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1675-6 Ritz-Carlton D mh ALL IN LA FAMILIA 03/15/2004 THE MIAMI HERALD Copyright (c) 2004, The Miami Herald DATE: Monday, March 15, 2004 EDITION: Final SECTION: Business Monday PAGE: 4G LENGTH: 143 lines ILLUSTRATION: color photo: The Lowenstein clan (a) ; photo: The Ritz-Carlton South Beach (2-a) SOURCE/CREDIT LINE: BY WENDY DOSCHER-SMITH, Special to The Herald MEMO: SUNSHINE INDUSTRIES / REAL ESTATE ALL IN LA FAMILIA DECADE BY DECADE, THE LOWENSTEINS DEVELOP THEIR CLOSE-KNIT EMPIRE. In every family, members assume distinct roles: peacekeeper, socializer, idealist, the rock, the creative type. But what happens when those family members run a business that, over several decades, blossoms into an empire? If that family is the Lowensteins, they quietly develop, own, lease and manage some $350 million in assets in the hospital- ity, gaming and real estate industries in South Florida and the Caribbean under the umbrella of the Lionstone Group. The Miami-based com- pany is the principal owner of the Ritz-Carlton South Beach. It invested the majority of the $200 million in the five-year project that overhauled the historic DiLido Hotel, which the family purchased in 1971, and converted it into the new Ritz. Lionstone is also planning to invest more than $300 million in new projects in South Florida, including the transformation of the Dupont Plaza Hotel site, at the mouth of the Miami River, and residential properties in North Miami Beach and Fort Lauderdale. Owning property is not unique, and neither is running a family business, but the Lowenstein family distinguishes itself by capitalizing on each mem- ber's talents and using them to the company's advantage. And they say they respect each other and have fun while doing it. "There are a lot of opinions, " says Diego Lowen- stein, chief operating officer and son of patriarch Alfredo Lowenstein, who is the chief executive. "But you get a sixth sense. You don't have to discuss an issue to death. " Several family members recently sat down to discuss their business interests in the Ritz Club Lounge, which is on the 10th floor of the beachfront Ritz-Carlton. The hotel, which opened in late December, is jointly owned by Lionstone and Flag Luxury Properties of New York. While family members sipped from ceramic espresso cups inscribed with such words as "peace" (chosen by Flavia Lowenstein-Elortegui, Alfredo's daughter and the one in charge of some of the interior-design details at the Ritz as well as buying for the hotel boutiques) , their interaction seemed easy and respectful. Other family members involved in the company are: Martin Elortegui, Alfredo's son-in-law, who handles daily operations and is vice president of special projects; Diana Lowenstein, the matriarch and proprietor of Diana Lowenstein Fine Arts gallery, who contributes art displayed at the Ritz; and daughter Carla, who has worked on the Lionstone Group's corporate identity. Also playing roles in the company are daughter Paula Lowenstein-Boano, who is helping to guide the branding and image of future real estate developments, and her husband, Gabriel Boano, an architect who works with the Lionstone Group as well as on his own real estate development projects in South Florida. ARGENTINA IN THE '30S The family business began in Argentina in the late 1930s. In the mid-'60s, the family began to diversify its holdings with investments in South Florida real estate, including hotels, apartment buildings, commercial/retail and office properties. The Lowensteins also had a home in Bay Harbor Islands, and Alfredo had a mentor and close friend, Shepard Broad, of the Broad and Cassel law firm, who died in 2001. The initial focus of the Argentine business was the export of beef and horse meat, but Alfredo Lowenstein branched out into food- service and communications in addition to building upon the family's real estate holdings in Argentina and South Florida. Generally, the Lowen- steins don't sit on their assets too long, preferring to buy and sell, as they did with two Miami Beach hotels, the Whitehouse, bought in 1966 and sold in 1973, and the Copacabana, bought in 1967 and sold in 1970. They've taken the same route with several commercial buildings. Their latest endeavor is a mixed-use project that Lionstone is co-developing with Ugo Colombo, a devel- oper with a number of successful projects in South Florida. The proposed $350 million, 3 million-square-foot project would rise on the site occupied by the Dupont Plaza, which would be razed to make way for two towers that would house a hotel/ condo and office retail space. The project, still in the permitting stage, would also include a marina. HELLO, COLOMBO After the Lowensteins bought the Dupont Plaza in August 2001, Colombo approached them about working on its redevelop- ment. Alfredo and Diego impressed him so much, Colombo said, that they sealed their deal over a single lunch meeting. Colombo, who has worked closely with family busi- nesses before, including with the Sopher family on the Aventura-based Porto Vita condominiums, says the Lowensteins not only are "nice people" but also have "a strong family organiza- tion" in which "everyone feels at peace. " "There was a good feeling among us at lunch, " Colombo says. "We cut a deal without ever meeting before. We laid the foundation, and we have not changed any of the basic concepts. Within an hour of meeting, we said, 'Let's do this, ' and we shook hands. And from then on out, we became partners. " Michael Comras, president of Miami Beach-based The Comras Co., who handles the Lowenstein retail leases at the Ritz-Carlton and other properties, describes the family as "very low-key, soft-spoken and very smart. " "They have a vision they have executed, " he said. Outside South Florida, the Lowenstein properties include four hotels, two of which contain casinos, including the Breezes Curacao, operated by SuperClubs, and the Hilton Curacao. TIMELY DIVESTING In 1998, the family made a strategic decision to divest itself of its Argentine assets, which included several operating ventures and diverse real estate holdings. A few years prior to that, Diego Lowenstein says, the family began to have an "uneasy feeling" about doing business in Argentina. Among the businesses they sold were Lamar S.A., their meat-export operation, and fast-food holdings. They ended up selling their Wendy's restaurants to Wendy's International. The Lowensteins felt that the Caribbean offered a stable environment for the hotel and gaming industries, so they started buying property there in the late 1990s, beginning with the acquisition of the Curacao Casino Resort in '97. Last year, it was renamed the Hilton Curacao. NOBODY'S PERFECT Along the path to their real estate and hotel empire, however, the family admits to a few miscalculations. For example, Diego tells how, in the mid-1980s and into the 1990s, Lionstone was an owner of Siscotel, an Argentine Internet-service provider similar to AOL that used dedicated lines to provide access to data and news wires. The family, however, felt uncomfortable with the investment because they were used to bricks-and-mortar businesses and sold in 1991. "Sometimes you can be too early, " Diego says. Then there's the case of Pumper, the frozen yogurt that Alfredo introduced in Argentina in the early '80s to an unimpressed consumer audience. "It flopped, " Diego recalls, laughing. "It happens. " Still, the Lowensteins are undaunted. They say they plan to keep the business under the tight reins of the family. "We're a growing business, " Elortegui says. "When in the business of developing, you can have a lean organization and do it right. " CAPTION: CHUCK FADELY/HERALD STAFF SITTING PRETTY: The Lowenstein clan includes Diana and Alfredo, right, and, standing, from left, son Diego and sons-in-law Gabriel Boano and Martin Elortegui and, sitting, from left, daughter-in-law Gisela Lowenstein and daughters Paul Lowenstein-Boano, Carla Lowenstein and Flavia Lowenstein-Eloretegui. PHOTOS BY CHUCK FADELY/HERALD STAFF PUTTIN' IT ON THE RITZ: The Lowenstein family invested most of the $200 million needed to convert the historic DiLido Hotel into the new Ritz-Carlton South Beach, above. SOME JOINT: The Ritz, new in December, is jointly owned by Lionstone and New York's Flag Luxury Properties. :4