Soave Corporate News
The Man with the Midas Touch
Tony Soave has built a $1.6-billion empire through hard work, a knack for benefiting from unforeseen trends, and plying for troubled companies in need of a turnaround. But even after 46 years in business, he's still learning.
By R.J. King • Photos by Roy Ritchie
Tony Soave is a man who fears a slowdown. Not in the business world, where he has built a $1.6-billion empire by hauling waste, recycling scrap, operating car dealerships, and building luxury residences along the Florida coastline and other fashionable urban districts. But in his private life.
In his first extensive profile, Soave, 67, an east-side Detroit entrepreneur who could easily retire and live the good life in one of the multimillion-dollar condominiums he’s constructing in Naples, Fla., admits he can’t afford a more casual lifestyle. “I don’t see any kind of retirement in my life,” he says. “It would be hard to fill my days — and what would I do? Some guys get successful and you never see them. I know one guy who plays 200 rounds of golf a year. That may be good for him, but it doesn’t work for me. I can’t stand idle time.”
Soave also admits that retirement would take him away from the real excitement in his life — buying and turning around troubled companies, which he has done for more than 45 years. Along the way, he’s also built up a passion for real estate. There are hundreds of condominiums on the drawing board in Naples, as well as an upcoming Tom Weiskopf designed golf course with resort-like amenities. And near the Washington Dulles International Airport in Brambleton, Va., Soave and several partners have built more than 3,000 homes since 2002. Another 5,000 homes are planned, along with up to three lion square feet of office space, shopping centers, and hotels. “The secret to success is finding the right manager to run a company,” he says. “It doesn’t matter what business you’re in. You find the right guy to run it, and it’ll work.”
That approach has served Soave well in the United States. While he has built his empire the old-fashioned way — taking out bank loans and steadily investing the funds in successful turnaround or expansion plans — Soave admits the international arena has been a challenge. Several years ago, he invested in a large scrap operation in Venezuela, but he found the government was unable, or perhaps unwilling, to grant him access to an old refinery. “I needed access to the refinery where the metal was, but I couldn’t get to it because the government blocked me,” he recalls. “Now that Hector Chavez is running the country, it’s not a good place to do business.” Indeed, in recent years, Chavez, fueled by large oil profits, has been nationalizing one industry after another in a bid to create a new form of socialism, reminiscent of Fidel Castro’s communist grip on Cuba.
In the Dominican Republic, Soave started picking up garbage in urban neighborhoods a few years back, but most residents were unwilling to pay for the service. “The people there didn’t like to pay for the garbage pickup, and while the municipality should’ve stepped in and enforced the laws, they didn’t,” he says. “As a consequence, the people had no motive to pay. You’re not going to do well in that kind of environment, whether you’re Donald Trump or Jack Welsh. I mean, there’s no way.”
At the top of his game, Soave admits he’s made a few other mistakes since those early days in 1961 when he bought a used GMC dump truck and started hauling waste, demolishing old buildings, and taking on any kind of construction job he could find. But he says the pluses have long since outweighed the minuses. “I remember we got a job in 1962 or 1963 building a boardwalk in St. Clair Shores,” he says. “There wasn’t a time where I thought we would hire some workers and manage them. I was right there in the thick of it. I remember installing the lag bolts for the boardwalk, and I was happy to be working.”
Ever since Soave entered the business world as a young boy stocking shelves and cutting meat at his father’s grocery store in Eastern Market, he’s known nothing but hard work. His zest for buying troubled companies and turning them around has been a hallmark of his career. In recent years, he has parlayed the small fortune he earned from operating landfills and scrap yards into real-estate development, a transportation network, beverage distributorships, environmental research, and a 50-acre greenhouse operation in the Windsor area called Great Northern Hydroponics, which produces gourmet tomatoes.
Typical of his knack for drawing fortune from unforeseen trends, Soave got involved in the tomato business seven years ago, just as gourmet grocers like Nino Salvaggio and Westborn Market began to grow in popularity. “I could sit here and tell you I saw the gourmet market business coming a mile away, but I really had no idea it would grow like it did,” Soave says over lunch at La Zingara in Windsor, one of several Italian restaurants he patronizes. “Once Wal-Mart began selling organic vegetables, it’s been the wind beneath my sails. They raised the profile of the gourmet industry to a level never seen before.” Last year, Great Northern produced 22 million pounds of tomatoes, many of which were shipped to local grocery stores and restaurants.
Soave has benefited from other early investments in once-sleepy industries, as well. He admits he began investing heavily in the U.S. scrap-metal business more than a decade ago, long before emerging industrialized countries like India and China began their economic expansions that drove the global price of copper and steel to unprecedented levels. “Never saw that one coming either,” he admits. “But I’m sure glad it happened. We’ve used those profits to buy other companies, turn them around, and expand the employment base.” To be sure, the scrap business represents 51 percent of Soave’s holdings today. To complement the metal sector, he recently invested in large vehicle-reclamation yards in Detroit. The operation, called Parts Galore, requires a $1 entry fee to tour a selection of more than 1,000 vehicles. Need a side mirror from a 1985 Ford Taurus or a carburetor from a 1978 Buick Skylark? Chances are Parts Galore has it. “We’re opening our second Parts Galore in Detroit (at Warren and Livernois) this summer, and we plan on two more in the city,” Soave says. “In the next few years, we plan to branch out into the Midwest.”
Following World War II, Soave was just another son of Italian immigrants growing up on the east side of Detroit when he got his first taste of the business world. Like other kids in his neighborhood near Gratiot and Harper, Soave went to work in the family business on weekends. “I remember going down to my dad’s store on Saturdays, and people were waiting in line at 7 a.m.,” he recalls. “Those were very long days. We’d close the store at 6 p.m., but there was another two or three hours of cleanup. I just tried to do what my dad did. When I got a little older, I would work for my Uncle John at his contracting business. I would grease and oil the cranes, push boulders, whatever was needed.”
During the week, Soave attended school and relished competing in football and basketball at Nativity of Our Lord High School in Detroit. On the football team, he played tackle on both offense and defense. “I was a big guy in a small school, so I started in the ninth grade and played all four years,” he recalls. Upon graduation, he made the All-City team, which drew the attention of several colleges, including the University of Iowa and the University of Michigan. “I remember visiting Iowa, and there were a lot of big farm boys there. All of a sudden, I realized I’m not big anymore. I caught on real quick. High school was fun, but college was serious. I remember at Iowa there was this big picture of [former Detroit Lions defensive tackle] Alex Karras in the locker room, and he looked like 20 guys. I also was one of the few players with a full set of teeth because, in those days, there were no face-guards [on the helmets]. I just wasn’t into it. After a couple of days, I gave the coach my pads back and headed home. I went to see the football coach at the University of Detroit, and he said he had no scholarships, but he would give me room and board.”
Soave lasted two years at U-D. “I wasn’t very happy and I think I had like a C+ average,” he recalls. “I really had the itch to get into the contracting business. My father wanted me to be a doctor, but he knew I wasn’t doing well in school and that I had something else on my mind. So I bought a used truck and started to look for work. I wanted to build a bridge. That really fascinated me. I wanted to build an interchange. I wanted to be an engineer, but that required math skills that I don’t think I could ever master. I had a lot of big ideas, but I wasn’t patient.”
Working with his Uncle John was therapeutic for Soave. Undertaking various construction jobs around the region, including moving dirt to create a test track at General Motors Corp.’s Milford Proving Grounds, Soave stayed the course. “I don’t have a rags-to-riches story because my father would’ve put me in any college I wanted,” he says. “He was a good inspiration, and he had a good head on his shoulders. I remember we looked at a landfill I wanted to buy in Utica [in 1967], and he said it was a good deal. He wouldn’t loan me money for a new truck, but he did loan me $22,000 to buy a majority interest in the landfill. That was really the break I needed to get to the next level.”
Soave operated the landfill for seven years, when one of the operation’s largest customers, Sanitas Inc., experienced a financial setback. The bank then asked Soave to buy the company’s regional operations, which included a Detroit collection site and a 240-acre landfill in Sumpter Township. Soave obliged, naming the new venture City Management Corp. Over the next two decades, Soave bought dozens of related companies that serviced municipal, industrial, and institutional clients.
Never one to embrace the public markets (“You suddenly have lots of other owners to deal with”), but recognizing their growing prominence in his industry, Soave decided to sell his private waste conglomerate to Houston-based USA Waste Services Inc. in 1998 for $750 million.
“Because USA Waste was a public company, everyone knew what I was offered for City Management,” he recalls. “I became a pretty popular guy real fast. And while some of the attention wasn’t warranted, the news brought a lot of people to my doorstep who either needed help turning around their companies or just wanted to sell outright.”
Soave’s knack for turnaround work has made more than a few bankers sit up and take notice. “Tony has tremendous business instincts and has put together a fine team,” says Comerica Bank vice chairman Joseph Buttigieg, who’s worked with Soave for more than 20 years. “In my mind, he’s the same hard-working guy that I met years ago. He’s a tremendous supporter of the city. He kept his headquarters in the city. I even think his dad and my dad might have known each other, because my dad had a grocery store in east Dearborn, and [Tony’s father] was in Eastern Market. At least, I like to think they knew each other.”
After the deal with USA Waste Services was completed, Soave went on a buying spree. He bought Checker Cab in 1999 to complement a fleet of vans he had purchased three years earlier, and recently introduced Checker Sedan, a luxury-car service that serves Detroit Metropolitan Airport, hotels, corporations, and busy CEOs. The van company, Commuter Transportation, has since been upgraded with a fleet of buses.
There’s also a dozen auto dealerships he operates from four locations in Kansas and Missouri. The offerings include Lincoln-Mercury, Land Rover, Mercedes-Benz, Jaguar, and Porsche, among others. Soave also looked into buying the Minnesota Vikings a few years back when the team was up for sale. “The sports business intrigues me,” he says, “but after going through the Vikings’ financials, we decided to take a pass.” His only investment in the sports business is City Sports Center, which offers two large sheets of ice that are used by Olympic figure skaters, high-school teams, Wayne State University, and in years past, as a practice facility for the Detroit Red Wings. The enclosed ice rinks are located next to Soave’s offices near Lafayette and Mt. Elliott.
While Soave maintains a low profile, he can’t avoid the limelight altogether. Last year, Forbes magazine ranked Soave Enterprises the nation’s 251st largest private company, based on 2005 revenue of $1.5 billion. That ranking is expected to rise slightly when Forbes releases its next list later this year. In 2006, Soave says his companies collectively produced revenue of $1.6 billion. But despite all Soave’s clout, business associates say he hasn’t lost the common touch. Wayne Doran, who served as chairman of Ford Motor Land Development Corp. in Dearborn from 1970 to 2001, says Soave’s “word was as good as gold.”
He recalls meeting with Soave on occasion when a parcel of land was needed for a new dealership. “I remember we needed a particular site for a dealership, and Tony had an option on the land,” Doran recalls. “Well, we explained our position, and Tony agreed the land was better for us. So without even asking for any sort of payment, he drops his option. I can tell you that didn’t happen too often in my years at Ford Motor Land. And he’s done the same thing at the airport.”
After winning a contract to supply luxury-sedan service atthe airport last year, Doran, a board member of the Wayne County Airport Authority, says Soave promised to upgrade services almost immediately. “You know when a problemcomes up with Tony, and there aren’t too many of them, he gets it fixed right away,” Doran says. “I wish every company was that responsive. And Tony doesn’t have a bunch of layers to get through. You call his offi ce and he either picks up right away or he gets back to you quickly. That’s the way you do business, in my book.”
Asked about future prospects for growth, Soave says he intends to expand his real-estate holdings, perhaps add more dealerships, and continue to look for troubled companies in need of a turnaround. There are also new offerings to introduce in the beverage industry, where he distributes Anheuser- Busch products in Kalamazoo and Chicago with two partners. “The thing I like about business is that you keep learning,” Soave says. “You know, there are some days I look back and wish that I had stayed in college and graduated, but then I don’t know if I would’ve followed the same career path.”
Asked about what he still needs to learn, Soave recounts a story from a few years ago when he was asked to invest $5 million to redevelop a nine-hole golf course along the Chicago River in downtown Chicago. “The guy who had the option needed $5 million hard on a certain day, and I looked at my position and passed because I didn’t want to live that way,” he recalls. “I thought we should bring in some more partners. Well, I go on to do other things, and then I get invited to the groundbreaking, and today there are three residential towers on the land, which is great. So what did I learn? That in real estate, you keep negotiating.”
