Description of a business venture
In this lengthy excerpt, Phillips discusses the execution of his plan to revitalize High Point's Market Square. Inspired by a visit to San Francisco, Phillips eventually managed to generate interest and transformed an old building into a bustling business center. "The Market" is the site of the essential trade meeting Showtime, when suppliers meet and sell to manufacturers.
Citing this Excerpt
Oral History Interview with S. Davis (Dave) Phillips, January 27, 1999. Interview I-0084. Southern Oral History Program Collection (#4007) in the Southern Oral History Program Collection, Southern Historical Collection, Wilson Library, University of North Carolina at Chapel Hill.
Full Text of the Excerpt
But as to how we got here, Market Square is an idea that came about because of me going to the furniture market, regional furniture markets. I came back from San Francisco market in the late '70s. The way I used to come to work was right across from Market Square. I looked up and I'd been passing this building my entire life. I said that it was identical to the building I was in in San Francisco called the Icehouse, which was a wonderful old plant that had been turned into a furniture showroom complex for decorators in San Francisco. We had, we meaning, I had also invested in a company called Behrends and Company, which is an advertising agency. They used to do the state of North Carolina's work. Used to be called Bennett Advertising and then Bennett, Harwell and Henderson. They were a major tenant of mine in another building. I had been asked to invest and became the Chairman of the Board and Dick Behrends ran it. Anyway, the man who used to run the International Home Furnishings Market in High Point, which was originally called the Southern Furniture Building, which is the main complex in this town. A fellow by the name of Leo Herr, he had come to work for Dick Behrends and said to me in a meeting that he thought High Point needed more showroom space. I said, 'I've got a great idea.' I pointed to this building out the window, and they both thought I was crazy. Because everybody has a feeling that [cough] this place was old and has windows and is two blocks from downtown. It just doesn’t fit. I said, 'Well fellows, I have just been to San Francisco and this and that.' They had never seen the building. I paid for their tickets to go to San Francisco. They came back. They were suitably impressed.
That's when I called Mr. Tomlinson and came over to the building and sat down with him in his office and said, 'Would you give me an option to buy your building over a period of time or part of it or half of it or what have you.' It's five hundred and fifty thousand square feet, but there is a 200,000 square foot section and then there is a 350,000 square foot part. They debated it and he did. So we called it, Dick Behrends named it Market Square. We tried to get some people interested in doing it, the Furniture Manufacturing Association was still taking place but we would sandblast brick and bring people down here and what have you. Century Furniture Company were good friends of mine, fraternity brothers of mine. I called Buck Shuford and I said, 'Buck, would you consider coming to High Point.' We felt that the whole market was going to start migrating to this town away from Hickory and Lenoir and whatever it used to be called, the Figure Eight. The buyers would come down here and travel over this region of the state because there was not enough showroom space in High Point or accommodations. He said, 'No. I'm not going to leave my home. I don't want to come down there and live in a motel room', which shows you the attitude. It's not what the customers want; it's what the suppliers want. We had a lot of comments like that. My option expired. I was never able to put it together. Then Tomlinson went on into bankruptcy.
The best thing that happened then was the people that bought Tomlinson out of bankruptcy came back to me and said, 'You had this idea. Would you do it again?' and at a much better price. I said, 'Well, for that price, I'll do it again.' Let's talk about it. It was a very reasonable price. Your talking about not spending very much money at all for a five and a half thousand square feet, twelve acres. It's phenomenal. So we put an investor group together, and the people who had bought Tomlinson, two people got in, Chuck Haywood and Jake Froelich. Jake and Chuck, they had been fraternity brothers, not fraternity brothers but roommates in boarding school. Chuck was in the furniture business, and Jake was in the veneer business. I said, 'I think y'all should be part of this thing because as you exited the machinery and slowly move out and we put together a group and slowly move in, let's all do it together.' So they became part of it. A guy named Dave Zagarolli who is a furniture designer in Hickory was the person we asked to be the general manager who would develop the property who would actually design it. He had had some restorations in Hickory. We thought he was pretty good. We got other investors like George Lyles who is a dear friend of my father's and a dear friend of ours. Then Sandy Rankin who is a dear friend. There are some other names. One was the plant manager that we asked to be an investor, and I've forgotten his name. But anyway, there were originally eight investors.
We went back to Buck Shuford. Buck Shuford said that the time had changed. It was a couple of years later and he felt that he had to go to High Point because his customers told him he had to. So he would lease, he would be our biggest tenant with 45,000 feet. But he wanted nine percent ownership for that because he was renting nine percent of the building. We said, 'Okay. You've got it.' But our first tenant was Kittenger. Kittenger had never been to High Point. We called up Kittenger. He said, 'I don’t want to come to High Point. We do all this stuff all over the world, the White House and this and that, on and on, the State Department. We don't need to come to High Point.' I said, 'Would you please consider a great deal from us?' I sent a plane for him and picked him up and brought him back down here. We gave him the Tomlinson showroom that was already upfitted free. He said, 'I can't turn it down.' He said, 'That's just too good.' The Kittenger name at that time was the best name in furniture in America. So they were really our bell cow. You aren't talking about giving them three thousand square feet of showroom space where you can try to lease 550,000, but that was the stamp of approval.
Within two years, this place was full. It was an incredible success story. We found people like Natuzzi. Natuzzi now is across the street just moved out. We came across him in Copenhagen, Denmark in a furniture show. He is a baldheaded Italian with a great flair and is the largest leather manufacturer in the world. He is vertical where he grows his own cows, has his own tannery, makes his own foam, makes his own furniture, puts it in boxcars and ships it all over the world on containers. He's phenomenal. But he had never been to the American Market. He came here, rented a little space, took off, and now he does close to a billion dollars around the world. He's built a fabulous new building across the street, cost him fifteen million dollars. It's his showroom that he uses twice a year. So it's just lots of interesting folks like that.
If I could just add on to that. The Market in High Point, the 1.1 million square feet that we've evolved into, we added a tower. The tower was the first mixed use building in the state of North Carolina. We were amazed that it was. We felt Charlotte or somebody had already done something like this, but they had not. The rules had to be rewritten to accommodate us.
JM: This building.
DP: This building we're sitting in right here, Market Square Tower. Eighteen condominiums on the top, a swimming pool, underground parking. The first five floors are an extension of the old building showroom space. The next five floors are office space, primarily for again suppliers mostly fabric people. We sold the condominiums to anybody whether you're a retailer, manufacturer or supplier. They're all very creatively done. It's been an interesting adjunct to the Market.
Then the building itself, what happened, we created a thing called Showtime. This, the fabric industry, maybe a hundred and fifty, two hundred suppliers from around the world who sell fabric to the furniture manufacturers who come here and sell it to the retailers. They had never had a market all their own. They were always simply told by furniture manufacturers be in my office or manufacturing plant somewhere in America on that day, and there was so much wasted energy of all these suppliers trying to get in all these places. So we said, 'Let's have our own show. We'll ask the furniture manufacturers to come visit us. We'll have nice showrooms. It'll be orderly. It'll be efficient.' So we created Showtime that has now become a necessity in the industry. Thousands of people come in here from all over the world. The foreign market comes in here to show their wares. The foreign buyers even come in here to see the wares. So it's not just more of the Americans. It's become a great thing, another aspect of High Point.