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Bob Gries puts money where the bank won't, and it pays

Bob Gries owned the Tampa Bay Storm but has a baseball analogy for his investment approach.

WILLIE J. ALLEN JR. | Times

Bob Gries owned the Tampa Bay Storm but has a baseball analogy for his investment approach.

Rewind to 1998 and the Tampa Bay Lightning was — much like today — a team about to go through an ownership shuffle.

The team's Japanese owners were on the hook for $40 million to their bank, SunTrust, which refused to lend another $5 million to help the money-losing team get through the next six months.

Up stepped Bob Gries.

"We looked at it and said, 'We love it,' " he said. "They were valued at $100 million."

His financial fund ponied up the $5 million. The team sold 6 months later, and Gries and his investors made a 43 percent annualized return.

Thus began the new career of Bob Gries, investor.

Gries, 52, has played many roles during his near 20-year sojourn through Tampa Bay's business and social circles. Former Tampa Bay Storm owner. Gaither High School football coach for one rugged season. Marathon runner. He even dressed in drag with other dads to raise scholarship money at a Pepin Hospitality Center event a couple of years ago.

But as president of Tampa-based Gries Investment Funds, he has found his niche, picking cash-hungry companies that can't get conventional bank loans at decent terms.

His investment choices have been eclectic: from an assisted living facility in North Carolina to the Redington Shores Yacht and Tennis Club to the Five Guys hamburger chain. Yet results have been consistent. Even in down economic times, he has delivered annual returns of 15 to 20 percent on investor cash of about $50 million a year.

The Times recently talked with Gries about his strategies, his distaste for some sports unions, and why he's obsessed with collecting Olympics memorabilia.

As a fellow Midwesterner, how did you end up in Tampa?

I'm from Cleveland. I went to Michigan. I went to college in Ohio, and I spent a few years working in New York. I ended up in Tampa because I bought an Arena Football (League) team. Got my clock cleaned in Pittsburgh my first year.

The only good thing about that first year in Pittsburgh was getting to know the DeBartolo family that ran the arena. They were really good to me. But we didn't do well in Pittsburgh. I didn't want to give up, so we relocated to Tampa.

That was in '91. I bought the arena football team (the Tampa Bay Storm), and we ended up winning the championship in the first year.

After we won, I'm bragging to my mom. I said, "Mom, I'm just like a young George Steinbrenner." And my mom said to me — like that famous line from the (Dan Quayle/Lloyd Bentsen) debate — my mom said, "I know George Steinbrenner, and you're no George Steinbrenner."

That kind of put you in your place.

How do you pick investments?

What we do well and better than most is assess risk. I can't do many things well … but that is one. I can hear the story and understand the issues. Most guys that are successful will say it's not just the deals they've done that have worked out; it's the deals they've avoided that could have been train wrecks. We've been very good at not doing those deals.

We go out there to hit singles, and sometimes a single becomes a double, a double becomes a triple and every once in a while, you hit a home run. But we're about not losing money first and foremost.

Name a home run.

We had a deal just recently where we lent $2 million. We had it structured for a year, and it got paid off in 43 days because of a refinancing. So we made a year's worth of return in 43 days.

What industries are you attracted to?

We don't really care about the type of company. We're always asking the questions, "What's the collateral and how do we get out of the deal?"

We get 10 calls a day, probably, through a lot of relationships. We look at an awful lot of deals on the real estate side. We're out there to do some distressed buying or lending. But it's been very challenging. It's not proved out to be yet the boom everyone thought it would be.

Do you typically take a minority ownership in the companies you invest in?

Our formula is like what Drexel Burnham Lambert did in the '80s. Lend money and get an equity kicker. Generally if it doesn't go right, we've got good enough collateral that we get our money back. … You can live to fight another day.

What's your preferred type of deal?

The area we love is financing the guys buying distressed notes. The banks will never finance (an investor) buying the notes on a distressed property. It's outside their box. It's too complicated. It's just a credit-constrained environment today. Even the best guys, people worth $50 million. They go to the bank and want to borrow $2 million and can't.

What's your relationship with the Five Guys restaurant chain?

We have a loan to them primarily to help them expand in markets outside of Tampa, which they've done. We've provided some acquisition financing.

(The concept) has worked for them because of the simplicity of it. In this environment where people are more cost-conscious, they're not spending $20 a meal. They can spend $5 or $6 or $7.

Where do you see the stock market going this year?

I haven't the slightest idea. I've never made any money over the years in the market, and I have very, very little money in the market today.

It's been a rugged journey for the Arena Football League. Now you're back in as an investor in the Orlando Predators. Do you see the league surviving?

I got out (of the league) in '94 when they mentioned the word union. I said, "This is going to be the end of the league." We couldn't afford a union.

So I'm excited. I'm co-owner of the team in Orlando now. I'm excited that we're going back to the pay structure that we had in the early '90s. I know the players aren't excited about that. (The union) is gone and I hope it's not going to return because that would be the end of the league. It's like GM (General Motors). You may have a sweet period where you can pay everybody money, but if it ends up with everybody gone — employees and owners — then it wasn't the right decision.

I couldn't help noticing the Olympic torch display in your lobby.

I'm a big Olympics collector. I've always loved the Olympics. It's the greatest athletic spectacle there is. I went in 1988 to Seoul for three weeks. I was able to finagle my way into the Olympic Village for the last 10 days. It was great.

What's the story behind the tie you're wearing (which is decorated with multiple photos of his daughter, Zoe)?

I have eight different pictures of my daughter on ties. These are a little old now. I started wearing it five, six years ago and I haven't worn a tie since then that hasn't had her picture on it. One's white; one's pink; one's blue. They don't all match. I've been doing that to keep her close to my heart.

Jeff Harrington can be reached at jharrington@sptimes.com or (727) 893-8242. Follow him on Twitter at twitter.com/jeffmharrington.

Bob Gries puts money where the bank won't, and it pays 02/13/10 [Last modified: Friday, February 12, 2010 10:02pm]
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