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"The Many Lives of Joel Schiavone" (businessperson profile),

Business New Haven, March 2003

The Many Lives of Joel Schiavone New Haven's prototypical ‘creative capitalist' continues to stir the pot
By: Lisa Micali	Business New Haven

Writing about capitalism more than a half-century ago, economist Joseph Schumpeter coined the phrase "creative destruction" to describe the process by which a free-market economy continually evolves, as new and better ways of doing business are introduced and old and outmoded fall by the wayside. "Creative destruction," he wrote, "revolutionizes the economic structure from within, destroying the old one, and creating a new one." He argued that this dynamic process was central to a capitalism's ability to maximize output and wealth creation over time.

While the forces of creative destruction are always close to the surface in any capitalist system, the process often occurs in intense bursts or "discrete rushes," as Schumpeter termed them. That's probably not a bad way to characterize the multi-faceted business doings of Joel Schiavone who, never resting on his laurels, has spent a lifetime diving head-first into a sandpit willing it to become water before his skull hit the ground.

Creative destruction is hardly a steady or predictable process. But it has played a major role in the career of Schiavone, one of downtown New Haven's staunchest - and most controversial - allies and one of the city's most passionate developers. No one has ever accused Schiavone of thinking small. And what is at once the man's blessing and his curse is an independent streak a mile wide. "To get things done, you have to do them yourself," he says today. "And you have to be willing to get involved where you don't know exactly what you're involved in or what the outcome will be."

At an unrepentent age, 66, Schiavone remains every inch the Renaissance man whose colorful history of achievement and controversy precedes him. Cultured (he plays banjo with his group, the Galvanized Jazz Band, that was voted best jazz band in Connecticut for the sixth straight year last year), loves to read history (just finished reading John Adams) and plays a mean game of golf. He is someone who wants to try everything, at least, once. "I don't want to die saying I didn't try," he explains.

After graduating from Yale in 1958, then earning a Harvard MBA two years later, Schiavone hit upon one business idea after another. Nearly all prospered and expanded under his careful and observant eye. After opening up Your Father's Mustache, a nostalgia-themed saloon in Boston that spawned clones all over the country like the latest Nintendo release, he landed back in his hometown of New Haven, an experienced - and wealthy - businessman.
It was during this time that intense periods of bold "creative destruction" took root in Schiavone's heart and mind in the mid-1970s and early '80s, when he scaled the heights not only of the business world but one of America's most famous ivory towers: his Yale alma mater.

After many struggles - personal, professional and political - some good fights, and some not-so-good fights, Schiavone is now entering a new burst of creative destruction - what he calls the third phase of his career. This involves changing perceptions in Fair Haven Heights, a project that has him busy buying and renovating properties, putting in place ground floor retail and apartments on the riverfront - not unlike what he did with the Chapel and College district in the 1980s.

But that's getting ahead of the story. By 1995, Schiavone's real estate revolution had transformed downtown New Haven's retail economy, and that feat alone had radically altered most Elm City-dwellers' lives. Schiavone's real estate machinations throughout the late 1970s and early '80s were risky even by today's standards, but they were part of a plan, a vision of something he cared deeply about: the chance to make an impact by revitalizing a dilapidated part of a great college town - from College to Chapel, west of Temple up Crown and down High Streets - into a bustling neighborhood teeming with street-level retail with upper-level housing. A challenge that the established bureaucracies of Yale and the city of New Haven ignored, or worse yet, saw as unconquerable, a problem left to fester on its own amid the squalor of drugs and crime that had assaulted the city.

Almost single-handedly, Schiavone recast the landscape of modern College and Chapel streets into a 24/7 shopping, eating and cultural destination, seamlessly transforming the area from a retail-starved urban axis into a nascent dining and theater district brimming with life. Over the next decade, he also revived the historic Taft building and anchored a new entertainment district with the reopened Shubert Performing Arts Center and revitalized the Palace Theater, only to watch much of his financial success fall prey to the real estate downturn, what he calls a "depression," that hit in the 1990s forcing Schiavone to retreat from the downtown real estate scene under the weight of hefty mortgages and the collapse of his principal financial partner, First Constitution Bank, the New Haven-based bank that failed in 1991.
 

True to his vision of New Haven as a pedestrian-friendly college town dotted with independent retailers, outlined in a document distributed to the City in 1994, Schiavone encouraged private ownership of downtown real estate. Yale, a dominant force in the city and Schiavone's principal bête-noir (the feeling, it should be noted, is mutual), started at this time to take a more active role in the city by commercializing its intellectual and scientific assets. But much of Yale's true interests lie in what Schiavone deems "their own self-interest. Their only interest," he laments, "is in protecting themselves, not necessarily in helping the city of New Haven."

The core of his theme, however, was, and still is, the restoration of downtown neighborhoods and with it, the promise of economic vitality. It's a mission that has never been easy but one that Schiavone takes earnestly.
That mission explains his quixotic run for mayor in 2001 as well as his feelings toward City Hall and its current occupants. "The city is falling apart," he says. "City policies and programs have been destroying neighborhoods, not rebuilding them. That's not to say the city is not trying," he emphasizes, "all sorts of money is being poured in to it but, there is no tangible output."

Asked if he would run for mayor again, he quickly says no. "This isn't even a one-party town. I don't know what it is….it's a monopoly. It's organized from top to bottom so tightly that no one can break in. It's a lost cause."
His frustration notwithstanding, Schiavone still says he loves New Haven and its denizens. His passion for the Elm City stems from his desire to make a tangible impact. He relishes his role as a big fish in a small pond, the type of player who can hunker down and one who can achieve the seemingly impossible, even when the cards are stacked against him. He describes himself as more of a deal-maker than an operator. In truth, his innate ability to make deals and put together a talented group to carry out his vision is one of his signature talents. Today, the third phase of the Schiavone revolution is unfolding, changing fortunes in a run-down city neighborhood and encouraging hope.

For a fellow who nonchalantly stoops to pick up some garbage tossed carelessly on the sidewalk and place it in the trash receptacle while walking down Crown Street - well, people will tell you, that's just the kind of guy he is: self-effacing, loyal and stubborn to a fault. Qualities essential to becoming a creative capitalist nowadays.
"It's kind of hard to survive these days by not being creative and jumping into unseen waters," he says. "If you're not creative," he adds, "you're doomed."

Creative businesspeople are constantly adapting to their changing environment in order to survive. The forces behind Schiavone's "creative destruction" are not only an engine of economic growth in downtown New Haven, but an agent of change that is restoring neighborhoods and establishing new types of community interaction that is revolutionizing a small part of the New Haven's landscape.
 

Just the kind of thing that Joel Schiavone, a lover of many things, excels in.