SCHOSTAK VENTURES

Industrial

Joy Road Warehouse, Detroit

Land Sites

Madison Park, Rochester Hills

Northville Park Place, Northville Township

Salem Springs North, Salem Township

Salem Springs South, Salem Township

Multifamily

Lofts of Merchants Row, Detroit

Office

The Century, Southfield

Executive Hills, Auburn Hills

Laurel Park Place Office Center, Livonia

Mack Office Building, Grosse Pointe Woods

Masco Headquarters, Livonia

Northville Health Center, Northville Township

Palace Research and Technology Park, Auburn Hills

Pistons Former Practice Facility, Auburn Hills

Restaurants

Applebee’s (62)

Del Taco (8)

MOD Pizza (12)

Olga’s Kitchen (32)

Wendy’s (55)

RETAIL

Bad Axe Shopping Center, Bad Axe

Canton Corner, Canton Township

Northpointe Shopping Center, Utica

Pointe Plaza Shopping Center, Grosse Pointe Woods

Redevelopment sites, Belleville and Livonia

St. Johns Shopping Center, St. Johns

SOURCES: Schostak Brothers & Co., TEAM Schostak Family Restaurants on brick-and-mortar real estate. But it isn’t the death knell of brick-and-mortar real estate by any stretch.”

The evolution of the shopping center, he believes, will involve giving shoppers a type of experience that transcends the mere purchase of products.

“Has the mall business been the most impacted by the change in buyers’ habits? The answer is yes,” David says. “Eastland Mall in Harper Woods was torn down to build an industrial park. Northland Mall in Southfield was closed and torn down (local officials are overseeing a mixed-use redevelopment). But is the Somerset Collection in Troy going anywhere? No. Somerset isn’t going anywhere.”

Meanwhile, the family’s venture capital operation, led by Bobby, invests and supports cloud-based solutions that are disruptive to the industries they serve such as banking, auto lending, or freight hauling — and founded by an entrepreneur with a track record in that space who’s willing to put his or her own capital at risk.

The venture capital side of the business developed, in part, because Bobby left the family business in 2010 to pursue opportunities in politics. When he returned, he says the real estate and restaurant operations didn’t seem to need him.

“My role in the venture capital space isn’t just to vet a potential investment, but once we make an investment, to utilize my network to help the companies succeed,” he says. “I’m on the board of seven of the nine companies we’re invested in.”

The primary venture is MadDog Technology, which has offices in Birmingham and Pontiac, and where Bobby works closely with Peter Karmanos Jr., co-founder and former CEO and chairman of Compuware Corp. in Detroit, along with a small team of principals.

The former site of the Palace of Auburn Hills (the arena was demolished in 2020), is being marketed as the Palace Research and Technology Park.

The Schostaks were also in the middle of one of metro Detroit’s most high-profile redevelopment projects in recent years: the Palace of Auburn Hills. When the Detroit Pistons decided to sell the arena to facilitate a move back downtown in 2017, despite having very recently renovated what was one of the nation’s most successful entertainment venues, the Schostaks saw an investment opportunity.

What most people thought would happen — a demolition followed by plans for redevelopment — didn’t immediately come to pass. But what isn’t as widely known is that it wasn’t a foregone conclusion when the deal closed. “We looked for a while to see if there was another use for it,” David says, “but we didn’t want it to be the Silverdome (that sat empty for years before being demolished and redeveloped).”

In other words, they didn’t want the Palace to sit as a dinosaur as one implausible scheme after another presented itself. Once it was clear that the 110-acre property at I-75 and Sashabaw Road would perform better if it was redeveloped, the venue was imploded in July 2020; it’s now being marketed as the Palace Research and Technology Park.

Communal Return

Rather than throw a big party to mark the company’s 100th anniversary, the Schostak family and its employees are making gifts to benefit the community.

One of the things no one teaches about long-term success is how to celebrate a century in business. Many companies that turn 100 throw a big birthday party; of the few that reach that milestone, it would be unlikely to find many that didn’t at least have some sort of celebration.

Even two years late, the Schostaks were prepared to recognize their longevity by making a mark in metro Detroit. With the help of employees, the company chose more than a dozen local organizations to receive donations with the money that would have gone to pay for a birthday bash.

“Most people just throw a big party and it’s fun,” David says, “but what have you really done, other than maybe feel good because you threw yourself a party? So we came up with this approach where we would give back to the community — but not what Bobby, Dave, and Mark would choose. Rather, we (looked for) unique causes (that Schostak employees) would choose, and we could have volunteer opportunities for all of us to make an impact.”

Each charity recipient receives, on average, around $100,000. While some donations haven’t yet been finalized, one the brothers were willing to talk about is Life Remodeled, a nonprofit organization in Detroit that repurposes vacant school buildings to serve as hubs of skilled training, community services, reading labs, after-school programs, and recreational and event space.

The organization has special meaning for the Schostak brothers, as their father attended Durfee Middle School (next to Central High School), which Life Remodeled took on and redeveloped into the Durfee Innovation Society. It’s now home to 40 businesses and nonprofit organizations like Beyond Basics.

“We’re pretty proud of the culture,” Bobby says. “It’s something we spent a lot of time on. And the reason we’re in Detroit and investing our 100th anniversary resources is that we wanted people to have the chance to make a difference.”

The Schostaks have also set up an internal fund to take care of employees who may have an unplanned need or experience an emergency in their lives. It started as an informal effort, but the company quickly recognized it required a formal structure in order to take care of such a large group of employees.

“The restaurant business is a very people-intensive business,” Mark says. “Over the years, we would have people come to us with what I would call unexpected, catastrophic events that would happen to them. It could be a sickness, marital problems, or maybe they had a fire or a flood and didn’t have insurance.

“So, we would raise money. The family would put in money and the employees would rally around and put money in, and we would go ahead and give a grant to that employee. That worked out well when we had 13 or 14 employees, but when we grew it became difficult to manage.”

The company responded by creating a care fund that’s supported by employee contributions the family matches. To date, it has awarded more than $800,000 in grants and has taken the form of a 501(c) (3) nonprofit organization, with a board consisting entirely of company employees and no members of the Schostak family.

Just as the three brothers had to learn under their father before taking on company leadership roles, Jeff has worked closely with David to learn the ropes and look for opportunities. In recent years, he’s been bringing the company into the complicated field of global logistics.

One of Jeff’s projects has been to lead an initiative to redevelop older manufacturing buildings around metro Detroit into warehouse and distribution spaces. The effort has met a market need and has given Schostak Development one more avenue for growing its portfolio.

“This whole new logistics, warehousing, and distribution space, and in particular what Jeff has been successful in doing, has been amazing with the construction of the warehouses,” David says. “Because we’re an old industrial town, there are lots of older stock industrial buildings. We’ve been active buyers in that, and we’ve been able to renovate some of them and show them some love — clean them up, make the systems more state-of-the-art.”

David says his prodigy is proving his readiness for a leadership role. “I tell him now, ‘Jeff … it’s your turn,’ ” David says. “Success really comes from having the foresight to realize it’s the next generation’s opportunity. It’s Jeff’s time.”

Where the company will go under the fourth generation is anchored by a solid foundation built over a century of change, but also opportunities. “We need to be flexible and open-minded,” Bobby says.

The enterprise will always possess a risk-taking philosophy, which isn’t for everyone. “We like to think we take measured and calculated risks,” Mark says.

One possible direction going forward is to retrofit former commercial sites that no longer meet their intended use — along the lines of the work Jeff has done in redeveloping or renovating old industrial properties for warehouse and distribution operations.

The move is timely in a red-hot logistics market with tight warehouse capacity, and the company is looking for as many options as possible to help improve the journey of moving goods from place to place for businesses and consumers.

Whatever happens, though, one thing will never change for Schostak Brothers & Co.: People will always need buildings. “We still do our ground-up development,” David says. “If we keep anticipating change, take care of our customers, work as a team, and help our employees and the community, we’ll be successful.”