story by Kim Souza
ksouza@thecitywire.com
At 70, Ben Israel, is trying to build his third business success out of the ashes of personal and business bankruptcy, relying on his faith and hard life lessons learned to lead the way.
The past decade has been a wild ride for Israel, an entrepreneur at heart, and one who does not know the meaning of retirement. His drive may stem from his upbringing on a small dairy farm south of Greenwood and his internal drive to build successful ventures, the mark of a true entrepreneur.
“I don’t know how to quit. I still owe money and working feels right,” Israel said candidly.
Since 2011, Israel has worked in a real estate venture, A-Team Services, as a consultant and service broker for general contractors in residential and smaller commercial jobs. He said last year the majority of their work came from commercial roofing jobs, but he is hoping to expand on that in 2013.
“Because of the bankruptcies, traditional lenders are hesitant to loan money so we have focused on custom deals and other investor-funded projects,” he said.
While it’s a far cry from Dixie Development, a real estate conglomerate that included 66 different companies, Israel said the A-Team venture feels right for this time in his life.
“We aren’t trying to build another Dixie, but my wife Nancy and I are committed to growing this startup in whatever direction it takes,” he said. “Nancy has been my partner for nearly 44 years and we are in this together, as always.”
DIXIE RETROSPECT
Dixie Development grew out of a hobby Israel had dabbled in for years as a local optometrist.
“I bought some commercial property as investments and my brother and I set out to develop some office space which was needed in Northwest Arkansas at the time, around 1998 or so,” he said.
Within two years, Israel said his older brother did not have the appetite to continue, but he had a found a new passion. Israel built Dixie up to employ more than 150 people by 2006 doing all aspects of real estate, from excavation, architecture and dirt work, to construction, landscaping, electrical and HVAC, to finally leasing and selling of commercial and residential property.
“We essentially integrated almost every aspect of the building phase in our company. We even had a telecom business as well,” he said.
Dixie built Nelson’s Crossing multi-use space on the corner of Joyce Boulevard and College Avenue in Fayetteville and the Commerce II office park in the same area – two projects Israel remains proud of to this day.
Israel said Dixie was highly leveraged with some $300 million in debt against assets valued at $400 million when commercial property values began to tank in late 2006 and early 2007.
Filing Chapter 13 Bankruptcy, Israel had hoped to save this business, but as losses mounted the mega company was spun down to one, Mitosis LLC, which still exists today as the offices where Israel runs his A-Term venture.
OPTICAL BACKSTORY
One has to wonder how an optometrist gets from eye examinations to multimillion dollar real estate developer, but for Israel that journey made logical sense.
Around 1987, he said a change in state law allowed optometrists to advertise their services, which equalized the fees and ultimately reduced profitability for private practices like his own.
“I had run a successful eye care business for 35 years and was the team eye doctor for the Razorbacks, but I wanted to seek some commercial outlets for my business so I went to see Sears about letting us set up eye clinics in their stores where they could also sell eye glasses," Israel said.
Sears gave him all the stores in Arkansas, one in Alabama, one in Joplin and two in Mississippi to get started. He could advertise and consumers could use their Sears credit cards to pay for the services, and he said the business took off quickly.
Within a year, Israel said he called on Sam Walton in Bentonville with a similar plan. At the time Wal-Mart was about to close a deal with a lease-tenant in Texas.
“Mr. Sam promised me the next deal. And he delivered. We set up clinics in Topeka, Kansas, as well as Sugarland and Arlington, Texas. The results were good, which prompted Mr. Sam to want more. We set up services in 10 more Wal-Mart’s but the biggest thing he did for us was give us the Sam’s Club business,” Israel said.
He said Mr. Sam was a great tester of store ideas as he worked to find the right balance between cost and return on investment.
“In one Sam’s Club he wanted to try a lab, in the next one he wouldn’t. Then we tried comparing the cost and performance with an ophthalmologist (doctor) and one without. In Sugarland, Texas, we built a huge lab with one-hour service for lenses. We worked tireless to get the model just right. We ended up with a kiosk model, saving doctor costs and this made Mr. Sam very happy,” Israel said.
The next year he said Mr. Sam asked him to oversee operations in 90 stores as the business model had taken wings.
After Walton’s death, Israel said he opted to sell his business venture to a suitor as the culture within Wal-Mart began to change.
“Mr. Sam was really a great partner, he took an interest in our venture, which wasn’t passed on to the 25-year-old accountants I dealt with after his death.” Israel said. "By 1994, we opted to sell out.”
He said the Wal-Mart optical lab in Fayetteville was turning out 1,500 pairs of glasses a day, with 150 people working in three shifts. Similar labs also operated in Houston, Dallas and Little Rock, when he sold the business.
He kept the Sears business until 1998 and then sold it as well to jump feet first into real estate, something he had been investing in for several years on the side.
LESSONS LEARNED
Looking back, Israel said important lessons he learned were the personal insights about his own shortcomings.
“I am a big picture guy, I push and push to grow and make things bigger, but in so doing, I often neglect detail. I did it with First Family Vision Center and repeated the mistake with Dixie Development. You would think I would learn my lesson,” Israel said.
Serial entrepreneur Jeff Amerine of Fayetteville has worked with numerous startup ventures of his own through the years and says most entrepreneurs possess a self-assuredness and higher appetite for risk that can make others uncomfortable. Amerine is the associate vice-provost for research at the University of Arkansas and a local angel investor and startup consultant.
He said being an entrepreneur is a life-long affliction, in that there is a constant battle to turn the crank and build something new or bigger.
Israel, who admits he was consumed with growth, recalls one big issue that his companies faced was the loss of their corporate culture.
“When you acquire other small companies to facilitate growth like we did with our Wal-Mart model, we lost our unique culture. For instance we set up shop in Miami hiring local people there to run our operations and we didn’t adequately train them in our culture, because we were on to the next job. One day you look up and the corporate culture you love is gone, your company has become something else,” he said.
In the past five years Israel said he’s seen plenty of life-lessons as his mother and brother both died, he became estranged from his only son, filed business and personal bankruptcy and fended off 130 lawsuits.
“My only regret is that I wasn’t a better example for my family and staff through the years. The physical properties one-by-one where returned to lenders, peeled back like skin on an onion. Automobiles, jewelry and other personal effects were also collateral and handed over to lenders as the company unwound,” he said.
The bankruptcy was a humbling experience, he said it took 4.5 years to unwind the DIxie companies and then he ultimately ended up filing personal bankruptcy in the process.
“You just never think you will see yourself there,” he said.
Israel believes he has learned more from his failures than his successes and said he accepts responsibility for the business decisions he made. A couple of years ago Israel was thrown from his horse into a steel beam. His pelvis was fractured and he spent three months in a physical rehab to regain his ability to walk.
“Lots of time to think," he said, “I had gotten so far away from the way the teachings I was raised on and who I was raised to be, but God sat me down and got my attention. ... Today I am just happy to brush hog the acreage around our home, play a little golf and continue working on this next venture with Nancy by my side.”