Jerry Snyder has spent the last 56 years learning the lessons of development in Southern California the hard way. Snyder built an empire of iconic office buildings that include the Wilshire Courtyard on Wilshire Boulevard’s Miracle Mile and the Water Gardens complex in Santa Monica only to nearly lose everything during the recession in the 1990s. Only now, at age 75, does Snyder feel like he’s at the top of his game. And so he should: He has at least $1 billion worth of redevelopment work on his plate, from rebuilding a 10-block portion of downtown Ontario to NoHo Commons, the mixed use housing project in North Hollywood.
Question: You’ve been in the development business for more than a half-century. Have you ever seen construction in L.A. County on this large of a scale before?
Answer:
It’s unprecedented. It’s been the best of times for people in my business for the last several years, but I keep waiting for the other shoe to drop. I’ve been through six or seven down cycles, some of them self-inflicted. Sometimes it’s your own fault, not necessarily the economy’s. Maybe because of that, I keep expecting it to end.
Q: With commodity and land prices at an all-time high, maybe it will come to an end sooner than anyone thinks.
A:
I don’t think the high cost of steel or lumber or concrete is going to have that much of an impact. Commodities would have gone down had it not been for Katrina, which was just another excuse to raise prices again. Without the hurricanes, demand isn’t there any more. China isn’t importing as much. A year ago it was nearly impossible to find rebar in this town, but now you can get it pretty easily. Besides, as long as you can get a 30-year loan at a 5.5 percent interest rate, almost any increase in costs can be mitigated.
Q: Are you betting the housing bubble will burst or slowly deflate?
A:
I don’t know. I’ve tried to position my company so it’s protected. We have a lot of retail projects that are pre-leased to credit tenants. We’re doing a lot of redevelopment work with homes that have low price points for entry buyers. That’s not a speculative market. And we’re getting subsidies to build it. We’re not out building $1 million units. I’m hoping that if there is a problem and rates go up, there will always be a need for homes for first-time buyers.
Q: Has it become harder to make predictions about where the market is going?
A:
Nobody has a crystal ball. I’ve learned that every time I think something is going to happen, something else happens. The best you can do is trust your instincts and rely on what you know. We’re all cowboys anyway.
Q: When did you hit rock bottom?
A:
Oh, I think 1991 was the lowest that I sunk. That recession was terrible. It felt like it would never end. I made some guarantees I never should have made, and I got myself into a couple of deals that worked out badly. Suicide felt like an option. On one project in the Marina, I had to declare bankruptcy because the lender wouldn’t restructure my loan. It took me eight to 10 years, but eventually I was able to make everything right.
Q: How are you hedging against a repeat?
A:
We are a very agile company. We can switch from one project type to another if the market changes underneath us. A couple of years ago we were building a technology office park in Agoura Hills and I woke up at 3 in the morning and realized “Wait a second, there’s no office market in Agoura Hills. What am I thinking?” And the next day we scrapped those plans and instead we’re building a retail and housing development. In this market, swings happen very quickly, and you have to ready to adapt.
Q: Is there any kind of project you avoid?
A:
We stay away from entitlement battles. There’s no way to win. To get zoning in West L.A., for example, is nearly impossible.
Q: But you and partner Bob Bisno bid aggressively on Hollywood Park in Inglewood. Wouldn’t that have been an entitlement battle?
A:
I don’t think so. The city and the unions want that area redeveloped. It’s an area that needs redevelopment. What’s economical and what the city wants could be two different things. In the end, it will get done because the area needs the investment and the jobs.
Q: Are you upset you didn’t win the bidding on Hollywood Park?
A:
I only like to count the ones I win. To me, coming in second is like coming in fourth.
Q: What about Grand Avenue? Do you regret not winning the competition?
A:
I think about that one a lot. We came in third, but it was such a great experience. The energy and ideas surrounding that project are really great. Related Cos. was the favorite from the start but they do great work. In the end, (the Grand Avenue Committee) gave the job to the right guy.
Q: Are there developers you admire?
A:
I’d have to split it between retail and office. When it comes to retail, it’s Rick Caruso, hands down. He does a marvelous job. I admire him a lot. In office, it would be (Rob) Maguire. He does some very creative stuff with a very high quality of design.
Q: You’ve got $1 billion worth of redevelopment projects right now. Is there one that’s your favorite?
A:
My favorite project is always the next one. I’ve got a short attention span, and I like to let my guys handle the details of the projects. I like to focus on that next deal.
Q: How come you’re not doing projects in downtown L.A.?
A:
We’re not in downtown on purpose. We just haven’t found the right project. I’m totally amazed by what’s happening downtown. Towers are going up next to the Staples Center and lofts are selling out before they’re even built. I wouldn’t have seen it coming.
Q: How did you move to Los Angeles from Brooklyn?
A:
My father was a carpenter and a small contractor. He wanted to move to California so he worked his way across in his Buick, hanging doors and picking up odd jobs along the way. Once he was here, he sent for me and my mother and we came out on a Greyhound bus.
Q: Did your father encourage you to follow in his footsteps?
A:
When I was 19, I went to work for him but he wouldn’t pay me. He thought a bed and meals should be enough, so I set out on my own.
Q: You tried to become a national builder in the 1970s, but now you seem to stay close to home.
A:
I ended up over extending myself and spending way too much time on airplanes. We’re only building in Southern California now. My farthest job is in Ontario, which is about an hour’s drive in moderate traffic. Bella Terra (the mall in Huntington Beach) was about an hour and a half in moderate traffic. That’s not too hard because I can work in the car and talk on my car phone.
Q: What is your impression of Mayor Antonio Villaraigosa?
A:
He has made all the right moves. The best thing he’s done so far is appoint Bud Ovrom as his housing deputy. The CRA, which for years was not a well-run agency, was really turned around by Bud. This mayor has shown he is pro-housing. He’s also been a hands-on mayor and I like that.
Q: Were you a Villaraigosa supporter?
A:
Well, I am now.
Q: You don’t have a computer or an e-mail address.
A:
I can work my TiVo at home but I am pretty technologically impaired. But if you think about it, a job will never get done over e-mail. You might send ideas back and forth, but the job will always get done over the phone and in person.
Q: Any thoughts of retiring?
A:
I’m going to work until they put me in a box and bury me. Why would I stop? I’m at the top of my game. I’m having too much fun to quit. Every year I take a week off and go to Hawaii. I get so bored I can’t wait to get back to the office.
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Jerry Snyder
Title:
Senior Partner
Organization:
J.H. Snyder Co.
Born:
1930, Brooklyn, N.Y.
Education:
Six months at UCLA before dropping out
Career Turning Point:
‘When I got an F in pre-med classes’
Most Admired Person:
Former City Council President John Ferraro
Hobbies:
Golf, working out
Personal:
Married, three children and three grandchildren
