Dream deferred, until now, for Meruelo

Sep 13 2011 - 4:58pm

LOS ANGELES -- The kid wasn't particularly big or quick, but he loved basketball and practiced hard enough to be good at it. That fall, he planned on starting for his high school team.

Until his dad pulled him aside to talk about the future.

"I don't think you have the potential to be an NBA player," his father said. "There's another opportunity you should look at."

The family owned a bridal shop at Third Street and Broadway in Los Angeles and rented the tuxedo department to an outsider who was struggling to pay the bills. Maybe the son could take over.

"This is an opportunity to really make something of yourself," he recalled his dad saying.

Though just 16, Alex Meruelo had years of experience in the store, manning the cash register on weekends.

That's how it went for the child of Cuban immigrants who had fought their way up from nothing, who preached the gospel of work.

Meruelo thought it over and decided his dad was right.

"I quit basketball," he says. "It was very hard."

One more thing -- his parents had been charging $700 a month for the tuxedo department. For their son, they raised the rent to $750.

Thirty-two years later, Meruelo stands before the cameras in a suit and tie, trying to stay calm as he is introduced to a group of reporters in Atlanta. He doesn't like news conferences. The bright lights make him uneasy, and his emotions soon take over.

"I never lost the burning desire to be part of the NBA," he says, eyes glinting with tears.

The 48-year-old entrepreneur has reached an agreement to buy the Atlanta Hawks. The deal would make him the league's first Latino owner.

It might seem odd to spend a reported $300 million for a team and rights to its arena when labor negotiations threaten to cancel the coming season. The timing adds to an air of mystery surrounding this Southern California millionaire who for three decades has avoided attention.

Meruelo made his fortune buying in down markets and taking chances, amassing a chain of pizzerias and a network of real estate holdings, a television station and a casino.

"He's opportunistic," says Bert Ellis, owner of KDOC-TV, who has bid against him in broadcast deals. Ellis calls Meruelo "very sharp, aggressive and shrewd."

The Hawks represent his biggest gamble yet, a team that has fared well on court but is struggling financially.

"You're taking a calculated risk," Meruelo says. "You never know the outcome until it happens."

Sitting back in his Downey office, his collar unbuttoned after a long day, he grins. The delight on his face looks nothing if not boyish.

Family legend has it that Homero and Belinda Meruelo fled Cuba in 1961, two accountants who came to Miami, their only possession a box of cigars they sold for $50.

There were no good jobs in Florida, so they moved to New York to find better work. Alex, the second of three sons, was born there. Cold winters eventually drove the Meruelos to Los Angeles, where they saved enough to buy a clothing shop in Glendale.

"That store failed," Alex Meruelo says. "I remember them being very upset."

Saving up for a second try, they found a better location downtown. They prospered, earning enough to acquire rental properties and open Belinda's Bridal. Watching all of this, Meruelo learned the value of determination and taking risks.

"We're all going to make mistakes," he says. "Get back up and try harder."

Reviving the tuxedo department at Belinda's proved simple enough. It had been badly managed, so he needed only to show up every day, stay on top of his accounts and make sure the customers his parents sent over from the bridal department were well cared for. Within months, revenues rose sharply. "A 16-year-old kid making $5,000 a month," he says.

Not that money completely eased the pain of leaving basketball. Years later, the former point guard dragged a friend to watch his alma mater, Rosemead's Don Bosco Tech, play on a rainy night.

"This was his life, his history, and he wanted to see it again," says Pat Murphy, president of Mater Dei High in Santa Ana, where Meruelo's three children attend. "You know he wanted that starting varsity job."

It was shortly after high school, while attending Cal State Long Beach, that Meruelo got another business opportunity. Again, his parents came to him, saying that a pizzeria in one of their buildings had failed. They sold him the property for $25,000.

The restaurant was in Huntington Park, in a Latino neighborhood, so he added chorizo and jalapeno to the list of toppings, hired Latino workers and delivered to streets where others refused to venture.

"There was no reason why Hispanics wouldn't eat pizza," he says. "I thought I could make it work."

By the 1990s, La Pizza Loca was generating $15 million in sales. It grew from a single restaurant to a regional chain with more than 50 locations.

Late last fall, a bankruptcy court put the Claim Jumper restaurant chain up for auction.

As the bidding dragged on for hours and the price headed toward $76 million, Meruelo emerged as a leading contender. One of his competitors -- an executive from the Friendly's chain -- kept asking for breaks to speak with colleagues, and an exasperated Meruelo cursed out loud.

"You're going to lose me," he warned the auctioneer, according to a court transcript. "I'll get up and leave."

Meruelo is given to impatience, as evidenced by more than a dozen traffic tickets that include speeding and improper use of the carpool lane. He can be loud, gesturing with his hands when he talks.

"I'm Cuban," he says, by way of explanation.

But friends insist he can maintain a sense of perspective.

After losing his temper at the auction, Meruelo told his counterparts: "I have to calm myself down." He stayed with the bidding, eventually losing out to Landry's Restaurants Inc.

"When he's upset, he's not nasty," says Murphy, the high school president. "It's like, 'That's not right, let's fix it.' Then he's right back to normal conversation."

If anything, Meruelo is driven by what he calls paranoia -- a constant fear that the next deal will be the one that breaks him. Yet he keeps rolling the dice.

"I can't turn it off," he says. "I don't know why."

In the mid-1990s, the revenues from La Pizza Loca allowed him to gobble up commercial real estate in a depressed market. When property values rebounded, he bought construction companies.

Earlier this year, he found bargains in KWHY-TV -- a Spanish-language station in Los Angeles that NBC unloaded to comply with FCC regulations -- and the struggling Grand Sierra Resort and Casino in Reno.

"He's a maverick-type," says Julio Rumbaut, a media adviser who follows the broadcast industry. "The fact he has a good track record while being a first-generation American makes it even more impressive."

Not every deal has turned to gold. Meruelo owned a number of chicken restaurants before La Pizza Loca that were no great success and says he lost $21 million investing in troubled insurance giant AIG.

Still, the hits outnumbered the misses and eventually put him in position to revisit an old dream.

Twice Meruelo has tried to buy an NBA team. Once, he came within hours of a deal only to see it slip away.

"I was crushed," he says.

There is still time for this sale to fall through, too. League officials are conducting extensive background, legal and financial checks on Meruelo and will present their findings to the Board of Governors for a vote.

"One of the negatives of sports team ownership is that rivalries and decades-old complaints come out of the woodwork to become big deals," says Marc Ganis, president of SportsCorp, a Chicago consulting firm. "No one can ever amass a great wealth without having to deal with great grievances."

Meruelo has landed in civil court at least two dozen times over the years. The cities of Lynwood and Pico Rivera have sued him in quarrels over eminent domain. He has sued, among others, a real estate investment brokerage that he blamed for misguiding him in an unsuccessful bid to purchase an apartment building.

But he has avoided the headlines his brothers have attracted. Homero Meruelo Jr., one year older, is known for developing one of Miami Beach's tallest buildings and for being convicted of grand theft and bribery in the early 1990s. Richard Meruelo, two years younger, ranked among Los Angeles' major landholders before losing control of his company in a recent bankruptcy.

Alex Meruelo has gone about his business in relative anonymity, raising his family in a $9.5-million home in Newport Coast, the same ritzy neighborhood where Kobe Bryant lives. He knew that buying an NBA team would raise his profile considerably.

"Do you understand what you're getting yourself into?" he thought over and over. "Do you understand the exposure you can't avoid anymore?" It seemed that relinquishing this cherished privacy was a reasonable price to pay.

So did acquiring a franchise that needs to boost attendance and revenues. Sports business analysts believe Meruelo has found another bargain in the Hawks. He plans to commute to Atlanta by private jet -- he also owns an aviation company -- to keep an eye on his investment.

The kid who once rented tuxedos is savvy enough to know that team ownership is serious business.

But the grin on his face tells another part of the story. This could also be a dream come true.

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