Early life and education

Zell was born on September 28, 1941, in Chicago.^[1] His parents, Ruchla, later Rochelle, and Berek, later Bernard, Zielonka, were Jews who immigrated from Poland four months before his birth to escape the Invasion of Poland by the Nazis.^[2][3] In Poland, his father was a grain trader.^[2][4] They immigrated to the United States with their young daughter, Leah, via Russia and Tokyo, pretending to be tourists at the Bolshoi Ballet so as not to stand out.^[5][6][2][7] They then moved from Seattle to Albany Park, Chicago, where his father became a wholesale jeweler who also made successful investments in real estate and the stock market.^[3][2] In eighth grade, Zell took pictures at his prom and sold them. He later bought Playboy magazines in downtown Chicago and resold them to his classmates in Hebrew school for a 200% markup.^[3] When he was twelve, the family moved to Highland Park, Illinois, where he graduated from Highland Park High School.^[2] In 1963, Zell graduated with a bachelor's degree from the University of Michigan, where he was also a member of the Alpha Epsilon Pi fraternity.^[2]

While in school, Zell managed a 15-unit apartment building in return for free room and board.^[2] By the time of his graduation, he was managing several properties and was netting $150,000.^[8] Joined by his fraternity brother Robert H. Lurie, he won a contract with a large apartment development owner in Ann Arbor. In 1966, he graduated with a J.D. from the University of Michigan Law School.^[9] By that time, he and Lurie were managing over 4,000 apartments and owned 100–200 units outright. After school, he sold his interest in the management company to Lurie and moved to Chicago.^[2]

Real estate investments

After graduation, Zell worked as a lawyer for one week before deciding that the legal profession was not for him. With funding from one of the senior partners, Zell purchased a 99-unit apartment building in Toledo.^[2] In 1967, he purchased a profitable apartment complex in Reno, Nevada, later spending a lot of time in Reno, calling it a "hidden gem" from a real estate investment perspective. In 1969, he was introduced to Jay Pritzker, who provided him with funding.^[10] He acquired Arlington Towers, then the tallest building in Reno, for $9 million.^[6][11] To convince the owners to sell, Zell's brother-in-law conceived offshore transactions, the legality of which was described as "murky", to shield the sellers from tax liability; Zell reached a deal with the Internal Revenue Service to avoid prosecution in exchange for his testimony while Zell's brother-in-law served 2 years of jail time.^[6]

In 1968, Zell founded the predecessor of Equity Residential and was joined a year later by his former partner, Robert H. Lurie. Lurie died of cancer in 1990 at age 48.^[12] During the 1973–1975 recession, Zell was able to acquire many bankrupt properties for almost nothing as lenders did not want to foreclose and Zell provided financial plans that would enable the lenders to be repaid.^[10] During the early 1990s recession, Zell had personally guaranteed $600 million in loans and was working 80 hour weeks to resolve them. He then pursued taking in more investors to spread the risk. In August 1993, after acquiring a large portfolio from Barry Sternlicht in exchange for a 20% stake in the company, the company became a public company via an initial public offering.^[13][14] At that time, the company owned 22,000 apartments.^[15]

In 1976, Zell founded the predecessor to EQ Office to invest in office buildings.^[16] In 1988, he co-founded the first of four Zell/Merrill Lynch Real Estate Opportunity Partners Funds; these were consolidated into EQ Office in 1997. In 2006, The Blackstone Group acquired the company for $36 billion in the largest leveraged buyout in history at the time, then selling off the portfolio in pieces; both Zell and Blackstone had impeccable timing, selling just before the 2007–2008 financial crisis.^[17]

In 1984, Zell founded Equity Lifestyle Properties. It owns more than 400 trailer parks or mobile home parks.^[18]

Distressed investments

In 1985, Zell acquired Itel Corporation, a diversified transportation and logistics company, shortly after it emerged from bankruptcy.^[19] In 1986, he acquired Anixter, remaining in charge until it was sold in 2020. In 2004, he acquired Covanta via a 363 bankruptcy sale process.

Tribune

In December 2007, in a leveraged buyout, Zell acquired control of Tribune Media, owner of the Chicago Tribune, The Baltimore Sun, Newsday, The Hartford Courant, and other newspapers as well as Chicago Cubs and Wrigley Field. For the $8.2 billion acquisition, Zell only invested $315 million of his own money, all in the form of debt.^[26]

In a decision sharply criticized by the employees, Zell immediately put Randy Michaels, a former radio executive and disc jockey with no newspaper experience, in charge. Michaels allegedly created a hostile workplace and culture promoting sexual harassment and debasement, with executives openly discussing the "sexual suitability" of employees in the office. He also oversaw 4,200 layoffs while giving large bonuses to the executives and hosting lavish beer-and-poker parties in the office of former publisher Robert R. McCormick, long considered a shrine. Michaels resigned in October 2010.^[27]

In December 2008, less than a year after Zell acquired the company, due to the increased debt and the effects of the Great Recession, the company filed the largest bankruptcy in the history of the American media industry, listing $7.6 billion in assets against a debt of $13 billion.^[28]

In January 2009, as part of the bankruptcy reorganization, Zell sold the Chicago Cubs, Wrigley Field, and the 25% interest in Comcast SportsNet Chicago to Joe Ricketts and family for $900 million.^[29] Zell relinquished control of Tribune upon its emergence from bankruptcy in December 2012.

In 2019, Zell and other former Tribune executives paid $200 million to settle allegations of fraud for alleged "unlawful" dividends and fraudulent transfers as part of the acquisition of Tribune, from which executives received $107 million.^[30][1]

Education

In 1983, Zell endowed the Wharton School of the University of Pennsylvania's Zell/Lurie Real Estate Center.^[31] In 1999, Zell endowed the Zell Lurie Institute for Entrepreneurial Studies at the University of Michigan.^[32][33] He also endowed the Helen Zell Writers’ Program and the Master of Fine Arts Creative Writing Program at the University of Michigan.^[34] He funded the establishment of the Zell Center for Risk Research^[35] and the Zell Scholar Program at Northwestern University's Kellogg School of Management.^[36]

Arts

In 2012, Zell donated $10 million to the Museum of Contemporary Art, Chicago.^[37] In 2014, he donated $17 million to the Chicago Symphony Orchestra.^[38]

Poverty

In 2014, Zell donated $10 million to Start Early (formerly The Ounce of Prevention Fund), which promotes early childhood development in underserved communities in Illinois.^[39]

Jewish causes

Zell donated 3.1 million dollars to the Herzliya Interdisciplinary Center in Israel.^[5] Zell also donated to Israel Center for Social and Economic Progress, a free market oriented Israeli think tank founded by Daniel Doron, the American Jewish Committee and the Bernard Zell Anshe Emet Day School, a Chicago Jewish primary school named after his father.^[40] In 2015, Zell donated over $10 million to Chicagoland Jewish High School, which renamed the school to Rochelle Zell Jewish High School, after Zell's mother.^[41][42]

Political involvement

Zell donated $100,000 to Restore Our Future, the Super PAC supporting the Mitt Romney 2012 presidential campaign.^[48] In 2015 he donated $50,000 to the John Bolton Super-PAC.^[49] In 2019, he and his wife each donated $75,000 to the campaign of Mayor of Chicago Lori Lightfoot.^[50] He has also made smaller contributions to members of both the Democratic Party and Republican Party.^[51]

Use of foul language

Zell often used language considered "salty",^[52] "obscentity-laced",^[53] and vulgar.^[54][55]