If you're not looking to lease commercial real estate and you don't often attend charity galas, it's quite possible you've never heard of Edward St. John. But whether it registered or not, you have surely seen his name.
His company, St. John Properties, owns more than 13 million square feet of apartment buildings, office, retail, and warehouse space. Its grey-and-yellow signs are ubiquitous throughout Maryland and Virginia. And the firm's real estate investments are conservatively valued at about $1.1 billion.
But there's more to the name than just wildly successful capitalism. If you're a fundraiser and you're doing your job, you definitely know the name Ed St. John, who's well known in business circles for making bags of money. But to the general public, he's more likely to be known for giving it away.
Taciturn and direct, St. John found success by being methodical and logical, relying on a tried-and-true formula that's maybe even a little dull. (Warfield's Business Record once called him the King of Mundane.)
But this Baltimore-born real estate powerhouse doesn't have an MBA and he didn't grow up dreaming of becoming a developer. In fact, it may be because St. John never intended to go into real estate that he's been so successful at it. Smitten with the idea of becoming an astronaut, or test pilot as they were known at the time, St. John joined the Air Force ROTC and majored in electrical engineering at the University of Maryland. Circumstance diverted him from his passion for flying, but his education paid off.
"I really attribute 80 percent of my success to my engineering degree," says St John, 70. "One of the concepts in higher mathematics is you take the equation to infinity, and at infinity the solution becomes obvious."
He provides an example: A child slaps another child. Do you reprimand the child, or do you try to explain away the behavior? For the answer, he says, imagine the same scenario magnified.
"Take the problem to infinity; take it to its unbelievable seriousness," he says. "The child picked up a pair of scissors and shoved it into the throat of the other child. Do you punish the child? It's obvious there what you do; at infinity it's very obvious what you do. Just take it back, so the answer is absolutely, you correct the child."
Not that he's necessarily saying a jay-walker should go to the electric chair. But reacting immediately before something becomes a larger problem is his credo. How would he react if the current situation were 1,000 times worse, he asks himself?
"Then that's how we should react now," he says. "In a lesser way, but definitely react in that same direction."
And he's applied that theory of decision-making to great advantage. In September 2005, during the housing boom, his company shorted tens of millions of dollars in housing stocks (basically betting their share price would fall) because he felt the market was "out of kilter" and that history did not support the rising valuations in real estate.
"I had people calling me, wondering if I had lost my mind," he says. "Then the stock collapsed. And we're still making money. A whole bunch of it."
And in August of 2007, he read three stories in three days about different European banks teetering on the edge of bankruptcy because of U.S. subprime mortgages.
"One of the articles I read said it was the worst banking crisis in Germany since 1932, and that brought Adolf Hitler to power. And so I said, 'My God, if this continues, this could destroy the American stock market and the American banking industry.' So I immediately pulled out all our money from the stock market. Every penny," he says. The money is still not in the market, which has fallen about 7.5 percent since then. Instead, it's in six-month Treasury bills. "And I had all these brokers calling me and telling me that I had lost my mind-again. Now, in the last month or so, the brokers have been calling us and asking where the crystal ball is."
He won't say exactly how much money he's made, or saved, on these deals. But he is happy to discuss how much money he's given away because he hopes it will inspire others to do the same.
St. John was not too interested in philanthropy when he first ventured into commercial real estate in 1967. It wasn't until about 15 years ago that he started handing out serious money. And once he did, the floodgates opened.
Lacking a formal donation process, he pretty much gave money to anyone with a worthy cause. One associate described him as a walking ATM machine.
"And then about 10 years ago, we sat down and said, 'We're giving all this money away. What do we want to accomplish with it?'" St. John says. "I've always been a big proponent of education. Our feeling is very simply that education is how we're going to break the chain of poverty. And it's been proven over and over."
The Edward A. St. John Foundation generally focuses on kids in pre-K through 12th grade. Charitable endeavors include scholarships at Saint Ignatius Loyola Academy in downtown Baltimore and the private McDonogh School in Owings Mills, which St. John's three children attended. St. John also pledged $10 million to McDonogh in 2006 for a new student center. All told he's given away about $41 million.
"He's a man of few words, but when it counts, he's there," says James Piper Bond, president and chief executive of Living Classrooms Foundation, a non-profit in Harbor East that runs a middle school and sailing-based learning program for inner city kids. Last year, St. John agreed to pledge $1 million to the overcrowded school for a new building. Additionally, his development firm will build the facility at cost, making the money go even further. "Ed's very personable, but, at the same time, he's a bottom-line guy. He wants to see results," acknowledges Bond.
He's not one for small talk so St. John can, at first, seem a bit aloof. But his friends and associates see another side.
"Had he become an astronaut, he would have challenged and questioned the configuration and alignment of the stars," says longtime friend Lou Grasmick, a developer and lumber magnate. "He's the most detail-oriented person I've ever met. He's also one of the most honorable and decent guys I've ever had business dealings with and, without question, he is a treasured friend."
In 2004, the Maryland Science Center underwent a $35 million renovation, with $2 million coming from St. John, who also headed the building committee. Van Reiner, president and CEO of the Science Center, said that in addition to the donation, St. John spent hours in meetings, acting almost as a project manager for the expansion.
"There's no question in my mind that he really cares about the mission of the Science Center and setting that spark in a child that may pursue a career in science or technology or engineering or mathematics," Reiner says. "People say he's intimidating, but he's focused. He wants to know what the goal is, how you're going to achieve your goal, and he wants to know why you're doing it. He's a detail guy and he's got high standards. Some might find that intimidating, but if more people had high standards and held people accountable, we'd get more things done."
It was due in part to the expansion of the Science Center that the company changed its name in 2005. St. John started his business in 1967 with Leroy Merritt-owner of Merritt Athletic Clubs and numerous real estate developments-and they called it Patapsco Industrial Center. After the pair went their separate ways in 1971, St. John called his company Maryland Industrial Enterprises. When they expanded into the retail sector, they were told to lose the "Industrial," so they shortened it to simply MIE Properties.
"I changed the name [once more, to St. John Properties] for a couple of reasons," St. John recalls. "We had started the foundation and were making donations to people in the name of the Edward St. John Foundation. And we were using it, we thought, as a marketing tool. I was in the Science Center one day during the renovation, and there was the Edward St. John Dinosaur Hall, and when you went up to the second or third floor, there was the MIE Properties IMAX Theater. I was standing there and somebody said, 'Gee, I wonder who MIE is.' "
"So it was for marketing purposes and because we wanted to stop the question we were asked at least three to five times a week: 'What's MIE mean?'"
St. John began his partnership with Merritt after his family's businesses fell under his control.
When St. John was 16, his father died at age 61 (as did St. John's mother and older sister, which is why he eats vitamins by the handful and works out regularly). After his father's death, his mother ran the businesses while St. John finished high school and attended college. The businesses focused on building-supply manufacturing and distribution as well as ownership of a handful of small buildings that were leased out.
Near the end of his time in college and Air Force ROTC training, St. John's mother told him if he didn't stop "this flying foolishness," she was going to sell the companies; she had kept them intending to hand them over to him. Over a six-pack of beer, he and his college roommates decided it made sense for him to take over the family businesses. (Today, he says that was the biggest mistake he ever made; business could have waited, but there's a limited window of time in which someone can become a military test pilot.)
The distribution part of the business had paper-thin profits, and the manufacturing side seemed just plain boring. But St. John discovered he liked working with the tenants who leased his building space.
He ran some numbers and decided real estate could be a profitable enterprise. But he wasn't a builder, so he went looking for a partner who was. After hearing that Merritt, who at the time was a house builder, was an honest businessman, St. John paid him a visit and the two drove around Baltimore County looking at all the locations on which they could build.
"None of which we ever did," remembers Merritt. "However, in the course of being together, Ed pulled these plans out and said, 'What do you think of this?' I said it looks like a piece of paper with four lines on it. He had hand-drawn the plans for a warehouse."
The two built warehouses together for four years before Merritt said he wanted to go out on his own. ("I didn't want to work that hard," he quips now.) Although their personalities are polar opposites-Merritt is outgoing-the two have remained friends and each controls about 20 percent of the region's commercial real estate market.
And that puts St. John in the company of the area's highest-profile entrepreneurs. Along with Grasmick, one of his closest friends is builder and bakery magnate John Paterakis Sr., the man responsible for constructing the virtual Crystal City that has risen from the once-dilapidated waterfront of Harbor East. And the twice-divorced St. John met his fiancée, software representative Mary Katherine Wood, on a blind date arranged by Cheryl Krongard, a former partner at a New York private equity firm and wife of A. B. "Buzzy" Krongard, former chairman and CEO of Alex. Brown & Sons Inc. and former executive director of the CIA.
Yet visit St. John's office and you won't see an ostentatious display. St. John, who drives a blue Chevy Suburban, has an office that's the same size as his high-level associates-and it's not even in the corner. He laughs when asked about this: "I don't need a big fancy office to tell me who I am," he says. "I really don't."
But he does need a vacation now and then to clear his mind. An accomplished skier, St. John owns a house in Aspen that he visits several times a year.
"If you're skiing down a hill, you pretty much can't have your mind on business; you're trying not to get hurt," he says with a chuckle.
Locally, he's also got his 15,000-square-foot home on the Severn River, providing him with the opportunity to indulge his passion for boating; he owns a 48-foot cruiser and a 65-foot yacht.
Paterakis says St. John became a success because he stayed on a straight-and-narrow path."Ed is a good businessman in today's world," he says. "He's got a formula and he does not deviate from that formula. He makes the rules and expects his people to abide by them, and when they do, they're going to have a good working marriage. If they don't, he won't put up with it and that's fine."
Paterakis says if St. John is in a meeting with five or six people, he'll be very quiet. But at the end of the discussion, if his thoughts are solicited, he'll say, "I'm glad you asked," and then proceed to offer his opinion and advice.
"He's the person you really want as a friend," says Paterakis. "If Ed St. John's your friend, you do have a gem. Better than a diamond."
He's also a good person to have as a friend if you need to raise funds for a charity or political race. He's hosted a variety of benefits, including a fundraiser in May for former Republican presidential hopeful and New York mayor Rudy Giuliani. Although campaign records show that on a national level St. John's donations primarily go to Republicans, on the local level he gives to both Republicans and Democrats. He was the focus of a 2005 piece in The Baltimore Sun about donors who use a loophole in campaign finance laws to legally give large amounts of money to politicians-including tens of thousands of dollars to both Robert Ehrlich and Martin O'Malley during 2006's governor's race.
"He has a real humanitarian side to him that you probably wouldn't recognize upon first meeting him," says Baltimore County Executive Jim Smith, who has also received campaign donations from St. John. "He's much more generous and much more compassionate than you would expect initially because of the hard-driven nature of his personality."
Last year, Smith and St. John were returning from New Jersey where they had been promoting the Baltimore region as members of the Baltimore Economic Alliance when Smith mentioned that a middle school in the county serving troubled kids needed about 400 laptop computers.
"I said, 'I know you have your foundation, what do you think?'" says Smith. "He made a phone call and came back and said, 'We can do that.' "
The person he called was Sharon Akers, whom he hired last year to head the foundation. She's trying to keep it focused on its core mission; in fact, St. John is not even on the contributions committee.
"The problem was that Ed is so philanthropic and so generous and has such a big heart that people were getting support for a myriad of things well outside the mission," she notes. "He wanted the contributions to stay focused."
One recent contribution was indeed outside of the foundation's mission, but clearly something that made sense for the company. An advisory board member for Johns Hopkins University's masters in real estate program, St. John was at a meeting where someone lamented the fact that so few people who completed the program actually went on to become developers. Characteristically, St. John listened, then raised his hand and said, "I can tell you why." He posited that because the program was aimed at people already established in their careers, who had mortgages and families to support, graduates were not likely to give up everything and become developers. Instead, it should be a fast-track Masters of Science in Real Estate program aimed at those right out of college.
Hopkins liked the idea so much they asked St. John to fund it. He did, contributing nearly $6 million.
Michael Anikeeff, chair of what is now The Edward St. John Department of Real Estate at Hopkins, says that at graduation last year, one student sitting beside St. John mentioned how rigorous the program was and off-handedly said he could use a vacation.
"When Ed got up to speak he made some remarks, then added that he was going to give each of the graduates $1,000 so they could take vacations," Anikeeff says. "And 10 days later, everyone had the checks. That really gives you insight into who Ed St. John is."
