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James Graaskamp taught all his students to do their homework before deciding to build something new.
Look at the numbers, he said. Analyze the market. Talk to your lenders.
It was solid advice then, and it remains solid advice today. Unfortunately, Stuart Ackerberg didn't heed it at first.
Ackerberg, a prominent Minneapolis developer and former student of Graaskamp's, inaugurated the E.J. Plesko Distinguished Speaker Series in Real Estate Development on Wednesday, April 25, at the dedication of the James A. Graaskamp Center for Real Estate. Ackerberg, CEO of The Ackerberg Group, whose recent investment in the Jordan neighborhood of north Minneapolis—an area hit hard by urban riots in the late 1960s — has helped spur renewed hope there, was selected as one who “embodies the Wisconsin real estate tradition in spirit, imagination, entrepreneurial skills, and enthusiasm for improving the quality of our built environment.”
The lecture, to be presented once each semester, is funded by a gift from developer E. J. Plesko, a Center advisory board member and president of E.J. Plesko & Associates, a real estate development and management company based in Madison.
Real estate developer E.J. Plesko donated funds to establish the E.J. Plesko Speaker Series in Real Estate Development
Most people enjoy recounting personal stories of success, and shy away from those humbling (sometimes humiliating) moments that tend to occur in between. But after he was asked to become the first Plesko speaker on real estate development, Ackerberg knew exactly what he wanted to talk about.
“About controlling my ego,” he said. “About being humble, and doing good quality work.” And though Graaskamp—who overcame polio in favor of a successful professional career—had hardly hidden this point of view from his students, years passed before it finally resonated with Ackerberg.
Stuart Ackerberg graduated from UW-Madison in 1979 with a bachelor’s degree in real estate, having taken such classic Graaskamp offerings as “The Real Estate Process” and “Feasibility and Appraisal,” curricular staples even now. Ackerberg worked in management for both Heitman and Birtcher Financial Services, then returned to Minneapolis in the mid-1980s to join The Ackerberg Group, a property management and construction firm founded in 1964 by his father Norman. At that time, the firm had already had a long history of development in south Minneapolis, known locally as Uptown.
But the younger Ackerberg started to dream of bigger things. The firm bought out another realty business, doubling its size in the process, then opened up a consulting arm. Over time, however, cracks started to appear: The company bought a shopping center and made plans to redevelop, only to find out it had no street access due to road construction. In another example, several commercial tenants at a different retail center filed for bankruptcy or moved away. The Ackerberg Group ultimately sold the property at a loss.
That, plus a few other consequences of the “quantity over quality” approach, as Ackerberg called it, finally caused him to sit up and reconsider. And when he did, the words of Professor Graaskamp started to resonate. “I had gone on autopilot and focused on cash flow,” Ackerberg said. “Instead of reading the clock, we got ours cleaned.”
“I had chosen to operate from outside in, not inside out,” Ackerberg continued. “I realized that I needed to be true to myself. Heart comes from within, not from outside forces. James Graaskamp knew it very well.”
Today, Ackerberg is one of Uptown’s most prominent developers, with credits including the Lake Calhoun class A office park, Lake Calhoun City Apartments, and Lumen on Lagoon, offering condominium homes above retail stores. Now the company is building the futuristic Mozaic condominium project as well. But, as he searched for new projects that made economic as well as emotional sense, he turned his attention to the city’s north side.
His mother and father had grown up there, and as a child, Ackerberg spent many days visiting his grandparents. But in the aftermath of the race riots, all changed. The commercial district had burned, and even after four decades, some residential neighborhoods “looked like a hockey player’s teeth” because so many houses were boarded shut, he said.
Today, as part of a coordinated plan by city nonprofits, government and commercial groups including Ackerberg’s firm, the area seems to be rebounding. In 2004, Ackerberg's company renovated a long-vacant building into a 24-hour child care center, and is now replacing four dilapidated single-family homes with new houses, to be sold at cost. A landscaping firm donated services to redesign a small park, and now Ackerberg is hoping to renovate a rundown church. Other homes in the north side will be rebuilt by a mix of public-private partnerships.
The company also spent $4 million renovating an imposing, empty building at 1101 West Broadway, now home to Emerge Community Development, a local nonprofit; a new branch of the City County Federal Credit Union; and Bean Scene Café, a coffee shop. Last year, the building won an award from the Minneapolis-St. Paul Business Journal for the “Best in Real Estate Award” in the Redevelopment/Extensive Renovation (small, commercial) category.
The company’s most recent acquisition is the DeLisi Building, another vacant and uninspired gray concrete building at a major northside intersection. Plans are to rehabilitate the structure into attractive office and retail space, with a pedestrian plaza at the intersection.
Ackerberg is hopeful that this style of urban redevelopment will be more successful than typical gentrification, in which redeveloped areas become too pricey for displaced residents to afford. The key, he says, is providing attractive and affordable housing, commercial space and jobs. Ackerberg knows he can assist with the first two, and hopes the market will supply the last. “We want to stimulate existing property owners to choose to fix up their assets,” he said. It won’t be easy, he admits. “It took many, many years for the neighborhood to deteriorate,” he said. “We’re making a 10- 15-year commitment, and we’re in year three right now.”
In the final analysis, Ackerberg found that minding Graaskamp’s words paid off, both financially and emotionally. “Real estate is a marathon, not a sprint,” he said. “Jim Graaskamp and my dad taught me that anything is possible, if we work hard toward our goal. And the difference between creating good and something great is not a lot.”