Sheldon H. Ginsburg & Perry J. Snyderman - Shell Vacations Club
By Rosalie E. Leposky
When or if The Shell Group, Inc., announces an association with a hospitality brand, no one will be surprised. Ever since entering the timeshare industry in 1978 at Vistana Resort in Orlando, Florida, the company has led or closely matched the leading edge of timeshare innovation.
The leaders of The Shell Group, Perry J. Snyderman, RRP, and Sheldon H. Ginsburg, CPA, RRP, met in 1962 at a family holiday party. "Perry and my ex-wife, Joan Kostinsky Plotkin, are distant cousins," says Ginsburg. Ginsburg was an accountant with real-estate and federal income-tax experience; Snyderman was practicing real-estate law. The two men began to refer business to each other and make joint investments. |
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| Perry J. Snyderman | Sheldon H. Ginsburg | |
"In early 1963, we decided we should become involved in real-estate syndication," says Ginsburg. "I ended up as Rudnick & Wolfe's accountant, and Perry became Sheldon H. Ginsburg and Company's attorney." Later that year, the duo established a corporate entity that evolved into The Shell Group, with Snyderman as president and Ginsburg as chairman of the board.
The Shell Group's Early Ventures
The two disagree on which project was their first. "It was either a 30- or 40-unit single-family subdivision in Riverwoods, Illinois, just west of Highland Park where we both live today, or Pine Point Lake Resort, a 110-room hotel in Elkhart Lake, Wisconsin, that is now a condominium development," Snyderman says.
"While we learned from our accounting and legal clients, we never saw ourselves competing with them. Over the years in Chicago and nationwide, we've developed 5,000 residential apartments units, 500 congregate-care housing units, 2,000 condominium conversions, and 2.25 million feet of commercial and retail properties -- shopping centers and office space -- including Snowmass Shopping Center in Snowmass, Colorado, and the three-building Sycamore Office Buildings complex in San Diego, California. Although we have sold off our congregate-living interests, we still own a significant number of apartment buildings, including a 92-unit historic landmark at 5100 Cornell Avenue near the University of Chicago campus."
In the early 1970s, Continental Illinois National Bank and Trust Co. was a trustee for Pick Fisheries, a large Chicago fresh-fish house on Fulton Street near the Kennedy Expressway. "One of the owners of Pick died, and we knew one of the other trustees," says Snyderman. "After discussing possibilities, we bought both interests. The remaining partner stayed for over 10 years and taught us the fish business." (The Shell Group sold Pick Fisheries in 1995.) Several years later, their association with Continental Bank helped The Shell Group obtain funds to purchase Vistana Resort.
At that time, Ginsburg and Snyderman were working with a number of real-estate syndicates. "Two separate people -- a real-estate broker and a retired general counsel for Allstate Insurance -- told us independently about Vistana, "recalls Snyderman. "We did not purchase Vistana through either of them, but rather from Gerald Wexler, a Chicago real-estate developer who held a contract on Vistana."
An old Florida Cracker, Orlando Realtor Gentleman Boy Sawyer, called Ginsburg to tell him about a property with 98 condominiums and 16 tennis courts on a largely-undeveloped 150-acre site that had been foreclosed by First Wisconsin Real Estate Investment Trust. "Perry and I went to Orlando, looked at the property, and studied Disney's day rentals," recalls Ginsburg.
"We asked Orange County if the Vistana zoning could be changed from residential to a hotel and asked Continental Bank to loan us the purchase price of the land and enough to build a couple of hundred additional units. We were not the only people interested in Vistana. We purchased the interest of another bidder."
Lonely and Forlorn
In 1977, Vistana had been abandoned for nearly three years. It had completed tennis courts, a hole dug for a swimming pool, other recreational features waiting to be built, and a property lender who had gone unpaid for nearly three years. "The original vacant Vistana buildings had no interesting architectural features," recalls Snyderman. "They were poorly built, with blocked plumbing lines, and they needed soundproofing."
Ginsburg and Snyderman asked two Chicago clients and a third Chicago firm to help them with Vistana. Miller Construction (now out of business) was already working in Florida. "We asked Chicago builder and real-estate agent Loraine G. Maroon, then chief executive officer of Northwestern Construction Co. and Manor Park Realty, to move to Florida to oversee the completion of construction and to manage Vistana," says Ginsburg.
"We hired Chicago interior designer Merilee Elliott, IIDA, of Merilee Elliott Interiors, Inc., to design Vistana's original interiors," says Snyderman.
Arthur "Art" Zimand, Vistana's former president (now chairman of Art Zimand Associates), became Ginsburg and Snyderman's second Vistana employee. He recommended Miami architect Barry Sugerman. "We built Sugerman's vision." says Snyderman.
Maroon Management
Maroon became a partner and executive vice president of Vistana. She is now a Realtor with Coldwell Banker, Solomon Group, Inc., in Kissimmee, Florida. "My partner, attorney Nathaniel J. Reed, and I knew Perry and Shelly in their separate identities," she says. "They were our attorney and CPA. In 1976 and 1977, when interest rates shot up to 18 percent, we decided building was too expensive. At just about the same time, Perry and Shelly took their option to purchase Vistana. They talked me into moving to Florida with some of our construction crews to finish construction and start condominium sales."
Maroon met and married her husband of 17 years at Vistana. Jim Maroon, now retired, spends a lot of time playing golf. He was Vistana's tennis professional and tennis director. Maroon left Vistana when it was sold to General Development Corporation in 1986.
"The Vistana I first saw was in shambles, worse than discouraging," says Loraine Maroon. "We cleaned up the property and finished construction. Then Perry and Shelly decided to turn the property into a resort. Vistana opened as a resort in July, 1978."
Maroon once told Snyderman, who would fly in to Orlando on Sunday and disrupt everyone's weekend, "When you come to town, I get jet lag."
The Timeshare Connection
"After we purchased Vistana we studied timesharing," says Snyderman.
Maroon is not sure how someone in her office heard about timesharing. Members of her staff, The Shell Group's Chicago staff, and Ginsburg and Snyderman attended the 1979 or 1980 American Land Development Association meeting in Denver.
Continental Bank recommended Zimand to The Shell Group. He became a Vistana consultant early in 1980, and Zimand president of Vistana later in the year. "Art told us about timesharing," says Snyderman. "He was the only one in the operation who could even spell the term. Art introduced us to Clayton A. Barnes, RRP, who signed his contract before Art.
"On July 8, 1980, a six-person staff started selling timeshare unit-weeks in 12 of Vistana's original 98 apartments. We sat in Chicago waiting to hear that Art and his staff had made their first timeshare sale.
"Our timeshare business was not really any different from our fish business. Shelly and I invested money, and brought in the knowledgeable manager. We learned about each of the businesses. The more we learned, the more we realized what we didn't know. A short while later, Raymond L. "Rip" Gellein, Jr., then vice president and division manager of Continental Bank's real-estate department, left the bank to run Vistana's administration while Art ran the timesharing component. In 1980, he became Vistana's chief executive officer and now is chairman of the board and co-owner of Vistana, Inc."
On December 31, 1986, The Shell Group sold Vistana to General Development Corporation for $33.7 million plus assumption of debt. Before selling Vistana to GDC, The Shell Group and their bankers investigated GDC. "We were satisfied when GDC paid cash for Vistana and retained all of its employees," says Snyderman. "Given what happened later (a major fraud case that led to GDC's bankruptcy), we were glad that we never owned GDC stock. Later still, when Rip and Art purchased Vistana, we supported them in every way we could."
Westward Ho!
Conditions of the Vistana sale precluded The Shell Group from the Florida timeshare business for several years. "We used our knowledge to develop simultaneous projects in California and Hawaii," says Snyderman.
In the mid-1980s, Scott F. Church, RRP, then the president of SFC DEV. Corp., and co-worker Helen Hai Won Langford flew to Chicago to make a presentation to The Shell Group. "Our presentation was turned down, but they liked our ideas," recalls Langford. "The Shell Group gave us the mission to find the resort that met their parameters. Scott and I found the Kona Coast Resort." (Church is now regional director for Kona Coast Resort. Langford served as vice president of marketing for The Shell Group and now is chief operating officer of Incredible Journeys Incorporated in San Diego, California.)
Kona Coast has become the largest timeshare resort in Hawaii. It began as a 14-acre, 68-unit condominium project that could be run as a hotel, with enough land on which to build 200 additional units. It remains one of Snyderman's favorite places to visit. "I personally own several Kona Coast weeks," he says.
The Shell Group later added more Hawaiian properties. It was the managing general partner for Maui Schooner, which sold out in 26 months.
In the early 1990s, The Shell Group contracted with Metropolitan Securities in Spokane, Washington, to sell Metropolitan's inventory at two Hawaiian timeshare projects, Lawai Beach Resort, originally constructed with 110 units and now expanded to 174 units; and Pono Kai Resort.
A real-estate broker told The Shell Group about Paniolo Greens Resort in Waikola Village, a mix of whole-ownership and timeshare condominiums. "Shell acquired 120 units of a 196-unit condominium development adjoining the fairways of Waikola Country Club and converted them to timesharing," Church explains.
Since 1990, The Shell Group has been one of Hawaii's top 250 companies. In the early 1990s, the firm formed Around the World Travel, a Honolulu travel agency, to help Shell vacation-owners travel to Hawaii.
In Arizona, Sheldon Ginsburg's son, Howard, brought the Orange Tree Golf and Conference Center in Scottsdale to the attention of The Shell Group. "Howard attended the University of Arizona in Phoenix and ran the Orange Tree marketing program," says Snyderman. "Now Orange Tree is sold out, and Howard is marketing Star Pass Golf Suites Resort in Tucson."
Joint Ventures
The Shell Group has been involved in several significant joint ventures through the years. In the late 1980s, Ginsburg and Snyderman formed Shell/Remic International of Calabasas, California with Anthony H. Genth, now co-owner of Alton Leisure Industries LLC, in a joint venture to provide planning, marketing, and sales services to resort projects in Canada, Europe, Latin America, Mexico and the United States.
In 1988, The Shell Group purchased a half-interest in James M. Watkins' Winners Circle Resorts International, Inc., and formed Shell Winners Circle, which ended in 1994 when Watkins bought back the Shell portion of Winners Circle."
In January of 1997, Edwin H. McMullen Sr. merged his company, American Resorts Inc., with The Shell Group. He now is a principal of Shell Vacations, L.L.C.
The Future
Ginsburg and Snyderman plan for Shell Vacations to double in size in the next couple of years by adding three new timeshare properties a year, including more international properties.
"Capital now is readily available," says Ginsburg, "and there are plenty of domestic properties. I'm convinced that what resorts lack most today is trained staff. Give me 20 good people and I can train them."
"We expect the timeshare industry to develop consistent target marketing to reach people who want to purchase a timeshare product, rather than people to whom we have to sell," Snyderman says.
"My ultimate dream," adds Ginsburg, "is to wake up on a beautiful morning in San Francisco and hear people say, "What a great day to buy a Shell Group timeshare."
Shell Group Hotels
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Canada
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Pine Point Lake Resort: Snyderman and Ginsburg learned hospitality managing a Midwestern Borscht-Belt Resort
Illinois law required new CPAs to work two years for an accounting firm, so Sheldon H. Ginsburg went to work for the Chicago-area accounting firm of Beckerman, Terrell and Co. after graduating from college.
"In April of 1961, my uncle Irving Ginsburg, knowing that I wanted to be an entrepreneur and go into business for myself, introduced me to one of his business associates, Max Stein, owner of one of the three resorts in Elkhart Lake, Wisconsin," Sheldon Ginsburg says. "Mr. Stein, whom I had perhaps met three times before, did more for my accounting career than any other person. On April 16, 1961, four days before my son Howard's birth, he gave me what every entrepreneur dreams about. He asked me to do the accounting for his resort, gave me an office with a desk and telephone, and told me, "To the extent that the income you get from me and any other accounts is not enough to live on, I will subsidize you until you are on your feet. I am doing this because I want you to take care of my books, in the right way, without having to worry where your next meal is coming from."
With Stein as his first client, Ginsburg set up the private CPA and real-estate practice of Sheldon H. Ginsburg and Company.
A True Mensch
"Max was a true mensch," he says. "My accounting firm grew and I never had to ask for the subsidy he offered."
Stein owned the 110-room Pine Point Resort in Elkhart Lake, about a two-and-a-half-hour drive from Chicago. From the 1950s to the 1970s, it played the same role for high-end Chicagoans that the Catskills did for New Yorkers of equal means. "Pine Point Resort opened each summer from Memorial Day to Labor Day," Ginsburg says. "It had a bar, a full dining room, and a night club. Each summer Max, his wife, and their son spent the summer managing the resort."
In the early 1960s, Stein tired of spending his summers in resort management. "Max asked if I or any of my young associates were interested in managing his resort," says Ginsburg.
"Immediately I asked Perry and a cousin, Paul Oleff, who was in advertising and marketing, to help. We told Max yes, and that we would spend each Thursday to Sunday in Elkhart Lake. This was our first hospitality effort.
"Until Max died recently, I visited him regularly. Over the years when there were hard times in my business life, Max always managed to find a way to help. I remained his friend, his accountant, advisor, and consultant - whatever he wanted from me."
A Different Side
During the summers that they managed Pine Point Resort, Ginsburg and Snyderman learned a different side of resort management from accounting and legal services. "Pine Point was less than a mile away from Road America, the first NASCAR race track," Ginsburg says. "NASCAR ran three races a year at Road America - Memorial Day, Labor Day, and one weekend in August. The races attracted repeat driver guests, including actor Paul Newman and comedians Dick and Tommy Smothers, and thousands of young college kids up for the party."
Students came to Pine Point Resort, one of Elkhart's few bars, to purchase beer for a dollar a can. "We made a profit on our beer sales," says Ginsburg. "For crowd control, we hired U.S Marines as doormen. The Elkhart crowd act exactly like spring breakers in Fort Lauderdale. Women took off their clothes and people climbed in the trees."
Beer and Labor Travails
In the middle of one weekend, Pine Point Resort ran out of beer. "I called the distributor, who said he would send a beer truck if someone secured our long driveway," says Ginsburg. "Balding, six-foot tall, six-foot wide Perry, then in his early 30s, became the designated beer-truck guard. Perry met the truck at the front of the resort property and started walking ahead of it back to the hotel building. About halfway down the drive a man dressed in cut-offs, with no shoes or shirt, carrying a big piece of cooked turkey, saw Perry coming and tried to wipe Perry's head with his greasy hand. Perry leveled him."
Pine Point Resort offered hotel guests a modified American meal plan that included breakfast and dinner. "One busy, hot weekend with 250 registered guests, at 1 PM the chef came up to me representing our whole crew of six men and three women, and said," Mr. Ginsburg, we've decided we all need a raise."
I said "You can't quit. You have a contract."
The chef said, "Do we get the raise or are we quitting?"
I said, "Are you sure?"
He said, "Yes."
I said, "You're fired."
The kitchen staff walked out.
Pine Point served dinner daily at 6 PM.
"Our full dinner menu," Ginsburg recalls, "included appetizer, beverage, desserts, four entrees, salads, soups, vegetables. I never cooked before or since, but I cooked dinner that evening. The next morning all nine staff members showed up and asked how dinner was. I said everyone ate well, and they all went back to work." The staff did not get a raise.
Lessons Learned
During those summers, Ginsburg says, he and Snyderman learned three important business lessons:
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To run a business successfully, you personally must know how to do everything.
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If a staff person gives you an either-or situation, always take the or.
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Cross-train all of your employees. Timeshare operations have to be interactive with
hotel operations.
The Shell Group Name: How The Shell Group got its name
In 1963, Sheldon H. Ginsburg and Perry J. Snyderman started what became The Shell Group by developing with a mutual client, Little Stone, a building at 1237 Noble Street in Chicago. It had 10 apartments and two retail stores. As long as they owned the Noble Street building, Ginsburg's father managed it.
Then they purchased a parking garage at 1515 Morse Avenue in Chicago's East Rogers Park neighborhood. They tore down the garage and built their first major building, the five-story Surrey House, with 68 apartments and underground parking. Although they sold it a long time ago, it remains a rental apartment building.
"Our press release announcing the demolition of the garage and construction of the new project, Surrey House, mentioned Sheldon H. Ginsburg, CPA," Ginsburg recalls. "Perry's name was not mentioned.
"Some of the local papers published our release. About a week later, I received a call from the head of the ethics committee of the Illinois Society for CPA."
The conversation went as follows, with a man whose name Ginsburg has long since forgotten.
The Caller: "Mr. Ginsburg?"
Sheldon: "Yes."
The Caller: "Mr. Ginsburg, are you aware CPAs are not
allowed to advertise?"
Sheldon: "Yes."
The Caller: "You know, you have violated the CPA code of ethics and could lose your
CPA license."
Sheldon: "What are you talking about?"
The Caller: "I have seen the newspaper account of the building you plan to
develop."
Sheldon: "That is not advertising."
The Caller: "Oh, yes it is."
Sheldon: "What would you like me to do?"
The Caller: "Form a shell organization."
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The shell organization they created, Shell Development Corporation, subsequently evolved into The Shell Group and Shell Vacation Club. |
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Rosalie E. Leposky is managing partner of Ampersand Communications, a news-features syndicate based in Miami, Florida.
For More Information
Shell Vacation Club - http://www.shellvacationsclub.com
© Copyright 1998 Ampersand Communications
All Rights Reserved
Published in The Resort Trades, February 1998.