A Conversation With Kemper Freeman

Published: February 14, 2013

Kemper Freeman, Jr., received the inaugural Icons of Retail award from the UW Bothell School of Business at a ceremony at the Hyatt Regency in Bellevue.

Freeman is CEO and Principal Owner of Kemper Development Company. As the owner of properties such as Bellevue Square, Lincoln Square and Bellevue Place (including the four-diamond Hyatt Regency Hotel), Freeman is the central force behind the explosive growth and sustained dynamism of downtown Bellevue

Here are highlights from the question and answer session with Freeman, led by Tom James, a managing member of the Opus Law Group.

How did your childhood influence you?

“From my dad, I learned what is right and what isn’t and how to tell the difference. That’s important in business and in life. I had three sisters and I was the only son. I think I was disciplined more than they were.”

How did Snowflake Lane come to be?

“I had a meeting with chair of Saks 5th Avenue the first week of December. As I was walking around New York City one evening, I rounded the corner and saw the front of Saks … lit up with lights and Christmas music. I knew then I wanted to do something on the street to join the Bellevue Collection.”

Snowflake Lane is now in its 8th year; it is conducted for thirty consecutive nights. The event includes 122 high school and college students.

“Every time I speak, someone comes up to me to say, ‘my son or daughter was one of your drummers.’ It changes their lives.”

Is it an advantage to have local ownership?

“Rates are driven too much by bean counters. It’s not the right motivation to be in this business. Kemper says his staff knows its customer. “We live here. We spend 30 percent of our time on community building (hospitals, parks, schools, etc.) “When my grandfather got here there wasn’t a water system. We live here, our kids go to school here. For others, it’s just one of 50 or 100 shopping centers. Each customer base is unique.”

How has the Internet affected “bricks and mortar” retailing?

“The media has been saying bricks and mortar retail will be gone, and everyone was alarmed. We found the Internet isn’t our enemy, it’s our friend. The customer uses the Internet to become informed about products they are interested in. The emotional fulfillment of brick and mortar shopping is important. As humans, we like to act on emotions. Shopping is an emotional experience. If they can come and see product and talk to someone, you’re ahead. In that sense, Internet and bricks and mortar are a team.

“Today’s customer is more knowledgeable than ever. If your clerk is not knowledgeable and the customer finds the clerk doesn’t know, it has the opposite effect. This puts pressure on retail to know what they’re selling.”

Freeman notes that the Apple and Microsoft stores are two best retailers at Bellevue Square. “They have done everything on the Internet,” he says, “and they have ‘mind boggling’ sales. They provide total customer satisfaction.

If bricks and mortar retail isn’t winning (against Internet competition), “its’ because we’re not training our staff to keep up with the informed customer,” Freeman noted.

What do you look for when you are hiring?
“I believe in the concept of a team,” Freeman says. “I want people who are smarter than I am at what they know.” As a family business, Freeman notes that of 180 employees, five are family. Freeman looks for people who have a great attitude and work ethic. “Most developers see themselves as the high water mark of the brainpower. It precludes them from being as successful as they could be.”

Reflect on success and failure
“I’ve had plenty of opportunity to make myself humble,” Freeman says. “I used to carry a 4×6 card. Every time I made a mistake I would write it down and how much it cost. My dad allowed me to make mistakes and learn from them. Sometimes you have to fall on your face a few times.”

What part of leading do you enjoy?
Leadership is a continuous education of learning and thinking. You need to let employees know what we’re trying to do, and let them figure out how to do it.”
Freeman says he learned important leadership lessons from his uncle that he uses to this day. “Employees want to know ‘do I have the ball or not?’”

What’s the story of Bellevue Square?
“Eddie Debartolo (famed real estate developer) came to Seattle and announced he was building a shopping center. We were redeveloping Bellevue Square at the time. There was no money for a salary; I was working three jobs at the same time. It was far from clear how it would work out.” Three years later, Debartolo sold his land to Microsoft. Once Bellevue Square opened, the value of Bellevue Square went from $3 a square foot to $75 a square foot. After five years, it was assessed at $500 million.

Plusses and minuses of family business
“Family businesses usually do not work,” Freeman says. “There’s all the emotion of business and family. It’s really hard. When they work, it’s the most beautiful form of business. I’m the third generation; my daughters are the fourth.

What’s coming in 10-20 years?
“All the things we believe work are still there. The Internet is a tremendous additive.
If we are on our job, we provide a great emotional experience. When you read the mall is dead, it’s only true if it’s being run by people who don’t understand it in the first place.”

The Bellevue Collection consistently posted double-digit increases in the midst of the recession, Freeman noted. In December, they reported a 19.8 percent increase.

“We never stop doing what works,” he concluded.