ELS Critic’s Shareholder Proposal Falls Short

May 14, 2013 by · Comments Off on ELS Critic’s Shareholder Proposal Falls Short 

Sam Zell

Critics of Chicago business tycoon Sam Zell’s mobile home park business tried a new tactic in their campaign against the company at its annual meeting on May 8. It didn’t work, the Chicago Real Estate Daily reported.

Durham, N.C.-based Reinvestment Partners, an advocacy group and shareholder in Equity LifeStyle Properties Inc. (ELS), pushed a proposal at the meeting designed to shed light on the company’s political activities, including efforts to strike down rent-control ordinances on the West Coast. (Click here to read an earlier account in Woodall’s Campground Management based on an ELS news release and a filing with the Securities and Exchange Commission.)

But shareholders voted to reject the proposal, which called for the Chicago-based real estate investment trust to publish an annual report that would detail “direct, indirect and grassroots political contributions,” such as a $50,000 donation made in 2008 to support California Proposition 98, which sought to phase out rent control in the state.

Click here to read the entire story.


No Commitment Yet on CEO Shift at ELS

October 9, 2012 by · Comments Off on No Commitment Yet on CEO Shift at ELS 

Sam Zell

Equity LifeStyle Properties Inc. (ELS), founded by Sam Zell, said its chief executive officer hasn’t made any commitments to become CEO of Equity International, another firm started by the billionaire investor, Businessweek reported.

Zell plans to recommend Equity LifeStyle’s Thomas Heneghan for the CEO position at Equity International after last month’s departure of Gary Garrabrant from the closely held global real estate investment firm, the Wall Street Journal reported yesterday. Heneghan told Chicago-based Equity LifeStyle Properties Inc., which owns RV and manufactured home communities, that he hasn’t committed to taking the new post, the company said in a statement on Monday.

“Even if my role as CEO changes, given my strong relationship with our chairman I expect to be able to continue contributing to the company’s success in the future as a member of the board,” Heneghan said in the statement.

Zell and Garrabrant founded Equity International in 1999 to invest in real estate in fast-growing emerging markets. The company has teamed with local operating partners on investments in 14 countries, including Mexico, Brazil, China and India, according to its website.

Zell, 71, took over as interim CEO of Chicago-based Equity International after Garrabrant’s departure. Zell also is founder of Equity Group Investments LLC, a private investment firm that’s also based in Chicago and is more than 40 years old.



Zell Faces Protest at Equity LifeStyle’s Annual Meeting

May 9, 2012 by · Comments Off on Zell Faces Protest at Equity LifeStyle’s Annual Meeting 

Sam Zell

Best known as the Grave Dancer, Sam Zell was accused Tuesday of being something else: a grandma gouger.

A gaggle of about 20 protestors gathered outside the West Loop building in Chicago housing the headquarters of Equity LifeStyle Properties, the nation’s largest mobile home park owner, led by the billionaire financier, the Chicago Real Estate Daily reported.

With the company’s annual meeting going on inside, the group urged ELS executives and directors, including Zell, the chairman, to stop “unreasonable rent increases” that they say have left residents of ELS-owned housing communities, many of whom are retirees, with nothing.

“(The demonstration) is the first step we see in a campaign to help the directors of ELS understand that there are other ways to do business than gouging grandma,” said Ishbel Dickens, executive director of Seattle-based Manufactured Home Owners Association of America, which organized the demonstration with Washington, D.C.-based Campaign for Community Change. “We hope to start a dialogue.”

As of Dec. 31, ELS owned or had an ownership interest in 381 properties in 32 states — including four in Illinois — the majority of which are in retirement-friendly locations like Florida, California and Arizona, according to the company’s annual report. The portfolio includes more than 140,000 lots that are leased to tenants who live there in factory-built homes, cabins and RVs.

The protesters argue that ELS has fought rent-control ordinances in some communities it owns, driving up their housing costs and depressing the value of their homes.

Bob Lamonica, a 61-year-old resident of an Equity LifeStyle park in Santa Cruz, Calif., said that shortly after he and his wife moved into the community in 2002, the company sued the city, challenging its rent-control ordinance. Ultimately the city decided to avoid a lengthy court battle, a move that “threw 230 families under the bus,” according to Lamonica. As a result, he said he and his wife were forced into a non-transferable 34-year lease that, despite keeping rent for the lot at an affordable level, essentially trapped them in their home and made it all but impossible to sell.

“They win by overburdening the communities with endless litigation,” he said, adding that he and his wife have put about $200,000 into their home. “People walk away — people who have invested $200,000 to $300,000 walk away for $1 because their rents get jacked up three, four, five times what they were under rent control” and they can no longer afford to live there.

When that happens, the company often converts the homes to vacation rentals, which further devalues surrounding homes in the communities, Dickens said.

Yet Equity LifeStyle’s performance hasn’t disappointed investors, who have seen the value of their shares rise nearly 20 percent over the past year, vs. a 1.8 percent gain for the Standard & Poor’s 500 Index.

Security guards at 2 North Riverside Plaza, where the real estate investment trust is based and held its annual shareholders meeting Tuesday, did not allow a reporter past the front desk.

An Equity LifeStyle spokeswoman did not return messages seeking comment. A spokeswoman for Zell, who founded Equity LifeStyle but wasn’t at the annual meeting, declines to comment.

Most people pick up and move if they think they are being overcharged by their landlord. But Lamonica said moving the resident-owned homes off Equity LifeStyle lots is so difficult that many residents feel stuck.

“There’s a misnomer about calling these things mobile homes,” he said. “They’re not going anywhere.”


Former ELS CEO Promoted at Sam Zell’s Investment Firm

March 9, 2012 by · 3 Comments 

Sam Zell

Billionaire investor Sam Zell has rearranged leadership at the top of his investment firm, hiring David Helfand and naming him and William Pate co-presidents of Equity Group Investments, The Chicago Tribune reported.

Helfand was previously CEO of Equity LifeStyle Properties Inc. (ELS), the nation’s leading manufactured housing and RV park developer. ELS is a publicly traded company Zell founded.

In an interview, Zell, 70, said that Helfand’s expertise in real estate and Pate’s expertise in corporate acquisitions and management is the mix the firm needs. David Contis previously led Zell’s real estate investments. He left the company last year to lead the mall group at Indianapolis-based Simon Property Group.

Zell said succession planning has been discussed. He said he knew who would succeed him should he be unable to work but declined to say who that would be.

“I don’t think that’s relevant to your readers,” he replied.

Zell has mentored Helfand for more than 20 years. Helfand is the son-in-law of real estate investor Neil Bluhm.

“My history is based on two pillars: real estate and corporate,” Zell said. Helfand and Pate have “very deep depth in one or the other, and the two of them together are one plus one equals six.”

Pate’s previous title was managing director, although many sources describe him as Zell’s chief investment officer. (“I would not know the title of anybody who works for me,” Zell said with some hyperbole, when asked why he created the position of co-president.) Pate has been with Equity Group Investments since 1994 and in the chief investment role since 2000.

He is on the board of several of Zell’s holdings, including Covanta, Exterran, Wapiti Oil & Gas and Tribune Co., the parent company of the Chicago Tribune. Zell is chairman of Tribune Co.

Helfand is joining the firm from Helix Funds, a $2 billion real estate management company he founded and managed for nine years. A subsidiary, Riverside Communities, is a large owner of manufactured home communities.

Coming with Helfand from Helix, which remains in operation, is David Weinberg, who previously worked for Zell’s Equity Office Properties, which the Blackstone Group acquired in 2007. Weinberg will be an Equity Group Investments managing director.

Zell repeated his mantras that he would be “chairman of everything, CEO of nothing” and that retirement was not in his “lexicon.”

“The reality is that I’ve spent a lot of time with David, even during the years he wasn’t working for me,” Zell said. “I’ve probably spent more time with David than any individual in my organization, and it was a natural evolution for us to keep talking about different stuff and how I wanted to move on.”

Zell was listed No. 66 on the Forbes magazine list of U.S. billionaires.