As reported in Milwaukee Journal Sentinel by Jeff Bentoff, for Phoenix Investors
In Part II of a wide-ranging interview, Phoenix Investors Chairman and Founder Frank P. Crivello discusses Phoenix Investors’ philanthropic initiatives and the future of industrial real estate after the COVID-19 pandemic ends. Part I covered Phoenix’s founding, business strategies and projects that helped revitalize areas in Milwaukee and Flint, Michigan.
Q: What is Phoenix Investors’ philosophy on philanthropy?
A: We live by the biblical passage “To whom much is given, much is required.” Since 2015, we’ve donated millions of dollars to many nonprofits and charities in the communities we serve.
Q: What do you look for when choosing groups to support?
A: The majority of recipients do work around education, children, and minorities. We’ve sought out leading organizations that are passionate about their mission and good stewards of the financial gifts we and others have given them.
Q: What are some of the local Milwaukee groups you’ve supported?
A: We’ve donated to literally dozens of nonprofits in the communities where we work — to institutions like Marquette University and the Milwaukee Art Museum; to smaller organizations like the African American Chamber of Commerce of Wisconsin, Running Rebels, Sojourner Truth House, New Horizon, Pathfinders, and Riverwest Food Pantry; and to nationally affiliated charities like Boys & Girls Clubs of Greater Milwaukee.
Q: Can you give us more details on a couple of donations?
A: We donated a former Albany Winn-Dixie grocery store worth $2.35 million to the Southwest Georgia Project for Community Education Inc. This nonprofit organization, which advocates for social justice through grassroots organizing, plans to use the facility to build a food hub-farmer’s cooperative for farmers in southwest Georgia and Albany residents. Another project I’m proud of is our role in a new library for the Milwaukee-area village of Brown Deer. We sold a bank building for the new library and then donated $1.5 million of the proceeds to the project.
Q: Do your philanthropic goals ever drive redevelopment initiatives?
A: Yes. Some of our projects begin with trying to address a community need rather than doing a deal. For example, in 2013, I met with Dr. Lyle Ignace, who was running a Native American health facility in Milwaukee in a terrible building. He badly needed a new facility. So, we acquired and redeveloped the former Goldmann’s Department Store building on Historic Mitchell Street into the Gerald L. Ignace Indian Health Center, named after Lyle’s father, who pioneered community health services for Milwaukee’s Native American community. The project gave them a much better facility and grew services to include behavioral health, dental, and pharmacy. Today, Ignace’s patient base exceeds 7,500 people a year.
Q: Switching gears, let’s talk about COVID-19. Like the rest of the world, Phoenix Investors is now dealing with a pandemic. How did it affect Phoenix initially?
A: Up until COVID-19, I thought I had seen it all in my 38-year business career. As the impact of the coronavirus hit in March, we tried to sort out what it meant to us and what we should do. First and foremost was ensuring a safe work environment for our employees. Would tenants pay rent? Would tenants lease space? In April, rental payments were slow as companies closed, and staff wasn’t available to make timely rental payments.
Q: Where are you now with the disruption?
A: By May, things were much better, and by June, normal. Surprisingly, there’s been a positive impact from the pandemic on the leasing side. COVID-19 has been so hard on many segments of real estate — but we’ve seen an explosion in the demand of industrial space across every single market we’re in.
Q: How do you think the COVID-19 pandemic will affect businesses over the long term?
A: While COVID-19 has changed everything, our industry is as well positioned as any can be for this new normal. The decades-long reliance on just-in-time manufacturing and how inventory is managed is over. Businesses will have to maintain more raw materials and finished goods, and they’ll need sites in the U.S. to house them and make products. Industry analysts have predicted there will be additional demand for over 1 billion square feet of industrial space that doesn’t currently exist. What isn’t clear is the future of office, retail, hospitality, and restaurants. Many won’t come back.