In the name of the father

LOUISVILLE MAGAZINE

Louisville Magazine cover March 2005

 

In the Name of the Father

A daughter of the late AI Schneider is engineering a $60 million renovation of the two Galt Houses.

By Robyn Davis Sekula

Louisville Magazine | March 2005

It would have been easy for the heirs of real estate and hotel magnate Al Schneider to sell the family business, take the cash and perhaps buy a nice boat or two and roast their dearly departed dad with a mai tai from some Caribbean Island.

When their father died at the age of 86 in May 2001, Mary Moseley and her five siblings inherited a company that their father literally built from the ground up. It starred as Home Supply in 1945, and later gained prominence by erecting hotels and office and residential buildings under the name AI J. Schneider Construction Co. Some of those buildings have become notable landmarks along the city's skyline, including me Galt House East and Galt House West hotel complex and me One Riverfront Plaza and Waterfront Plaza office towers. Others include me Executive Inn and Executive West hotels, as well as the Medical Arts Building on Eastern Parkway.  All of this, and the business had zero debt at the time of their Father's death.

It was the family's legacy, and one that the heirs were proud to claim. But this was a legacy that came with some baggage. Both hotel complexes needed massive makeovers as occupancy was slumping. The company's corporate structure had been very top-down, with Schneider making all of the decisions, delegating tasks but not areas of responsibility. Competition was intensifying in the Louisville hotel market, particularly downtown with this spring's projected opening of a new 616-room Marriott. What probably made a sellout even more tempting was the fact that there were potential buyers ready and waiting for the heirs to cash in.

It would have been easy, but it would have been wrong, says the gracious and pleasant Moseley, 55, who was anointed as head of the business by her father 18 months before his death. She and her siblings decided to do the hard thing: renovate the hotels, separate the books for various businesses, and move the company's offices to downtown to better supervise the massive renovation of the Galt House.

They decided to keep the hotels because their father, who watches over them in the form of a statue outside the Galt House, was one of downtown Louisville's biggest cheerleaders. Time and again he bet the house on the city's ability to rebuild its downtown waterfront, and time and again, he was right.

So it seemed natural to Moseley, and her siblings, to roll the dice again. "It's a good bet,” says Moseley. "I think our city is getting ready to explode with business."

All of the family's businesses are now consolidated under the name, AI J. Schneider Co., where Moseley is president. The firm has just finished a multi-million-dollar renovation of the Galt House East and is in the midst of upgrading public spaces in the Galt House West, with that building's hotel rooms scheduled for a makeover this summer. The total price tag of the improvements is expected to be about $60 million. The new decor, by the Louisville interior design firm Hubbuch & Co., is light, bright and classic, and stays away, for the most part, from the trendy looks that can quickly date a space. It replaces a dated 1970s agglomeration of red shag carpet, red-flocked wallpaper and lots of heavy, dark wood and low ceilings throughout. To be kind, you might have called it cozy, maybe eclectic. If you weren't feeling so charitable, you'd have called it tacky.

Though it seemed necessary to most who visited the hotel, the Galt House's re-do could not go forward until her father passed away, Moseley says. "We would walk the properties together and he would say,

'Everything is in good shape,''' Moseley recalls. ''I'd see the decor that really needed tending to, but I didn't have the heart to tell him. When you've built it and it's yours, it looks OK to you.

"He was a child of the Depression, and if you had a table and it had four legs, it was a good table and you didn't get rid of it."

The renovation of the massive hotel has been a bit of a juggling act, as its 27,000-square-foot ballroom can seat 2,000 for lunch or dinner and thus is in high demand. Moseley recalls that the ballroom was out of commission for only two months while workers reinforced the floor under it and brought in 40 forklifts, stripping it down to concrete floor and steel beams within 17 hours. The two months following that were a flurry of re-carpeting, wallpapering and replacing light fixtures, all sped up to make it ready in time for President George W. Bush's visit in February 2004.

Everything was replaced in the East's guest rooms; some of the spaces were even restructured. Altered, for example, are Schneider's original designs for some suites that called for building a wall that did not go all the way to the ceiling between the bedroom and a small sitting room so that he could cut down on the number of sprinklers and air vents in the spaces.

Some of the touches that have added a new grace to the hotel include a nearly flat waterfall behind the main reception desk, an aviary in the lobby, an exercise room and a conservatory that features a curved, shallow fish tank that serves as a bar. The hotel is also sporting a new gold logo that replaces the old English script on its exterior. But Moseley passed on replacing some of the dark wood in the hotel, hoping that the new, lighter colors surrounding it will be enough to make the hotel appear fresh again.

THE RENOVATION HAS BEEN a full-immersion baptism in the Schneider business for Moseley, who was the third of six children born to Schneider and his wife, Thelma, who died in 1995. Moseley and her four sisters and one brother, who mostly grew up on a farm on Cane Run Road in southwestern Jefferson County and a house in the Highlands, didn't know what their father did for a living until much later in life; because he gave them each a kiss each morning and said he was "off to make shoes for his girls," they thought he was a cobbler. As older children, they watched him scribble out ideas with an ever-present mechanical pencil on the kitchen table in the midst of meals, and knew not to wipe the sketches off the white Formica until he had re-drawn them on paper.

Moseley started her career as a fifth-grade teacher, but after a few years settled more comfortably into a photography business with her husband, Sam Moseley. Mary kept the books and ran a gift shop and Sam was the main photographer, until the business was sold to employees in the early 1990s.

Sam later joined Schneider as his corporate leasing director, running the company's office buildings. The couple has two grown children, both attending college in Ohio. Mary, though, was not brought into the family business in such a formal way. For about 10 years before her father's death, Schneider, in his typical fashion, would call Mary and ask her to do a certain task. By all accounts, he worked with everyone this way, giving them specific projects rather than areas of authority. She would do whatever her father asked, reporting back to him, never knowing he was teaching her the business, task by task.

But in 1999 the structure changed when Schneider called the family around the kitchen table in his home and announced that Mary would "take the lead" in his businesses. From that day forward, Moseley worked side-by-side with her father, asking lots of questions and soaking up the knowledge he had gained in his six decades in business. When he was too ill to go to the office anymore, he moved into his own nursing home, Parkway Medical, and Moseley and her father ran the business from his bedside there. He weighed in on decisions large and small until he slipped into a coma 48 hours before his death.

Occasionally, Schneider would ask a few questions of his own. "How did I do all of this?" he would ask his daughter, genuinely perplexed at his own accomplishments. Moseley would shake her head, as she still does today, and confess that she had no idea.

After all, she's trying to operate those same businesses today and can't imagine how one person ran it all. "It's taking 12 of us to do his job," Moseley says.

To be sure, Moseley has taken on a few extra duties in her tenure in this new position. She handles the day-to-day operations. Three sisters and two nephews sit on the board (one sister is deceased and her older brother is not able to serve due to his health). Moseley is the only one who works full-time in the business. Each sibling owns an equal part of the company and her sisters handlesome of the firm's responsibilities. Moseley meets her sisters for coffee at one of the Schneider properties once a week to keep them informed of what's going on at the AI J. Schneider Co.'s various properties.

Moseley is modest about her work for the company, clearly uncomfortable in the spotlight. She is reluctant to divulge how many hours she works in a week. She also knows enough about business to keep certain details private, such as the company's revenue. But she will say that she expects the Galt House's occupancy rate to climb 15 percent by the end of its fiscal year this month, and expects it to climb another 15 percent by the end of March 2006. She says occupancy numbers are already rising, and the Galt House has secured some Kentucky Derby business that it had not had in recent memory, mostly because of the renovation. The Galt House is adding about 100 employees in the next month, she says, to help handle the increase in business.

Observers of the Schneider business have enjoyed watching the renovation of the flagship downtown hotel as well as Moseley's transformation into a company president. Russ McClure, a longtime friend and business associate of Schneider, says he thinks Moseley was a good choice to run her father's business. McClure is president of The Cauttrell Agency Inc., which handles insurance for the Schneider Co. He says the company had to bring elevators up to code and transform accounting procedures, among other less-visible changes. "We had to get past the point where Mr. Schneider had a CPA sitting in Shively with 14 checkbooks, handwriting checks," McClure says. "Policies had to be formulated. We're dealing with things he did not deal with.”

Many say Moseley is more polished and approachable than her father, whose imposing height and gruff manner were off-putting to some. And his legendary thriftiness is something mat makes Moseley laugh now. After he built the Medical Arts Building on Eastern Parkway in the 1950s, Schneider was having trouble getting tenants and decided it was because no one wanted to be the first to lease in the new structure. So her mother and father bought inexpensive cheesecloth and dyed it at home, hung it in the windows as if it were drapes, and then turned on the lights. People thought it was occupied, and he had no trouble renting office space in the building after that, Moseley recalls.

But as thrifty as he was, he wasn't cheap, says Paul Luersen, who came to work for Schneider in 1963 as general manager of the Executive Inn. "I can remember the first Christmas I worked for him," Luersen says. "I got a Christmas bonus. I don't even remember the amount, but I was flabbergasted at how much it was."

Though the touches that are in the Galt House now, such as the Rat waterfall and aviary, may sound like expensive luxuries, Moseley is, like her dad, concerned about spending too much. And she has his work ethic, Luersen says. "Mary is different from him in one sense, but in another sense she's got very many of his traits. She has a stubborn streak. She really goes to bat for what she thinks is the right way to do something."

Some would like to see a little more of Schneider in Moseley. McClure says he's particularly looking for one trait, perhaps best described as sure-footedness. "There have been glimpses of something that I've been looking for and smiling to myself when I see it," McClure says. "Her father's genes have come out a couple of times. She's learning to put her foot down and say yes or no in a manner in which a whole room full of men believe her. I've been hoping she'd just rear up in one of these meetings and say what her father would have said."

Moseley says her plans for the future, though, are ones she and her siblings have come up with on their own. While Schneider turned down chances to build hotels in other cities, Moseley likes that idea, even up against the big chains. She's attracted by the possibility of directing her father's company into more of a hotel business, getting away from office buildings and other interests, and making it more streamlined.

As she sees it, the true gamble would have been do nothing. Investing in the center of Louisville will keep the Schneider's portfolio running strong, she says. "We have to stay competitive," Moseley says. "We have to do the same things the other cities are doing to remain competitive. Coming back to the hub of the city and building it up is going to sell us."