John Baker is a native Jacksonville business leader, having joined the family-run Florida Rock Industries Inc. after completing his service in the U.S. Marine Corps.
His father founded Florida Rock in 1929, and Baker and his brother, Ted, grew to take leadership roles.
Baker served as president and CEO from 1996 until 2007, when Florida Rock was sold to Vulcan Materials Co.
Upon the sale, Baker joined another Florida Rock company, Patriot Transportation Holding Inc., and now is executive chairman and director of the company. Patriot is a transportation and real estate company spun off from Florida Rock in 1986.
Baker, 65, earned a bachelor's degree from Princeton University and a law degree from the University of Florida School of Law.
His passion is education and he was key in creating the Knowledge is Power Program, or KIPP, Jacksonville Schools and the Tiger Academy.
The Daily Record interviewed Baker for "First Coast Success," a regular segment on the award-winning 89.9 FM flagship First Coast Connect program, hosted by Melissa Ross. The interview took place at the station at 100 Festival Park Ave. along the St. Johns River near EverBank Field.
The interview is scheduled for broadcast this morning and the replay will be at 8 p.m. on the WJCT Arts Channel or online at www.wjctondemand.org.
Florida Rock has been a strong corporate player in Jacksonville. How did it start and how did you become involved?
It started back in 1929. My grandfather had lost his company, which owned a sand plant in Interlachen, and my dad bought it from the bank and began running it. He gradually built it up. We'd use whatever cash flow they had. After his dad had lost his company, he was very debt-averse, so he was careful.
In 1972, we went public and merged with concrete companies in Gainesville, Jacksonville and Tampa and used the public company as a way to bring all those companies together and not create a lot of new debt.
After going public in '72, we began to spread throughout the Southeast.
You grew to be a very large company, with about 3,500 employees. What prompted the decision to sell?
We had no intention of selling. We were having a ball. We were making the most money we'd ever made. One of the largest companies in our industry came to us and literally made us an offer we couldn't refuse.
I'll never forget my brother and I walking out of that meeting and we both looked at each other and said we have no choice. While our family had a significant stake in the company, it was a public company and we had to, in our view, sell it to be fair to the other shareholders.
As it turned out, timing was great for our shareholders because the recession came. Nobody knew how bad it would have been. But it was a bittersweet moment when we did it because it had been our baby for all those years.
You have a degree from Princeton and a law degree from Florida and you served in the Marine Corps. Did you always want to join the family business?
I had no idea of wanting to join the family business. My brother was running it and I thought I would be a lawyer. When I came back from the Marines, he called me into his office and said, "Look, you've got all your net worth involved in the company and I need your help."
I came willingly initially as a lawyer, but pretty quickly I got into the management of the business.
Patriot Transportation was a spinoff. What does Patriot do and how many jobs does it have?
Patriot had about 800 jobs. It's an unusual public company. We've got a tank truck division that we call Florida Rock & Tank Lines. We have about 450 trucks, and primarily haul gasoline, though we haul cement and chemicals and other bulk commodities.
Then we have a real estate company. The real estate company really gets its roots from the original spinoff where Florida Rock felt like it was getting zero value for its real estate as a public company in 1986 so it spun the real estate and the trucking off together.
The land under a lot of Florida Rock's mines is owned by Patriot and we receive royalties as the stone is mined and sold.
Beginning in the late '80s, we also started developing warehouses in Baltimore, in the Washington area, and have grown that to about 3 million square feet of warehouses and some offices.
You're at the forefront of the economy with both of those industries. How did the recession affect the company?
The recession definitely affected the company in the real estate business. Our occupancy went from 95 percent to 72 percent. The rents that we were charging went down as demand went down. Our royalties that we were receiving from Vulcan and others probably went down by half. The trucking company was steadier because most of what we do is haul gasoline. It's not quite as cyclical as real estate, but we were affected.
All of our businesses were affected and we had to buckle our chin straps for a while.
Has the economy come back?
Yes, and we're back up to about 90 percent on our warehouses. We built two pretty large ones in the last two years. Our royalties have not come back like we thought, but we expect that they will in a big way as the economy comes back. And the trucking's done really well lately.
You mentioned that the two lines of business are very different and I know that there has been talk about Patriot splitting into two companies. Can you talk about that?
When we spun Patriot off in 1986, it was obvious that this was an unusual public company — two completely different businesses with no synergy whatsoever, but the thought was, let's get our feet on the ground and then we'll split later.
I think in the early 2000s we made an announcement that we were going to do it. Then the economy got tough and we pulled in our horns. They can feed off of each other's earnings and if one does a little poorer than the other, then it's not left out there on its own as a very small public company.
We came very close to doing it in 2008 or '09 and when the recession came, we had the same issue again. It's kind of ironic that we've talked about doing this for 25 years and never have done it.
We've hired Raymond James (financial advisers) to advise our board whether it makes sense to do it now. I will be meeting over the next six months and try and make sure it makes sense. There's a world of logic behind it, but it will also be two pretty small public companies, and that's the downside to this.
It's a work in progress. Someday we'll do it, whether it's this day or some day later.
You're very much a family company. Do you have any advice for family businesses?
We've been very lucky. Family businesses can be very hard both on the business and on the family. By the luck of timing, my brother came along and started the business and was president at a very young age because my dad had been doing it for 30-40 years and wanted to take some time off.
My brother is 13 years older than I am, so there was never a sense of rivalry between us because he hired me, he was my boss, he had a lot more experience and knowledge than I did, so there was never a bit of jealousy.
Now Tom Baker, who is running Patriot, is 10 years younger than me. He's my brother's son. We've all gotten along well.
Is there another generation on the way?
My son John is working at Patriot today. My son Ted has started his own aggregate company, like Florida Rock, that he's trying to build up.
When you transitioned from Florida Rock to Patriot, we talked about your desire to give back in the area of public education. How have you transitioned and translated that into KIPP Schools and the Tiger Academy?
I grew up in Jacksonville, lived here all my life and I love this city. But it was terribly clear to me, and obviously everybody else, that in the great growth that we were having as a Super Bowl city, and a pretty doggone good real estate economy there was a big part of our population that wasn't sharing in that good times.
There was a racial divide that troubled me. You had the business community doing wonderfully well and you had the black community that had trouble with poverty, crime and tough conditions, and I wanted to do something about it.
I didn't have any idea what a business guy could do to help that and so whenever I had a chance to talk to black leaders, I'd always say, what can a guy like me do to help?
It was eerily consistent that every one of the black leaders said, "You know, our generation is really gone. If you want to do something, help the children because the schools in our neighborhoods are not up to par."
I remember trying to figure out how you started a school in a black community. We learned about charter schools and how that was a viable way economically to get involved. I looked around a lot of other cities like Jacksonville and most of them had either a KIPP School or some other charter school where black children were excelling. I wanted to bring that to Jacksonville, so we applied to KIPP twice and were turned down.
I was getting frustrated because they turned us down because they didn't think that Florida's scale of reimbursement to charter schools really gave you a chance to make it. It was just too low.
I was chairing the YMCA's long-range planning committee and the head of the Y said, "I think one thing we ought to consider is a charter school in the black community near our Johnson Y," and I said, OK, let's go, I'm in.
So we began construction on Tiger Academy near the Johnson Y. We modeled it after the KIPP School, which is a model that says to every child as they come in, you're going to college. And to every child's parent, these children are going to college, and may be the first in their family.
Every classroom is named after a school. There's the Princeton School, there's the Florida School, and everybody seems to want to be in the Gator classroom.
The kids are in the class that they will graduate from college. So if they are in a class of 2027, there are all kinds of gimmicks to make it a mind-set that they can go to college.
Probably the most important thing is to build character traits that will enable those children to go through the many roadblocks they're going to have to go to college — grit, determination, and all those things that make somebody successful.
Talk about KIPP in Jacksonville.
We have one campus. A wonderful story was that when we got KIPP, we went up to New York, we were going to sign the contract, and they said you've got to agree to build five schools and fund the construction of those schools.
I knew that was more money than our group could afford to do, but I also knew that if we didn't say we'd do it, we were toast.
We came back and went to see Mayor (John) Peyton. We asked if he would give us some buildings that we could use to build these five schools in over time.
He'd been a huge supporter and helped us get the KIPP Schools. He laughed and said, "We don't have any extra buildings. You'd fire me if I had extra buildings."
Susie Wiles, his administrative chief of staff, was sitting in a corner and said, "This is strange, but 15 minutes ago Howard Korman came in here and offered us the dog track on McDuff as a community center and we told him we had zero interest in it, but maybe you should talk to him about that."
That was the difference maker. It wasn't exactly configured to be a school, but luckily, it wasn't that hard to remodel it, and so we'll have at least three schools in that building. We've got 23 acres, so we can build others there. It was an absolute blessing.
We're on one campus and we have a middle school, which in KIPP is the fifth, sixth, seventh and eighth. We recently started an elementary school and we have kindergarten and first grade there.
Do you spend a lot of time at the schools?
I spend a fair amount of time at the schools, but the way I've always tried to run businesses is to let the people that are running them run them and I just try to give guidance.
You invested personal funds into the schools and you also brought together a group of business leaders to help fund that, correct?
This is not a hard sell. People that love Jacksonville get that this can make a difference.
What were your goals for schools?
That the children will be excelling, whether they're in kindergarten or eighth grade that they'll be in the top quartile as a group. I want to build it up to 2,500 children between KIPP and Tiger Academy.
More importantly, I want it to be an undeniable statement that the poorest of our children can learn and excel if given the proper opportunity.
We have a longer school day and a longer school year at KIPP; it's 60 percent more time on task than regular schools. In our view, that's what it takes.
We will measure every one of these kids, whether they go to and through college. We just hired a KIPP-to-college person that will help our eighth graders get into a college prep school and eventually help them get into college.
How are you finding the measurements of success?
We're in our fourth year. We have made some progress, not the progress I had hoped. We were a B-school last year at the middle school. We're a C this year. Our FCAT scores, I believe, are accurate when I say we are among the highest in the Northwest quadrant.
They're not where we want them to be or where we think they can be, but that will happen.
At KIPP and at Tiger, the kids come in as kindergartners and begin rising up. That's when you see the real eye-popping success.
Tiger's third grade, which had been with us since kindergarten, was in the top 10 percent of third-graders. The KIPP kindergartners were in the top 25 percent of all KIPP schools in the United States.
That's probably the long-term secret of success — to have kids from the beginning.
You grew up in Jacksonville. How has the area progressed?
It has progressed amazingly. I can remember as a kid smelling the paper mills, thinking it was just sort of a big small town, and then seeing it grow and really blossom into a neat, neat city in my view.
It has always been a great place to raise a family.
Now I think it's a great place to not only raise a family, but to be a young professional.
I think we took a big hit in the recession, but we're coming back and I think that's true of many cities like Jacksonville.
We're not coming back as fast as we'd like, but we are coming back.