Shapell: An Entrepreneur Celebrates : Anniversary Year of Builder’s Freedom, Firm’s Founding

As a survivor of the Auschwitz death camp of World War II, Beverly Hills builder Nathan Shapell celebrates life every day, but this year holds special meaning for him.

It is the yearlong celebration of the 40th anniversary of his release from the concentration camp and 30th anniversary of the business he, his brother David and his brother-in-law Max Webb founded and he heads.

Shapell Industries: It is a diversified financial and real estate concern and parent company of S & S Construction, which has built more than 50,000 homes and had revenues in 1985 of $397 million.

The 360-employee firm has operations from Sacramento to San Diego and about 20 projects in Southern California, which Nathan Shapell oversees. Among them: the 860-acre master-planned community of Eastlake Village in Yorba Linda, the 600-luxury-home community of Kite Hill in Laguna Niguel, estate homes of Northridge View Estates and 272 condominiums of The Courtyards in Mission Valley. In addition, the firm is active in joint ventures, building subsidized housing.

Yet, Shapell is also chairman of California’s powerful Little Hoover Commission, which promotes efficiency and economy in state government. “So, besides building a few houses here and there, I do get involved in other things,” he said impishly.

The Little Hoover Commission, also known as the Commission on California State Government Organization and Economy, studies anything it considers needs reform.

“Like nursing homes or toxic waste,” he suggested. Then the 13-member body, including two senators and two Assembly members, along with nine private citizens, makes recommendations leading to legislation.

“By law, if the governor wants to reorganize departments, he has to go through the Little Hoover Commission,” Shapell added. “We can subpoena the governor, and I did when Jerry (Edmund G.) Brown (Jr.) was in office.”

Still Seeks Approval

It hasn’t all been rosy for Shapell since he joined the commission in 1969. In 1981, he was accused of conflict of interest as backer of a housing bill to create five new cities while bypassing local regulations. Opponents of the bill claimed that it might allow Shapell to develop the MGM Ranch, which his firm had acquired, although the development plans were then contrary to the wishes of the city of Thousand Oaks.

However, Shapell says that he lobbied for the measure as head of the Governor’s Task Force on Affordable Housing and that the “MGM site was not involved.” The governor vetoed the bill, and Shapell is still negotiating for approvals to build.

The year he took the commission job, his business went public. This was another headache, one that prompted him to say: “If you asked me what was my biggest achievement in this business, I’d say coming back private. One week after we went public, I realized that it was a mistake.

“A building company is entrepreneurial.” In other words, one person has to be part of the work every step of the way. “And if you want to be honest, you can’t make every quota.”

‘Expected to Perform Miracles’

In a 1974 interview, he elaborated:

“When we gained acceptance and began to build on a large scale, I looked for ways to expand the business. . . . We had plenty of cash for expansion. There was no reason to go to Wall Street.

“But I let myself be talked into it. Suddenly, I discovered that when you go public, you are expected to perform miracles. Quarter after quarter, year after year, you are expected to produce higher earnings, regardless of what’s happening in the economy. You stay up nights, trying to figure out how you are going to do it.”

He also stayed up nights trying to figure out how to become private again, and after 13 years, he succeeded.

“We never owned less than 60%,” he said, and in 1982, he regained the rest of the stock for $60 million.

This time he chose to take control. He was thrust into a leadership role many other times, he says, by chance.

Leader by Default

Speaking of his work in post-war Germany, directing housing and other activities for displaced persons in the community of Munchberg when he was only 22, he said modestly, “You know how I became a leader there? It was by default. There was nobody else there to do it.”

His early years are described in his book, “Witness to the Truth” (published by David McKay Co., New York, in 1974). From the time he was 17 and known as Natan Schapelski (He changed his name after coming to the United States “purely as a matter of pronunciation”), he seemed to know how to take charge and make the best of bad situations, and when he eventually wound up in Munchberg, he continued taking a leadership role with the U. S. military’s blessing.

He was 17 when the Germans occupied his hometown in Poland. Later, he survived not only Auschwitz, but death marches and two other concentration camps. He met his wife, Lilly, in Germany after the war. They came to the United States in 1952.

Since then, he has worked hard. His typical work day is from 7 a.m. to 7 p.m. “And when we went public, I also worked all night.”

Volunteer Efforts

He has worked hard not only for himself and his family (“We lost a son, but we have a daughter, son-in-law and three grandchildren--16, 14 and the little one is 6”), but he has put in countless hours for others through the Little Hoover Commission and other volunteer efforts.

He doesn’t consider himself a religious man. After seeing people die at Auschwitz, he says, “I have problems” with religion. However, in the 1974 interview, his philosophy was described by his wife:

“Nathan opened my eyes . . . that we were lucky enough to survive and prosper, and therefore we must concern ourselves with the welfare of others.”

Because of this, he says, he relishes his job on the Little Hoover Commission, which he has served as chairman for 11 years. The longest term for a chairman before him was two years.

Headed Task Force

He was also one of 150 chief executive officers who participated in President Reagan’s Private Sector Survey on Cost Control, known unofficially as the Grace Commission, and was named co-chairman of the task force on real property management, which turned in 45 recommendations designed to save taxpayers $4 billion over three years.

Shapell has no elective political ambitions. “The Hoover Commission is as challenging as an elective office,” he said.

He also serves on several boards and councils: the Dean’s Council of the UCLA School of Architecture & Urban Planning, Board of Councillors, School of Medicine at USC; executive board of the American Academy of Achievement, District Attorney’s Advisory Council of L. A. County and the board of trustees at the University of Santa Clara, which plans to grant him an honorary degree in June.

Shapell is 63, but he has no plans to retire. After all, his close friend is industrialist Armand Hammer. “And he hasn’t retired yet,” Shapell notes. Hammer is 87.