Stephen M. Ross parlayed two family loans into a multibillion-dollar enterprise.
HIGH FIVE Real estate developer and University of Michigan alumnus Stephen M. Ross reaches to tag the U-M banner prior to a football game in September 2013.
Photograph courtesy of Michigan Photography, University of Michigan
When World War II ended, Stephen M. Ross was just another kid in his northwest Detroit neighborhood who was growing up with big dreams. “I lived at Livernois and Six Mile,” he says. “It was wonderful, a great place to grow up. It was a mixed community, I was sheltered, and you didn’t grow up so fast. There was no television, so everyone was into sports.”
Ross’ love for sports began with his uncle, Max M. Fisher, a successful industrialist and philanthropist who made his fortune in oil and real estate. “His gasoline company sponsored all the sporting events,” Ross says, “so he had the best tickets for the Tigers, Lions, and Red Wings. And I used to go to all the games with him.”
Then there was the Saturday afternoon one fall when Ross’ parents took him to Ann Arbor to watch his first football game at the University of Michigan. “I fell in love with the place,” he says. Soon after, he was a regular passenger on a train that ran every game day from Detroit’s downtown Central Station to Ann Arbor. He also decided that U-M was where he wanted to go to college.
However, midway through his freshman year at Mumford High School, his family moved to Florida, where his father took a new job. “I didn’t want to leave,” Ross says. “I loved Detroit, I had a lot of great friends. In those days, especially, who knew what the outside world was about?”
Ross enrolled at Miami Beach High School, more determined than ever to attend U-M. “And then I didn’t get in,” he says, laughing, “but it wasn’t a shock to me. I wasn’t a good student in high school.”
Ross spent the first two years of his collegiate career at the University of Florida, improved his grades, and then transferred to Michigan to begin his junior year. He graduated in 1962 with a degree in business administration before attending law school at Wayne State University, where he earned a juris doctorate in 1965. He then set his sights on a master’s of law in taxation at New York University. There was just one problem: He couldn’t afford the tuition. Enter Uncle Max, who loaned him the money and sent him on his way.
Ross got his master’s in 1966 and was soon back in Detroit, beginning what appeared to be a comfortable career as a tax attorney at Coopers & Lybrand. But by 1968 he was fidgety, bored, and already contemplating a major career move when a national tragedy compelled him to make a quick decision.
“It was actually the day Bobby Kennedy was shot,” he recalls. “I decided I was going to leave Detroit and go to New York for good. I mean, I had it in my mind, and it just hit me at that point. It was very impetuous, but one never knows when your life will be over — and so I packed up.”
The move to New York was far from a panacea for Ross — at least not right away. By the end of 1970 he’d already been fired from his second job on Wall Street, in the corporate finance department at Bear Stearns, and had arrived at another critical juncture in his life. “I thought I was unemployable, and I didn’t want to start interviewing for another job because I’d already had two jobs in New York in a short period of time.”
Instead, Ross sought a loan from another family member. This time it was his mother, and he asked for $10,000. “She had confidence in me,” he says. “I mean, I had three degrees at that point in time. I told her I didn’t want to go out and get another job. I wanted to try and set up my own business.”
Using the loan to live on, Ross finalized a business plan for a novel idea he’d been working on: Applying his knowledge of federal tax law to finance and develop government-assisted, multifamily housing for long-term investment. He started his company, Related Housing Cos., and soon after clients bought in to his idea and his gamble paid off. “I was earning $25,000 as a salary when I was working on Wall Street,” Ross says, “and I went to $150,000 in that first year. And then I probably made over $500,000 the next year.”
It wasn’t long before Related Housing became the country’s leading financier and developer of affordable housing. By 1980, Ross had raised $40 million in equity to support more than 50 developments. The firm, now known as Related Cos., has 2,500 employees, has built more than $22 billion in properties around the world, and owns assets valued at some $20 billion.
Today, Ross is busy overseeing his company’s Hudson Yards project on New York’s west side. Hudson Yards will encompass more than 17 million square feet of commercial and residential space, and is the largest private real estate development in the history of the country. The first phase of construction is expected to be completed in 2018.
Ross, 74, has an estimated net worth of just under $5 billion, owns the NFL’s Miami Dolphins, and lives and works in the Big Apple’s Time Warner Center, overlooking Central Park — a prized Related Housing development where he’s known as “The King of Columbus Circle.”
He’s led a successful life, but Ross says he’s never forgotten those early days at Livernois and Six Mile. “It’s very important to me,” he says. “You are where you came from” — and he’s especially proud of the $313 million he’s given to the University of Michigan, making him the most generous donor in the school’s history.
In 2004, U-M renamed its business school in Ross’s honor after he made a $100 million gift. In 2013 he donated another $200 million, to be split between the business school and the athletic department. When former U-M quarterback Jim Harbaugh was hired as the school’s football coach last December, there was much conjecture about what was assumed to be Ross’s active role in that process. Ross won’t say, coyly deferring all credit to interim athletic director Jim Hackett.
Did he ever repay those loans he received way back when, from Uncle Max and his mother? “After I made enough money, I tried to pay him back,” Ross says with a chuckle, “and he wouldn’t take it. He just said, ‘Now you do it for somebody else.’ And that’s what led to my charitable giving.” As for the loan from Mom? “She never asked me for it,” Ross says, pausing to tee up a well-rehearsed punch line. “But I paid her back later in other ways.” db