Ex-lumber king Fred Erb also leaves stamp on real estate, philanthropy

By Jennette Smith, Crain's Detroi Business

October 3, 2005

When Fred Erb made a deal to sell Erb Lumber to Carolina Holdings in 1993, it included an important caveat: He didn’t sell the real estate.

That meant Erb’s Edgemere Enterprises Inc. kept the store locations as assets and leased the stores to Raleigh, N.C.-based Carolina Holdings.

This detail is just one example of how Fred Erb became — and still is — a major force in real estate. He’s also a major force in philanthropy and has served as a business mentor to many.

Today, Birmingham-based Edgemere still holds 10 store leases in Michigan and Indiana.

In addition to that, there are lots of other sites previously owned by Erb Lumber or the Erb family that were sold to make way for major real estate projects. Notable local examples include the sites where Lofts at 855 South Main and Main North Lofts are now rising in downtown Royal Oak and the Eton Street Station development in Birmingham.

Erb’s real estate imprint also stretches to the apartment market. Amurcon Corp., founded in 1971, today owns 35 properties numbering 4,000 units. Erb is chairman of Amurcon and Edgemere.

Erb, now 82, said his initial forays into real estate were not always his idea.

“We had so many builders as clients,” he said. “Some of them were out of money. Sometimes they’d give us land.”

Erb Lumber grew from a family business Erb purchased from his uncle after he served in World War II. He said he agreed to work for the family company only if he could buy it.

“I never worked for anyone except the U.S. Army,” Erb said.

At that time, the Erb-Kidder Co. sold lumber, coal and builder’s supplies. Sales in 1947 were $170,000. When Erb sold Erb Lumber in 1993, its sales were nearly $300 million and it had 45 stores.

Erb Lumber locations were renamed Stock Building Supply after Carolina started using the new name for many of its operations in 2000.

Erb’s son John Erb, who recently resigned as a vice president for Stock Building Supply, said the sale was absolutely the right fit for the former Erb Lumber. Stock Building Supply’s annual revenue today is about $4 billion as part of Wolseley plc. Plus, they are positioned for professional builders, at a time when the top 10 builders in the country are rapidly increasing market share, John Erb said.

As the lumber business evolved, Fred Erb has steadily amassed a real estate portfolio with partners such as Gilbert “Buzz” Silverman and Richard Crawford. For a time, Erb was an investor in a separate apartment venture in Virginia called Amurcon of Virginia.

Edgemere is part owner in an office building in Ann Arbor called Forest Cove with Troy-based real estate developer John Damico. Another investment with Damico is a shopping center at 23 Mile Road and Gratiot Avenue in Chesterfield Township. It was through the shopping center investment that Erb helped Damico get his start as a developer.

“His real estate savvy was unparalleled,” Damico said. “He’s a very tough guy and a very analytical guy but fair and honest.”

With Crawford, Erb is a part owner in a Naples, Fla. investment, an eight-story office building called Fifth Third Centre.

Another remaining investment is a minority interest in an engineering firm and road contractor in Phoenix called F&F Construction.

Ira Jaffe, longtime corporate counsel and friend to Erb, called him the smartest businessperson he has ever met.

“One of his great attributes in business was that he was infinitely patient,” he said. “If you take staying power and patience in real estate, that’s one of the keys of success.”

Silverman, who serves as vice chairman of Amurcon, said Erb “is an amazing and unique person.”

“He clearly loves what he does,” said Silverman, also chairman and CEO of Silverman Cos. in Bingham Farms. Erb has a broad spectrum of interests and knowledge, he said, and is equally at home talking about highly complex financial details or people.

Another attribute of Erb and his wife, Barbara, is a world view that stands out among the business community.

“He was in the lumber business, but he didn’t take the short-term view,” Jaffe said. “He looked at what was good for the world.”

The Erbs’ gifts to the University of Michigan for the Erb Institute for Global Sustainable Enterprise, are widely known. They have donated $20 million in three separate gifts, including a $10 million gift in April. The institute addresses environmental and social responsibility issues through education, research and public outreach.

“Detroit tends to be focused on Detroit a lot, but Fred and Barbara look beyond that,” said Drew Horning, managing director of the institute. The program operates as a partnership between the School of Natural Resources and Environment and the Stephen M. Ross School of Business.

Barbara Erb said the couple wants its gifts to help leave the world a better place for the next generation.

“I want my grandchildren to be able to drink the water that comes out of the tap and swim in our Great Lakes,” she said.

The institute added a global component to its name because of big issues on the horizon with growing nations like China and India, Horning said.

Graduates of the institute’s educational program work in a wide variety of jobs, such as alternative energy or environmental management corporate positions.

“Now we’re really trying to expand into public outreach,” Horning said.

Erb said he’s met most of the “kids” in the program. Erb himself is a graduate of UM. It was there he met Barbara at a New Year’s Eve party in 1942. They married after Erb returned from his service in the Army.

Jaffe in 2001 commissioned a tribute book about Erb’s life that is full of letters from friends and families offering personal anecdotes and stories. One of the more interesting “Fred-isms” is Erb’s copious note-taking and tape-making habit to document every conversation. He even took notes during the interview for this story.

In the book, former secretary Andrea Keefer recounted her story of transcribing daily tapes from 1987 to 1991.

“I felt like I was living his life vicariously as we would go on trips through the lumber yards, sit through various meetings, parties or his thoughts as he drove home,” Keefer wrote.

Edgemere Vice President Patricia Smotherman said Erb still takes lots of notes, a habit she picked up, too. There are many things about finance, philanthropy and more that employees have picked up from Erb, she said. Smotherman has worked for him for 14 years. Besides UM, other major Erb philanthropic donations went to organizations such as Cranbrook Institute of Science and the Karmanos Cancer Institute.

“If you watch what he does, you can’t help but learn from him,” Smotherman said. “He’s been such a great teacher and he teaches by example.”

The book contains other stories of mentoring and appreciation from Erb employees who enjoyed financial success through the profit-sharing program at Erb Lumber.

“Many ended up millionaires or extremely comfortable,” Jaffe said. “He didn’t just make it for himself.”