Integrity, credibility emerge in difficult times
The collateral damage of the Great Recession continues to mount and will surely continue to have impact even as business returns to a “new normal” in the Grand Rapids region. Some measure of the “flat world” impact is reported this week revealing 17 percent fewer foreign-owned businesses in West Michigan, according to The Right Place Inc. It is reflected in the story updating Wyoming’s hopeful negotiation in working through the devastation of the General Motors plant shutdown. And while many small businesses have closed doors or failed to launch in the credit stranglehold of financial institutions, it was the news about Bob that was especially gut-wrenching in this community.
Furniture store owner and developer Robert Israels has spent a lifetime building his business and the neighborhoods in which they are located. He has worked just as hard to provide for non-profit organizations. Just one example is in his purchase of Roger’s Department Store when highly respected owner Hy Birkowitz’s scions announced its closing after decades of providing special service days to the elderly and the handicapped. Israels continued that tradition, even Imagineering a senior-friendly neighborhood and park area near the property. And again when he purchased the failing Klingman’s and paid homage to its founder by keeping the name on the former Roger’s store.
Israels last month was forced to begin liquidation sales at his 28th Street stores, the result of a court suit in which Macatawa Bank claimed its past-due $6 million construction loan for those 2008 renovations, after determining it would or could not extend its previous consideration of a mortgage loan. The domino of decisions resulted in Fifth Third Bank cutting its potential losses by calling its $8 million loan to Israels and announcing its oversight of inventory liquidation at both 28th Street stores and store closings. It must be noted that Macatawa Bank is still reeling from the gluttony which brought federal fraud convictions to Michael Vorce, who was especially brutal in his perpetration of loan thefts against Macatawa Bank even before the start of the Great Recession.
The path is that of business as usual but then the unusual occurred by week’s end, when Gorman’s Furniture Chairman and CEO Bernie Moray assumed a white knight position, citing his long friendship and respect for Israels. Gorman’s is based in southeast Michigan, and at one time owned a 28th Street location. At press time the negotiations and options between all parties were uncertain, but Moray was certain about one thing: Bob Israels.
Moray was specific in his quotes distributed through a press release: “Israels has built up an excellent position in the marketplace. It’s a name that commands respect among manufacturers, other retailers and customers. Decades of hard work have gone into building that legacy; the Israels family has worked their entire lives to earn it. So, I’d hate to see it lost or destroyed by falling into the wrong hands.” Moray also made this point, “If I was in the same kind of trouble that he’s in now, I know he would be there to help me.”
What matters most here is that in this local drama of a close-up clash of good and bad, the elements of Israels’ business plan are the “things” that West Michigan business owners say they most revere: the elements of doing the right thing, of taking care of community and the respect and success for the business brought by integrity. By all accounts, Israels has that — with or without his stores.