Lee T. Hanley, CEO of Vestar Development, one of the largest privately held shopping center companies in the Western U.S., died Sunday. He was 70. The cause was pancreatic cancer.
Hanley spent more than three decades in the industry and was regarded by many as an icon in the development community. Under his leadership, Vestar, which Hanley and several other founders spun off from a home building company in the late 1980s, became a dominant player in its metro area and the Los Angeles and San Diego markets. The company has undertaken some of the most challenging, yet innovative and ultimately successful open-air projects in the country, starting with the development in 1989 of Arizona’s first power center, the former Scottsdale Pavilions.
Vestar negotiated a land lease with the Salt River Pima-Maricopa Indian Community to develop the 1.1 MSF center on about 100 acres owned by the sovereign tribe. The center attracted major retailers because of its proximity to Scottsdale.
By incorporating lakes, waterfalls and other design elements that were relatively new to shopping centers, Vestar set out to create a sense of place at Scottsdale Pavilions, and that remains a mission for the company with its projects today. (The center is now owned by Phoenix-based De Rito Partners Development Inc. and has been renamed The Pavilions at Talking Stick.)
Born in Los Angeles, Hanley graduated from the University of Arizona with a degree in accounting and served as an officer in the U.S. Marine Corps, including duty in the Vietnam War. Early in his career, he worked for the Xerox Corp., rising to become one of its top salesmen in the West, and for brokerage firm CB Commercial, the predecessor to CBRE Group Inc. In 1977, he was recruited by the former Estes Homes of Tucson to start its commercial development division, which built centers as amenities for its master-planned communities.
In the late ’80s Estes was seeking to raise cash to pay down debt, and Hanley spearheaded a buyout of his division in partnership with three colleagues, Richard J. Kuhle, David J. Larcher and J. Paul Rhodes, all of whom remain with Vestar. The acquisition was partially funded by the pension plan of the former Ameritech Corp., one of the seven so-called Baby Bells created as a result of the breakup of AT&T in 1984. Ameritech was eager to expand its portfolio of real estate investments in the West and became a capital partner to Vestar, giving it a competitive advantage over other developers during the credit crunch and recession of the late ‘80s and early ‘90s.
During that period, Vestar made its move into the highly competitive Southern California market, acquiring properties and securing entitlements for projects in places where other developers had tried to no avail. Its first ground-up project in the state was Cerritos Town Center, a 600,000 SF power center that brought one of the first Wal-Mart stores to the Los Angeles area. Vestar sold the center in early 2012.
Rick Hearn, Vestar’s director of leasing, says Hanley was a mentor who led by example. Hanley inspired him and many others at Vestar to get involved in politics, charitable causes and professional organizations.
“I consider myself blessed to have had a mentor like Lee,” says Hearn, one of many longtime Vestar employees. “He left his mark on a lot of different organizations.”
Hanley was involved in numerous other organizations. He was a trustee of the Urban Land Institute and the Barrow Neurological Foundation, which raises funds for the Barrow Neurological Institute at St. Joseph’s Hospital and Medical Center in Phoenix. He also served on the board of the TGen Foundation, which raises funds to support the Translational Genomics Research Institute, a non-profit biomedical research institute in Phoenix.
He was active in the Greater Phoenix Leadership council, the Valley of the Sun United Way and other organizations in the Phoenix area.
Hanley and his wife Nancy were married for more than 40 years and had three children and seven grandchildren.