James Ferrari, the founder of Benjamin James Real Estate, said he is reinvigorating the ailing company with an injection of capital and a radically altered business plan he claims would give three-quarters of the company’s profits to charity.
A former male model, Ferrari left the 16-year-old company in the hands of top executive Douglas Wagner for the past few years while he focused on other pursuits, like philanthropy, music and his media company, Ferrari Media Production.
“I couldn’t have told you two years ago who worked at my company because I was on the West Coast or South Africa,” Ferrari said.
With the financial crisis, however, the business struggled, closing two of its three offices within a year, and Wagner recently announced plans to leave, as The Real Deal first reported. Ferrari considered closing the company, he told The Real Deal, but instead has decided to step back in to manage its day-to-day operations. He said he is planning to put a significant amount of capital into the business — “whatever it takes” to get it up and running. He is also planning to reopen the company’s Soho office, which closed over a year ago, and has begun making overdue payments to creditors, (including The Real Deal).
“The future of the company is much more stable than it was six months ago,” Ferrari told The Real Deal by phone from the company’s current headquarters at 120 West 21st Street.
But there’s one major difference. This time around, Ferrari said, he is committed to transforming the company into a socially conscious venture that will give some 75 percent of its profits — after agents and bills have been paid — to charitable organizations Ferrari supports, such as the AIDS research group amfAR, the non-profit organization Color Me In!, and Housing Works.
Ferrari, who considers himself a “social entrepreneur,” said he views the revamped company as “kind of like the Robin Hood of real estate.”
To facilitate this, he will not receive a salary from the company, he said, though as the owner, he will receive a portion of the profits.
“I’ve made my money,” said Ferrari, who spent the early 1990s strutting down runways and appearing in Vogue and Cosmo. Later, he invested in ventures like the Blue Velvet Boxing Club and a Chelsea nightclub known as G.
“I got my Ferrari; I have my homes,” he said. “I’m into doing stuff that’s more global in nature.”
He attributed Benjamin James’ current cash-flow problems to the recession, but said he believes that the recent injection of cash will help turn things around, and that the new business model will give the company a competitive advantage by appealing to developers and customers.
“Things are tough, but there’s always a game within a game,” he said. “Because of the new business model, all bets are off.”
The company will not technically be a non-profit organization, he said.
Industry experts expressed skepticism that such an approach would work, especially in a tough economy.
“I don’t know how they could do that, from a business perspective,” said real estate consultant Kathy Braddock of Braddock + Purcell, who noted that she hasn’t seen a similar approach in New York City.
She also doubted whether the company’s distinctive mission would result in much of an advantage over other firms, since many large companies make large yearly donations to charity.
“I do believe a lot of big firms contribute to charity,” she said. “I don’t think that’s what drives [consumers] to necessarily buy or choose something.”