rayonier). Both of them are new to Jacksonville, but they bring terrific civic experience and are invaluable.

What were some of the issues that came to the forefront last night?

We spent some time talking about the fundamental structure of City finances — and I mean more than budget — just incomes and outgoes and how you think about it in a conceptual way. That leads you very quickly to things like pensions. We have an ongoing conversation about Downtown and how you energize it. We have an ongoing concern about the Jaguars like everyone does. Those were general subjects we discussed. Anybody who is thinking about the long-term future of the City would start with a list like this.

When you walked out of the meeting, what was your impression?

The thing I’m most pleased with is the commitment of the people. I think everyone thinks it’s important to be there. I think they feel a sense of responsibility. And, we’re all grownups and nobody thinks this is going to be easy. Nobody thinks this is a cakewalk but I think there’s a sense of long-term optimism and that’s important. There are going to be bumps and misses and all kinds of things, but I think there’s a sense that it’s the right time, maybe even past the right time, to do it.

How long ago did the discussion begin? Is this the successor to the 10-year-old Jacksonville Non-Group?

I don’t like to think of it as an outgrowth of the Non-Group. We realized it needed to be more. It goes back to November or December. It’s incredible what you can get done when you don’t have to worry about hurting anyone’s feelings or public meeting notices.

Given the makeup of the organization, do you expect City Hall to listen or take your advice?

I think the proof is in the pudding. We are not a white paper group. We are not about studies. Our entire ethos is on results. If we need to study something before we make recommendations, we’ll do that. We have the resources of 50 companies. It is not our goal to say ‘Here are 10 things to make this a better place.’ The goal is to make a list of 10 things and say ‘Here are four ways to make number one happen.’

Shame on us if we are not smart enough or persuasive enough to come up with good recommendations.

Fill in the blank. What needs to happen soon in Jacksonville is ...

A vibrant public-private partnership to help ensure a prosperous future.

In terms of the Civic Council’s recommendations to improve Jacksonville, do you think it’s time to reinvent the wheel?

That’s a good question, but I think ‘reinvent’ is too strong.

This is a philosophical statement more than a warning, but you can’t assume that everything is just a tweak. This city has a fundamental budget problem. There is an enormous mismatch of revenues and expenses and that isn’t going away any time soon that I can see. We can keep beating around the bush about it or we can put it on the table and take it apart and try and figure out how to help.

If we can help the political process in doing some of that, I think that’s something the business community understands.

But one of the last things we want to do is look like we’re trying to do anybody’s job. The City Council is there and they’ve got a mission and a responsibility. We simply want to be able to help. I think we have intellectual and financial and political resources collectively as a group that if we can identify something that needs to be done, we can help. If there’s a way we can combine forces to make something smarter or bigger or faster or sleeker, we would be crazy not to do it. That’s what a public-private partnership is.

What’s the life span of the organization?

My attitude is this is forever. We need to structure ourselves that way and in the way we govern. We need to think of Downtown in terms of decades.

Certainly there are projects that have beginnings and endings. Some are Downtown and that’s forever. I would say education is another forever project.

We have an issues-screening process. A. Can we effectively do it? B. Are we the best organization to do it?

What will you do if and when you detect the organization is losing steam?

That’s a concern of any organization. The first thing you do is get a new leader, that means get rid of me. One of the challenges is keeping the energy going. There’s an enormous amount of pent-up energy and we need to figure out how to not lose that.

A key ingredient is missing and that’s an executive director. One of the criteria from day one is to have an executive director, someone who gets up in the morning and does the job. We have contacted a headhunter and put together a budget.

There’s a reason it’s such a critical hire. They will not be a staff person that takes notes and gets coffee. This is a leader. In other circumstances, they might be a member of the group.

Do you have anyone in mind for the job?

No. We have hired a national search firm, one of the biggest and best. It will be an interesting search, lots of different backgrounds and qualifications. Retired CEOs have expressed interest, local CEOs have expressed interest. People from all over. I expect it will be summer before we have someone in place.

Would it help if the person was local?

We’ve debated and I think the answer is it is going to depend on the person. A local person brings local knowledge, a person from out of town brings other market knowledge, which can be equally important. A local person knows the local characters. An out-of-town person doesn’t bring the local biases. I can be articulate on either side of it. I think we’ve decided, that after talking about it, that there is no bias. We’re looking in and around.

How do you think the recession will affect real estate in the long term? Will there be permanent changes?

I think the world is different now. I’m 64 years old and this is the first time in my life that everybody I know is a third poorer than they were. Whether they had a dollar or a dime, they have lost a third of their net worth. They’ve gained some of it back but they have been scared to death.

There are millions of people my age who were going to retire soon, but now they’re going to work six or seven more years, so lifestyles have been extended. I think there has been a shock to the psyche that has fundamentally changed people’s risk profiles.

One of the things that scares me is the impact on second homes. Stop and think about it. The second home is the ultimate discretionary investment. People have lost some of their belief in real estate as a surefire investment, plus they have less net worth to begin with, so I’m concerned that part of the business, which is where I spend a lot of my time, is going to come back slower than other parts.

That being said, there are investors all over the place picking up properties at 50 cents on the dollar. There is a lot of investment — big money, smart money — that’s starting to come back into the market.

How did you choose your career in real estate development? Was it what you always wanted to do?

I got out of graduate school (at the University of North Carolina at Chapel Hill) with a double major in chemistry and English literature, which prepares you for nothing. It was 1967 and I took the best job I could find selling laboratory equipment to poor Catholic hospitals in North Philadelphia. I discovered two things very quickly. One, that I was a very poor salesman and two, that there’s nobody tougher than a nun on a budget. That’s an old joke, but I use it.

I had some friends who were at Wharton (School of the University of Pennsylvania). I applied to Wharton and got an MBA. Wharton didn’t have a real estate concentration then, so I went to the design school and the law school and convinced them to let me take some courses. I was in West Philadelphia in 1970 and I hated it.

Here’s how strategic my life was: I decided to take the best job I could find that wasn’t in a city. I had spent all this time and effort on an MBA, my parents had no money, I had no money and that was the criteria I was using.

A friend of mine who graduated from Wharton had gone to this little place nobody had ever heard of called Hilton Head Island, S.C. He said ‘come on down,’ so I drove down on spring break. There’s this guy who’s famous in the real estate business named Charles Frazier who was putting together the Sea Pines Company in the early ‘70s. He hired me and that started a 39-year career.

Hilton Head was really rural in 1970. They had just built a bridge a couple of years earlier. I remember getting about a block from where I was having my interview and I saw a guy plowing with a mule. I thought, ‘What have I gotten myself into? I may have overcorrected for West Philadelphia’.

I’ve stayed in the real estate business since and it has treated me very well. I consider myself fortunate.

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