The Free Market Meets its Match

You would have thought it was Hugo Chavez nationalizing oil fields, the way the Montgomery real estate community reacted to news David Bronner was investing state pension funds in the development of commercial office buildings in the capitol city.

“That’s not a passive investment, and it’s against the law. It’s unheard of for a public pension fund to be actively involved in buying and improving land, ” steamed Montgomery real estate kingpin Aaron Aronov.

Reporter Peggy Roberts chronicled this Goat Hill dustup in our October 1989 issue of Business Alabama, “Bronner Ramrods RSA into Office Development.”

The state was spending $4 million a year to lease office space in privately owned buildings around the city. Aronov Associates took in $1.8 million of that total.

Threatening to implode the downtown commercial market was the Retirement Systems of Alabama CEO’s proposal, to plunge $50 million in two high-rise office buildings and parking decks on land he had assembled for $2.6 million in the center of the capitol city government complex. Not only would the buildings suck up state offices, there would be plenty of space left over for private sector tenants.

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Aronov said he attended a meeting of real estate honchos, called by Business Council of Alabama President Winton Blount III, reaching the consensus that Bronner was “invading territory he had no right to invade.” But he declined to say what they agreed to do about it.

Montgomery architect and property owner Charles Humphries said there was another meeting—to which he was invited but declined—where a “larger group of property owners who lease to state agencies met to discuss how they might fend off the competition, ” Roberts wrote. Aronov denied he called such a meeting. “I have better sense than that, ” he said.

Meeting to fix the market for public office space might be flatly against the law. But investing state pension funds in real estate development was flatly not against the law, said Bronner.

His venture never was challenged in the courts, and, as they say, the rest is history. 

By Chris McFadyen

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