Hotel Online 
News for the Hospitality Executive



 
Jim Justice, The Greenbrier's New Owner,  Hardheaded Enough to
 Believe He Can Turn the 635-room Resort Around

By Rex Bowman, The Roanoke Times, Va.McClatchy-Tribune Regional News

August 25, 2009 - WHITE SULPHUR SPRINGS, W.Va. -- Hard-charging, sleep-deprived coal baron Jim Justice claims to have never taken a vacation, has four phone lines running into his home to handle business -- he runs 47 companies -- and indeed seems too busy to exhale. But he says he has both the time and energy to save The Greenbrier resort.

Justice, 58, is the multimillionaire West Virginia mountaineer -- many here know him as the burly giant who plays Santa Claus at local churches -- who swooped in as Marriott International was preparing to buy the bankrupt hotel. Justice, owner of the Justice Family Group LLC, snatched it up on May 6 for what's considered a bargain-basement price of $20 million, leaving Marriott executives to wonder what went wrong.

Within days of Justice's purchase, the stately 635-room resort, with its 6,500 acres, three golf courses, tennis courts, riding stables, spa, movie theater and upscale shops -- not for nothing is it known as the "playground of the rich" -- was out of bankruptcy. The following month, The Greenbrier announced it was going to build an elegant, 50,000-square-foot "Monte Carlo-style" underground casino at a cost of $25 million. The groundbreaking was Monday.

And earlier this month, Justice announced The Greenbrier would host an annual PGA golf tournament with a $6 million purse, an event expected to put more than 20,000 spectators in the gallery of the resort's Old White Course each year.

"I'm hardheaded enough to believe I can turn this around," said Justice, sitting in his makeshift office where workers have set up his brand-new deluxe treadmill. "And if I accomplish that, then this deal, at the sale price I bought it at, becomes the deal of the century."

More plans are buzzing around in Justice's head: He said he envisions a teen center at the resort with live bands, regular live theater and a new stage where internationally known acts such as Barry Manilow and Barbra Streisand can perform for Greenbrier guests. And while the casino is under construction, he plans to set up a temporary gambling establishment with 10 gaming tables and 40 slot machines.

Residents and merchants here in the little city of White Sulphur Springs (pop. 2,300) say they are nothing short of astonished at the dizzying turnaround of the resort's fortunes. And they credit the "local boy" Justice as the one who has single-handedly given the community a chance to shake off its economic lethargy.

"We've got pretty good momentum going now," said John Gillespie, owner of Gillespie's Flowers on Main Street.

"There's definitely been an uptick of business," said Katie Ickes, executive director of the Greater Greenbrier Chamber of Commerce. "There are more people coming into shops, more people spending. It was a pretty oppressive time for a while. But now there's a different feel in the area."

Times indeed have been hard of late in White Sulphur Springs and surrounding Greenbrier County. Tourism, mostly because of the resort, has traditionally brought in $233 million annually to the scenic area, but The Greenbrier has lost $90 million over the past five years.

Layoffs at the resort slashed its work force from a seasonal high of 1,600 employees to 750. And problems reaching contracts with the resort's nine unions, which represent two-thirds of its workers, took a disastrous turn when the unions voted to authorize a strike early last year.

The resulting uncertainty, along with the recession, led to cancellations and a drop in the number of groups booking rooms at The Greenbrier. The resort lost $38 million last year. In March, the Greenbrier Hotel Corp., a subsidiary of CSX Corp., filed for bankruptcy protection.

On May 7, the mood was so bleak that when resort executives called a staff meeting, many workers took their seats bracing for more layoffs. Instead, when Justice was introduced as the new owner, tearful workers burst into applause and gave him a standing ovation.

"It's absolutely fabulous that he stepped in," said Bill Raney, president of the West Virginia Coal Association and a friend of Justice's. "He's one of those guys that everybody loves, and he's always so positive."

Justice, a grizzly bear sized man, had become the resort's savior. The day before, he was known to many employees of the resort simply as "coach" because, for more than a decade, he has coached the Greenbrier East High School Lady Spartans basketball team. Some of the resort employees' children had even played for him.

"He's not your run of the mill, ordinary coach," said school Principal Jeff Bryant, noting that Justice sometimes calls timeouts to make his lollygagging players run laps. "He's highly intelligent and a motivator. And he has the ability to look at something and know how to fix it."

Justice, born and raised in West Virginia, is chauvinistic about the state and bone-deep proud of his roots. His father, founder of the Bluestone Coal Corp., was raised in the Kopperston coal camp, and his mother grew up on nearby Huff Mountain. He remembers his father as an extremely hard worker, and he quotes him the way other business titans quote Adam Smith ("My dad said, 'If you can't get it done in 24 hours, you're going to have to work nights,' ") and recalls his mother washing and reusing scraps of aluminum foil.

Justice went to the University of Tennessee on a golf scholarship, but then transferred to Marshall University back in his native state. Today he oversees a company, the Justice Family Group, that includes coal mines, grain farms (Justice has 20,000 acres of corn in South Carolina and occasionally goes down to ride a combine), turf grass, cotton gins, timber, John Deere dealerships, Christmas tree farms and land companies.

Now, suddenly, he's in the hotel business, and he thinks he can do it as well as many others: "There's a lot of people running hotels who are losing tens of millions of dollars every year."

As The Greenbrier's troubles mounted early this year, Justice said he grew alarmed over the fate of its workers, but didn't see any way to help. He was busy buying the A&G Coal Corp. of Wise County, and also busy selling his West Virginia coal operations to Russian firm Mechel OAO for $436 million.

When Marriott showed up as a suitor, Justice grew further distressed.

"The treasure was being diminished," he said. "I truly believe if some hotel chain had bought this, it would be like sandblasting Mount Rushmore. The treasure would have been lost."

So Justice, whose purchase of A&G went faster than expected, put in a call to a CSX official to see if the company would work a deal with him.

"April 29 was the first time I spoke with CSX," he said. "On May 6, I had their stock certificates in a briefcase and I was walking down the road."

After taking ownership of the resort, Justice moved quickly to renegotiate the union contracts, restoring some of the concessions. He called back laid-off workers, and 1,400 are now employed. Then he announced plans for the casino, where the dealers will wear tuxedos (Greenbrier voters approved casino gambling last fall after the resort's union asked to have it put on the ballot). The casino, which Justice hopes to open by April 1, 2010, will be available to guests, resort members, guests of members and, when 400 or more rooms are occupied, to conference attendees staying at nearby hotels.

"It's going to be elegant," said Lynn Swann, spokeswoman for The Greenbrier.

But perhaps Justice's biggest achievement -- outside of pulling the rug out from under Marriott -- was in landing a coveted PGA tournament event over the next six years. When Justice first called an old buddy inside the PGA about the idea, he said, he was told it was impossible.

"My dad said, if something is really hard, it'll take two days," he said. "If it's impossible, it'll take another day."

So Justice kept insisting, convinced, he said, that in the current economy, one of the PGA's current tournament sponsors would back out. His instincts were correct.

From July 29 to Aug. 1, 2010, the Greenbrier Classic will be held at the resort, replacing the Buick Open on the FedEx Cup schedule. So many requests for tickets have come in, the resort had to set up a separate phone line, Swann said.

Meanwhile, crews are preparing to build a new restaurant in the resort, a steakhouse named for West Virginia native and NBA star Jerry West, also friend of Justice's.

Justice said that, after hitting the ground running, he has to ease up a little to get his legs under him once more. And The Greenbrier is still losing money, an average of $1 million a month this year though considerably less in the past two months.

But Justice said he has the money to turn The Greenbrier around, to help it regain the Mobil Five Star Rating it lost in 2000.

"Business has gone up substantially, and it's going up every day," he said. "Every day we're surprised. The word is surely moving, and the people and the guests are responding."

-----

To see more of The Roanoke Times, or to subscribe to the newspaper, go to http://www.roanoke.com.

Copyright (c) 2009, The Roanoke Times, Va.

Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. CSX,




To search Hotel Online data base of News and Trends Go to Hotel.OnlineSearch
Home | Welcome| Hospitality News | Classifieds| One-on-One |
Viewpoint Forum | Industry Resources | Press Releases
Please contact Hotel.Onlinewith your comments and suggestions.