Drew Purcell
Phil Greer, CEO of Greer Companies, and his son, Lee Greer, the company’s president, overlook the City Center development from atop their offices at the Lexington Financial Center in downtown Lexington.
Phil Greer winces a little when discussing his agreement with The Webb Companies to build Lexington’s City Center complex. Oh, he’s excited about it, believes wholeheartedly that downtown will benefit immensely, and that his firm, Greer Companies, will make a fair profit. But his and Webb’s firms are heavily leveraged in the transaction, which is slated to cost more than $200 million. This deal—like all he’s ever done—leaves him uneasy.
To explain why, Greer takes the story back 40 years when he asked First Security Bank for a comparably measly $2,500 loan. He had no credit history or collateral, and he made just $5,000 a year teaching and coaching at Tates Creek High School. Greer wanted to rehab half a duplex and rent it as an investment, and he needed funding. The bank did make a loan, but just one-tenth of what he requested.
“That’s how poor I was when I started,” said Greer, 72, CEO of Greer Companies, a multi-faceted Lexington firm with interests in property development, restaurant and entertainment franchises, racehorses, an electric company and more.
To build credit, he paid back the $250 and then borrowed $500. After paying that, he borrowed $1,000, eventually working his way up to the desired $2,500.
“I’ve never done a deal I wasn’t scared of." — Phil Greer
“I’ve never done a deal I wasn’t scared of, and now I’m in a quarter-billion-dollar one,” Greer said. “I still wake up scared thinking there’s a curveball coming from somewhere.”
Yet Greer has always faced such fears and simply plowed through toward success. His firm has developed more than 100 commercial properties with a new construction value totaling $1 billion. Greer Companies also owns the land beneath those buildings, which are leased to tenants. Though unceasingly humble, Greer can’t help highlighting the delicious irony that “we’re the landlord over at least 10 banks now.”
“I can’t exist without real estate,” he said, allowing that site selection and buildings are his preferred focus. But the company made its greatest payday in the restaurant business. In 2017, Greer Companies sold its 44 Cheddar’s Scratch Kitchen franchised units back to the chain for a mix of cash, stock and seats on Cheddar’s board. Greer’s son, Lee Greer, Greer Companies president and a former Wall Street banker, believed restaurant conglomerate Darden Brands was seeking to buy the Cheddar’s chain, and he knew a sale would significantly increase the price of Greer Companies’ shares.
“We raised the money for a guy to buy us out of our restaurants, and then we took that money and invested it into Cheddar’s stock,” Phil Greer said. “When Darden bought the company, we made a pretty good lick on the stock. Lee engineered that whole thing.”
In the argot of business investment, the sale was a “capital event” that created a new pile of cash for investment into emerging projects. Near the same time, Webb Companies had its own capital event following its sale of Travel Centers of America. The firm’s chairman and co-founder, Dudley Webb, encouraged his old friend from Eastern Kentucky to join him in City Center. Webb said each man, products of coal mining towns, trusted each other to do the deal correctly.
“The Greers have a lot of great attributes, and since we’ve done business with them before this, it’s always a handshake relationship.” — Dudley Webb
“He’s a mountain guy, a handshake guy; our kind of people,” Webb said. “The Greers have a lot of great attributes, and since we’ve done business with them before this, it’s always a handshake relationship.”
This year, the two firms also partnered to buy the BB&T Plaza (at 200 W. Vine) for $7.4 million, a nicely located eight-story, 93,000- square-foot facility in the city’s business district. Phil Greer said plans are to modernize the building and garage and fill it with new tenants.
“That area has so much going for it, so we’re excited to have that property,” he said.
That failures are rare in the Greer business portfolio is something Phil Greer attributes to “a lot of hard work and a lot of luck.” When asked about his business misses, he pauses and said, “I think Coba Cocina was really the only one.”
Built on Richmond Road in 2013 at a cost of $5.7 million, “Coba” was the Greers’ first attempt at their own restaurant concept. The Latin-inspired food was served in a Vegas-whimsical space created to mirror the experience of the family’s many SCUBA adventures inside ocean-carved caves in Mexico. The restaurant struggled and never took off. After closing in 2016, it sat vacant until late 2018, when Cowboy Brazilian Steakhouse opened there.
coba
“With Coba, we tried to do something amazing for Lexington, which has been so good to us,” Lee Greer said. “But it had an identity crisis. We were trying to give a high-level experience for a $13 check average, which just didn’t work. It was a teachable moment for everybody.”
Lee Greer calls Coba’s failure “a $3 million hit” that’ll be offset eventually by lease agreements on the restaurant and a shopping center on the lot.
“We’ll eventually regain all we’ve lost on that … but it hurt our pride a little,” said Lee Greer. Though they tried to correct Coba’s issues, both men say their main focus at the time was on winding down their Cheddar’s interests. “That struggle helped us scrutinize what we were doing and what we needed to get better at.”
While working to save Coba, the Greers hired Jonathan Lundy (formerly of Jonathan’s at Gratz Park) to be its chef and deepen its Latin roots. Following Coba’s closure, Lundy set his sights on opening a Latin restaurant of his own and sought financial support from the Greers.
Phil Greer had mixed feelings: He hated the proposed location at 101 W. Short St., which lacked parking, but he wanted to help Lundy and business partner T.J. Cox get rolling. According to Lundy, Lee Greer was sold on the concept and wanted to loan the men money. But any commitment of funds had to have Phil’s blessing.
“Lee’s faith in T.J. and in me has been incredible,” Lundy said. “Phil wanted to see us find money elsewhere first before he signed off. He was the hardest nut to crack.”
Phil Greer wanted Lundy and Cox to experience the struggle of sourcing capital from multiple sources, not just to get a large check from him. So he instructed them to raise all they could from whomever they could before they came to him for the remainder.
“He was being a coach to us, not giving it to us; expecting us to work for it,” Lundy said. (Phil Greer, it’s worth noting, coached Tates Creek football, wrestling and women’s tennis teams to multiple state championships.) In the end, Phil Greer agreed to a loan. “Without Lee and Phil, Corto Lima might not even exist.”
While Phil Greer’s heart is in land and buildings, his son fancies restaurants—and the land beneath them, of course. In addition to planning upcoming restaurants with Lundy, Greer Companies is a 10% owner in and board member of Taco Tico, once a 120-unit Mexican quick-service chain that’s withered to just 17 units scattered about the Southeast.
Currently, there’s one each in Lexington and Louisville. Both Greers believe the diminished chain has incredible heritage, food quality and upside for franchising and expansion.
“This deal feels like the best of my lifetime and we’re excited about it,” said Lee Greer. “We’ll open one, see how it works, and if it does, build two more. If it’s as good we hope and believe it is—and we don’t mess it up—we’ll go and spread the great taste of Taco Tico all over the world.”