L.A. Rainmaker
Billionaire Eli Broad wants nothing less than to remake his adopted city
"Eli has this notion that a great city must have a dynamic downtown, and that's what a city lives by," says Joel Kotkin of the New America Foundation in Washington, D.C., and author of The City: A Global History. "Yet he has been living in one of the greatest cities in the world, and it's the exact opposite. L.A. is a multipolar city, and the notion that you can create New York in the middle of it without understanding the context is a mistake. He's in denial."
Egos. Actually, it's more like he won't be denied. Disciplined and driven, Broad isn't fazed by his critics. He is accustomed to being perceived as a prickly, impatient, and controlling boss, and he's fine with it. "I'd rather be respected than loved," he says. As for big egos, he believes in them. He once told former MOCA Director Richard Koshalek that egomania should be a condition of employment for high-profile job candidates, because "there's too much at risk for them to fail."
Not that failure is something Broad knows a whole lot about. Born in the Bronx to Lithuanian immigrants, he was raised in Detroit, where his father owned two five-and-dime stores. He earned an accounting degree and at 20 became the youngest person ever to pass Michigan's CPA exam. Soon thereafter, he went to work for home builder Donald Kaufman.
Broad surveyed the real-estate business (about which he knew nothing) and decided he and Kaufman could do better. They lowered costs (and sales prices) by eliminating basements and garages in favor of slabs and carports, and by the late 1950s Kaufman & Broad Building Co. (later KB Home) had mastered the market in Detroit's burgeoning suburbs. The company went public in 1961 (the first home builder on the New York Stock Exchange) and moved to Los Angeles two years later, where its business exploded.
With Broad now in charge, KB acquired Sun Life Insurance of America. Broad shifted the company's focus from death benefits to retirement savings, and it went on to be one of the best-performing stocks on the NYSE for more than a decade. In 1999, AIG paid $18 billion for the renamed SunAmerica, and Broad, a fierce negotiator, cashed in his 19 percent stake for $3.4 billion.
Although he is the third-richest man in Los Angeles (behind Sumner Redstone and Kirk Kerkorian), Broad's persona is still more chamber of commerce than corporate celebrity. Semiretired, he still comes into the office every day, always in a suit. The Broads avoid the social limelight; they are the last people to be found at a movie première, and their home phone number was listed until just a few years ago. Broad jets around on his Gulfstream, taking coffee orders and serving lunch himself. At the Broad Foundation, which is decorated with contemporary masterpieces by the likes of Jasper Johns, he often eats at his desk and drinks inexpensive bottled water-out of the bottle. "If you described someone as the typical L.A. mogul, you'd be 180 degrees from Eli," says Barry Munitz, the former president and CEO of the J. Paul Getty Trust.
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