How did The Schwartz Family build a successful multi-generational family business in real estate, hospitality, and sports? By continually investing with transparency, passion, innovation, and impact.
In 1967, Kevie and Alan Schwartz, the father-son duo, established Tennis Corporation of America. Five decades, four generations, and eight additional locations later, Midtown Athletic Club is a leading network of tennis, health, and wellness clubs that are resort-like in quality and combine hospitality, community, and individual attention.
How did The Schwartz Family build a successful multi-generational family business in real estate, hospitality, and sports? By continually investing with transparency, passion, innovation, and impact. When it comes to investing their time and their assets, this philosophy has delivered untold benefits to the family, their business, and the communities in which they are located.
Several years ago, after he had passed the torch as CEO to his son Steven, Alan Schwartz set up a day-long meeting with his wife, their four children, each of their spouses, portfolio advisors, and attorneys. The meeting began with Alan reading his own will out loud. Then he asked, “Are there any objections?”
Actually, this was the second time he held a meeting like this. At the first meeting, since they were asked, two of his children spoke up. They indicated an interest in sharing some of the responsibility with one of their siblings who had already been named executor and trustee. They all discussed, and all agreed that this was logical based on their knowledge, experience, and interest for sharing that role. Another voiced gratitude for being asked and chose a less active role, yet still wanted to remain educated, informed, and engaged.
So, the will was amended, read out loud again at the second meeting. Everyone agreed that they were all being treated equally, that they trusted each other, and that they would always have an opportunity to be heard. They knew going forward that there was a commitment to keep all informed and educated on a regular basis about the family assets before a death occurred, which is most typically the time for friction that, sadly, can often last lifetimes.
More than an inheritance, the true gift that this patriarch gave his children was openness and transparency that created family trust.
When Alan was growing up, his father Kevie established Sunday as “Family Day,” when everyone learned to play tennis together. Alan and his siblings took naturally to the game. Alan went on to become a nationally ranked player and captain of the Yale Tennis Team, and one sister is an Illinois State Mixed Tennis Champion with Alan. Another sister is a West Virginia State Women’s Champion and her son became captain of the Harvard Tennis Team while one of Alan’s grandsons captained the Wesleyan Tennis Team.
Meanwhile, Kevie and Alan were father-and-son business partners in real estate and Alan was involved in national and international governance in the sport of tennis. Fueled by their shared passion for tennis and the family business, they decided to combine the two by establishing the original Midtown Tennis Club in 1967, then the world’s largest indoor tennis facility. The emphasis was on providing a world-class indoor tennis facility while, at the same time, creating new and different group lesson programs for beginners and those who had not played for years.
Today, the third generation of the Schwartz family is managing the family business. Alan’s son Steven joined the business after following the Schwartz Family Business Rules:
- Spend at least six years working outside of the business, where you can experience the real world beyond the family business.
- Accept the reality that pay in the family business will not be equal for all, but rather equitable for the role played and results produced.
- Maintain a commitment to a strong, outside Board of Directors whose collective wisdom and experience will be highly valued.
Steven Schwartz graduated from Cornell with a degree in Hotel Administration, then joined the Hyatt Hotel Corporation, working his way to National Director of Development. At age 28, Steven joined the family business and brought along his philosophy that hospitality is key, and that a positive relationship between staff and members is critical. It was his vision that brought about Midtown Chicago’s recent transformation. He wanted the clubs to feel like a second home, and re-engineered the club to include hotel, dining, fitness, swim, and tennis. The resort was named Midtown Athletic Club.
Alan’s transition to Steven’s leadership was easy and relatively seamless. Alan explains that the secret is to not feel your whole identity is tied up in the business and to have a father who set the example a generation before.
Fourth generation Alex Schwartz, Steven’s son, has followed the Schwartz Family Business Rule #1 by spending eight years working successfully in other industries. He is currently vice president of marketing at Midtown. Steven’s philosophy as Alex joined the family business is “companies are born, they grow, they start to stagnate, and then they can either die or be reborn. The next generation gives you a resurgence of energy and ideas, and hopefully a rebirth of the growth cycle.”
Companies are born, they grow, they start to stagnate, and then they can either die or be reborn. The next generation gives you a resurgence of energy and ideas, and hopefully a rebirth of the growth cycle.--Steven Schwartz
Since the very beginning, the Schwartz family has been focused on creating a positive impact in the community beyond just the core business. “Changing peoples’ health and lifestyle for the better is a major gift back from our members to Midtown Athletic Club ownership and staff,” Alan explained.
In 1971, Midtown created a tennis learning program called Tennis in No Time.® A one-month course, no membership required, with a goal of introducing the sport especially to women was later expanded to both genders. The program exists to this day and has taught over 100,000 people to play tennis. Women now represent 50% of all tennis players, viewers, and enthusiasts.
Alan and a group of tennis friends volunteered and gave free tennis lessons for over eight years in several underserved Chicago neighborhoods. A series of free lessons was also given to a group of immigrant boat people from Vietnam who landed in the city in the 1970’s. One of these students became the captain of the DePaul University’s Tennis Team and another became a professional player.
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