Developer Richard Perlmutter (BA ’76) Navigates Turbulent Waters of Real Estate Industry.
In the mid-1990s, Downtown Silver Spring, in Maryland’s District of Columbia metro area, was an aging suburban shopping district in long-term decline, superseded by newer malls farther from the metropolitan center, beset by crime, and a sore spot for citizens and elected officials alike. It was one of the first places in the country where retail developers decided that parking – not merchandise – needed to front the public right of way.
Doug Duncan, elected Montgomery County Executive in 1994, saw the potential for blight to spread and vowed to “fix Downtown Silver Spring or die trying.” Several previous proposals for out-of-scale, inward-looking suburban retail developments had been shot down by public opposition. Duncan killed the last of those – a proposal by the Ghermezian brothers for a typically gargantuan destination mall to be called “American Dream.”
When Duncan went out again with a new – let’s call it a request for ideas – Richard Perlmutter (BA ‘76), president of the two-year-old Argo Development, stepped forward with partners Foulger-Pratt and Peterson. They proposed a public process to define the values, hopes and priorities of the community – and then make a plan.
Fifteen years later, more than half a billion dollars had been invested, two thirds of it private capital. There’s a Metro station, new headquarters for the American Film Institute and Discovery Communications, movie theaters, a Whole Foods, new restaurants and shops, remade streetscapes and public spaces, several thousand units of housing.
“Richard was very instrumental in all of that,” Duncan remembers. “He was there every step of the way, meeting with the public, putting the plan together and selling the plan.”
The project weathered the Russian debt crisis of 1998, the 2000 dot-com bubble, turbulence after the 9/11 attacks, the Great Recession of 2008, and all the usual barriers that crop up when one is trying to change the urban landscape. “The development business is just one gigantic problem that you deal with every day,” Perlmutter says. “None of these development projects ever want to happen. If you rationally thought about any one of them, you’d never do them.”
Neighbors are opposed, you need a zoning variance, environmental hazards are discovered, preservationists sue, markets tank, tenants get cold feet, financing falls through. It never stops. And yet, people like Perlmutter take on such projects and persevere. The financial rewards can be great, of course. But the personal satisfactions can be just as important. “I wanted to be in the real estate business,” he says. “I wanted to be in the business of making things happen, of creating a legacy, of creating something that was lasting, creating a sense of place, being an agent of change.”
Perlmutter’s years in the School of Architecture and Planning’s fledgling Environmental Design program provided preparation in two areas that served him well: complex problem solving and working in teams. He studied with two of the School of Architecture and Planning’s founders, Mike Brill and Himi Jammal. There was a memorable short course from Buckminster Fuller, visiting lectures by Peter Reyner Banham, and a trip to the Southwest to visit Arcosanti and Taliesin West. They met Paolo Soleri clearing brush around the compound. He invited them to join in the work in exchange for their breakfasts.
But the most important thing they learned was the approach rooted in general systems theory that inspired the faculty in those days: analyze the situation, define the problem, create multiple solutions, test each one, plot the course for implementation, measure results, rinse, repeat.
“What I took away from the program was learning how to think,” he says. “Because at the end of the day the things you memorize fade fairly quickly. It’s how you approach problems. It’s how you approach people.”
Buffalo planner David Stebbins (BA ‘78) was Perlmutter’s classmate and friend. Stebbins recalls an intense, intelligent and thoughtful young man — someone who grasped the essential lessons of the young school quicker than anyone else.
After graduation, there was consulting, then law school at the University of Oregon, a kind of “classical education” that was a perfect complement to his training in environmental design. “It prepared me to do anything I wanted to do,” Perlmutter says. Then there was an unexpected invitation to be the first Packwood Law Fellow, a stint as staff in the U.S. Senate, then general counsel to the Commerce Department. Then came real estate.
He worked a few years with a multi-family housing developer. In 1990, Perlmutter took a job with Bank of America establishing a “work-out” operation for troubled real estate assets left behind from the savings and loan crisis. In five years they did 500 deals worth $1.5 billion – whatever it took to get bad loans off the books.
In 1996, Perlmutter decided it was time to start his own company. Two years later he began the project that would be his legacy. Today, Downtown Silver Spring is everything “Smart Growth” is supposed to be: mixed-use, walkable, transit-oriented. It has a sense of place, where old and new come together to provide something authentic. In 2005, Downtown Silver Spring won a Rudy Bruner Award for Urban Excellence, a prestigious award that recognizes best practices in urban place-making.
“I love to go down there and see how much people enjoy it,” Perlmutter says. “We changed an urban trend, and we all know how hard it is to change an urban trend.”
As a leader in the Urban Land Institute, Perlmutter is excited about the School of Architecture and Planning’s new graduate specialization in real estate development. He says there’s a lot to learn for someone coming into the business these days: the new dominance of institutional investors, millennials’ preference for urban environments, the demand for developers to deal openly with communities where they work.
But even in the turbulence of the industry, even with the inevitable problems, Perlmutter sees opportunity. His attitude toward real estate is not so different from his approach to his favorite pastime, whitewater kayaking. “Whitewater is really a good metaphor for life,” he says. “When you’re on a river, the worst thing you want to do is look at the rock you’re trying to avoid. You look at that rock, that’s where you’re going to go.”
Richard Perlmutter joins fellow alumnus Franklin Dickinson (MArch '85, BPS '83) as the newest members of the School of Architecture and Planning Dean's Council.