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DeBartolo returns to Pittsburgh property business

Eddie DeBartolo Jr., real estate scion and former 49ers owner, is turning his gaze back to local investments

Wednesday, August 22, 2001

By Dan Fitzpatrick and Teresa F. Lindeman, Post-Gazette Staff Writers

Eddie DeBartolo Jr., heir to a Youngstown, Ohio, real estate empire and former owner of the San Francisco 49ers, is back in town.

Riding in an SUV last month, DeBartolo took a tour of the Parkway West, checking out the new shops and restaurants in Robinson and North Fayette. His interest in those shops and restaurants can be traced to a deal reached earlier this year, giving him sole control of his family's real estate and development interests. DeBartolo now has a one-third ownership of the Pointe at North Fayette and a one-third ownership of 100 acres of prime land surrounding the new Mall at Robinson and Robinson Town Centre.

"He's been amazed at what's been done here," said Bob McGurk, who has represented DeBartolo interests along the Parkway for more than a decade and took his new boss on the recent tour.

Much has changed since DeBartolo's last Pittsburgh stint, in the 1980s.

DeBartolo now has a new company, DeBartolo Property Group, and a new home in Tampa, Fla. He has lots of prospective real estate deals, too. As part of a national push for new developments and acquisitions, DeBartolo is talking to the Zamias family about joint development of the long-delayed Frazer Heights Galleria, along Route 28.

"Eddie DeBartolo is back," said Paul Martha, an lawyer who has worked for the DeBartolo family.

"I don't know that he ever left," Martha added. "But he had problems there for a while."

DeBartolo and his father once were familiar figures in Pittsburgh. They owned the Pittsburgh Penguins, the Pittsburgh Maulers of the former United States Football League, the Pittsburgh Spirit of the Major Indoor Soccer League. Their company, Edward J. DeBartolo Corp., developed Century III Mall, took part ownership of One Oxford Centre and pursued a development of City Center, Downtown.

In the early 1990s, though, the company ran into financial problems, and DeBartolo's father, Edward, died in 1994. But DeBartolo's problems mushroomed in 1997, when he slipped a suitcase filled with $400,000 in cash to former Louisiana Gov. Edwin Edwards, in exchange for his help in winning a Louisiana casino gambling license. DeBartolo, who collected five Super Bowl trophies as owner of the San Francisco 49ers, made the payment in a delicatessen near San Francisco's airport.

In 1998, he admitted to the payoff, and pleaded guilty to failing to report the extortion attempt. After being slapped with two years' probation and $1 million in fines, DeBartolo moved to Tampa, and eventually gave up control of the 49ers in a series of court battles with his sister, Denise DeBartolo York.

Earlier this year, he and his sister divided the family's holdings.

York kept the football team and a Lear Jet, while Eddie DeBartolo kept much of the family's remaining real estate, including the land in Robinson, and the 594,000-square-foot Union Trust building, Downtown. DeBartolo also kept the family's 11.3 percent stake in Simon Property Group Inc., which became the nation's largest mall owner when the DeBartolo family and the Indianapolis-based Simon family combined real estate assets in 1996.

That Simon stake, worth more than $500 million, gave Eddie DeBartolo the wherewithal to make his comeback.

The plan now is to pour capital into the acquisition of retail, hotel and office buildings, while developing new shopping centers.

But why is he returning to development now, when the real estate market is slowing?

"I think it is sort of in his genes, for one thing," said Martha, who was general counsel for the San Francisco 49ers and ran Civic Arena and the Pittsburgh Penguins when the DeBartolo family owned the franchise in the 1980s. Also, "I think perhaps he sees an opportunity right now to take advantage of a down real estate market."

"I think Eddie feels very comfortable with Pittsburgh," Martha said. "Obviously, he knows Pittsburgh, and he certainly would be an asset if he got actively involved in [the] real estate development business in Pittsburgh."

To that end, DeBartolo has had conversations with the Zamias family about developing the long-delayed Frazer Heights Galleria as a joint venture. Martha described the talks as preliminary. George and Damian Zamias, who run Zamias Services Inc., filed for bankruptcy protection in May, but they have said the Frazer property is not part of the bankruptcy proceedings.

George Zamias, when reached this week, refused to confirm or deny the talks with DeBartolo. "We are not at liberty to discuss any ongoing negotiations with anybody," he said. "Several groups have contacted us about a joint venture for that project."

Regarding DeBartolo, Zamias said, "I hope he does come back in the business," he said. At one time, he said, "that name was everywhere."

McGurk, who has been with a DeBartolo operation about 15 years, said DeBartolo's transition to a new company earlier this year was a smooth one. He still works with the same people in Youngstown, and focuses on his Robinson and North Fayette projects.

But the figures at the top have changed. In addition to Eddie DeBartolo, former Oakland Raider Ed Muransky serves as chief executive officer of DeBartolo Property Group.

For the new DeBartolo Property Group, several projects are already under way near Tampa, Fla.. Also, DeBartolo has set up an office in Cleveland to seek opportunities. The Pittsburgh region, long familiar to the DeBartolo family, is also on that list.

But the developments done by DeBartolo Property may have a different flavor than those that turned the original family business into one of the nation's major shopping mall owners.

After all, there aren't many opportunities to build regional malls anymore.

McGurk said the company could get into more big-box retail development, mini shopping plazas, office-retail projects or even hotels. DeBartolo Property owns a Holiday Inn in Boardman, Ohio, near Youngstown.

Eddie DeBartolo has been busy on other fronts, too. His company last year opened an Italian restaurant named Tomatina in Tampa. There has been talk of taking the concept nationwide, perhaps to places such as Robinson.

In addition, Muransky and DeBartolo have founded a company called Ed & Eddie's Homemade Ice Cream. The plan is to build combo businesses pairing the ice cream parlors with Auntie Anne's pretzel shops. DeBartolo Property is already a major franchisee for Auntie Anne's.

Eddie, who was flamboyant where his father was conservative, has bristled at comparisons to his father in the past. He once told The Boston Globe: "People say, 'Well, he got everything from his father.' What am I supposed to say, that I wish my father hadn't been successful? I guess money is important, but so is enjoying it. My father and I are different that way."

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