Sam Petros’ journey to become one of Northeast Ohio’s top developers started in a basement. As a teenager, working with his father on a home foundation, Sam Petros was digging out a fireplace the machine had missed. It was there he saw something that would set him on a new course.
“This really nice car pulled up on the street and a very attractive woman got out and went around to the driver’s side,” Petros says. “A gentleman got out on the driver’s side. She gave him a kiss, took the car and left, and he went in the model home. I witnessed all of this from the position I was in. I said to my father, ‘Who is that?’ He said, ‘That’s Bill Pate, he’s the builder/developer.’ I looked up at him and I thought, ‘Damn, I want to be him. I don’t want to do this.’”
That realization sent him from that North Olmsted basement to Singapore, where he had a successful run developing major projects. When he returned to the States, he launched Petros Development Co. and Petros Homes Inc., which combined have brought more than 3,000 new homes to Northeast Ohio and completed over 100 commercial projects, from shopping centers to corporate headquarters.
But it’s not just determination that’s gotten him where he is today. To be a developer of Petros’ success requires vision. Before it was One University Circle the $117 million luxury apartment building, it was an underutilized site with little more on it than the previous iteration of the Children’s Museum. Petros saw the site’s potential and made it happen the same way he has with all his projects over the past 37 years: With conviction.
“You’ve got to recognize it, have it, form it and go out and convince others to join you in that vision, to align with you,” Petros says.
Out of the basement
Petros found an early opportunity to act on his vision when his church wanted to sell a piece of land in North Royalton. He realized the location would make for a very desirable housing development, so he pitched his father on the idea, and they teamed up.
But they hit a snag. The banks needed an experienced partner on the project in order to fund it, so he called Bill Pate, the developer he had seen from the basement. Pate saw the potential and agreed to partner with Petros and his dad. They did phase one together, then the Rust Belt recession happened — this was around 1980 — and interest rates on the note they used to fund the project went from 6 percent to 18 percent.
“If you were around back then, you would have never thought another thing would happen in the Rust Belt,” Petros says. “It was horrific.”
What would have been the next phase went on hold. Petros, 22 years old and eager to get an entrepreneurial foothold, pursued an opportunity in Singapore he found through a friend. For about eight years, Petros worked with WISMA International, developing high-rise, retail, residential and mixed-use projects.
“Because there’s one thing I learned in the basement with that shovel in my hand that morning: I don’t want to do that the rest of my life,” he says.
Rich but unhappy
Petros’ responsibilities in Singapore were many and varied. One day he needed to convince a bank to put $100 million into a project; the next, he needed to convince the Singapore government to adjust zoning.
There, he began to hone his ability to recognize when a property is underutilized. This was the case with the Embassy of the Republic of Indonesia. It, and the neighboring Singapura Forum Hotel, was falling apart on a plot surrounded by shopping centers in a prime shopping area. Petros and his team put together a deck that showed the value of what they intended to do, landed a sponsor and built the Wisma Atria, with five floors of shopping covering 230,000 square feet.
But even after such a success, and many others like it — he says they did 22 very large projects in Singapore — success was never assured.
“We used to get our airline tickets in triplicate — they were these forms and you signed the front, there was a carbon. I carried mine in my back pocket the first four years I was there because I never knew when I was going to have to leave,” Petros says. “And it kept getting worn out and I would have to take it to Singapore Airlines and get a new one, and this nice lady was like, ‘What the hell are you doing?’ But it was that touch-and-go.”
They were getting paid as they accomplished events. In between, they were broke or in debt until they completed the next task. The stress levels at times were intense. But failure was not an option.
“I was not going to fail and let down my teammates at that time, who were the chairman of the company and my partner and, even in many cases, the seller of the land who had been patient with me,” Petros says. “I convinced all these banks to get in. I wasn’t going to let them fail. I was motivated to fulfill my obligations, and of course I had a big payday at the end that was important.”
As time went on, he came to realize experiencing the highs and lows of his life in Singapore wasn’t something he wanted to do for the rest of his life.
“One day, I was going to the American Club after work, which was not unusual. I put my hand on this glass door and I could see the bar. And there were three guys at the bar and an empty stool with two shot glasses. That was my seat. And I looked at these guys — who are all older than me, all expatriates, all wealthy — and I thought, ‘What a bunch of miserable sons of bitches these guys are. And if I stick around here, if I don’t go back to my family, if I spend my life here in Asia, I’m going to end up like that. I’m going to end up rich, but not happy,” he says. “I never opened the door. I went back to my house and told my partner I’m leaving.”
Back in the States, the market had returned and there was a new partner for phase two of the project he and his father had undertaken. When completed, it became the Cedar Estates housing development in North Royalton. That, he says, was when his career in the States really took off. Cedar Estates was 100 lots when finished. He bought more land, added more homes, bought and developed the land across the street and built a shopping center. And the business continued to grow.
Through Petros Development Co., Petros began selling tracts to national homebuilders such as Ryan Homes and Pulte Homes, reasoning that he could sell them land much faster than he could build houses. That helped his company to today rank among the top independent developers in their stables.
His business early on was around 90 percent land development, which came with its own risks. For instance, land on its own doesn’t have much value — it generates no income. And if demand for land is depressed, it’s tough or impossible to sell. As a result, he started building homes because it greatly improved the value of the property. The higher the value of the home, the more the land on which it’s built is worth. So, he started building high-end custom homes.
Next, he got into commercial development as an extension of that same logic — jobs drive housing and housing drives retail. So, he bought the frontages of intersections in North Royalton.
“When you own the land and you put it out there, it’s like having a fishing lure,” Petros says. “If you’ve got the right lure at the right time, you’ll catch a fish. And I did.”
The “fish” in this case was a group out of Toledo called Park West Development that was building shopping centers for Food 4 Less grocery stores. They wanted the land, but surprisingly, Petros didn’t want to sell it. Instead, he wanted to learn more about the retail commercial development business. He partnered with Park West and together they went on to build 20 CVS stores in Michigan and Ohio, in addition to other commercial projects.
The next milestone in the formation of the business was the development of the 310-acre Newell Creek in Mentor. He got the land along Interstate 90 rezoned to commercial, and Avery Dennison built its global headquarters there. Today, Cleveland Clinic is building its Mentor hospital on a nearby Petros site.
More commercial projects followed. He got a golf course in Boston Heights rezoned for retail and industrial, and landed a successful Costco store there. He sold a big tract to Bass Pro Shops, but the retailer merged with its biggest competitor before it could build. And he worked with Spencer Pisczak of Premier Development Partners to build Arhaus Furniture’s headquarters and warehouse, across from which is a 60-acre tract that, as of this interview, was moving toward a big warehouse play.
Win or learn
As Petros grew his business, building a team became increasingly important. He says it became difficult to be enthusiastic about every aspect of the business all of the time. This came to a head as he was waiting for a couple to view one of his open houses and he realized he wasn’t the least bit excited to see them.
“And I thought, ‘Oh my God, you’ve got to fire yourself.’ And I did,” he says. “I hired a salesman and I realized that I was burnt out on it and wasn’t going to make it.’
Building the team was a challenge, and Petros says there were some people along the way who he thought would stay and grow with the business but didn’t. Now, he says, he’s got a great team and is in a position that talent sometimes comes to him. For example, someone who worked for a national homebuilder asked to come to work for him because he had to deliver a house that wasn’t up to his standards, and he didn’t want to do that again.
“I said, ‘You’re the guy I need,’” Petros says. “It’s exactly what we want here. You want to have pride in what you do every day.”
It’s important that people recognize Petros’ companies as honest and capable so they have confidence in the companies’ ability to deliver for them. And that’s one of the reasons why Petros Homes is not a regional builder. By staying at a certain level of business — between $30 million and $40 million in volume for Petros Homes — they’re able to have the control they want over the quality. When the company escalated quickly and its volume was higher, Petros says things started coming apart. Nobody he was working with liked that feeling.
“What makes you happy is doing the right thing and feeling in your soul that you’ve done the right thing,” he says. “So, when you go to bed at night, you’re happy about what you’ve done, you’re happy about who you are, and that that’s really what I was interested in doing. It wasn’t about, ‘Well, we could make an extra few hundred thousand.’ My partner, Gary, he said, ‘I don’t want to miss my son’s football game. I don’t want to miss my son’s baseball games. I don’t want to work like we did that year. I want to have a reasonable life.’ So that’s what we agreed upon. And it’s worked.”
Though he’s had many successes across his career, Petros says he’s learned a lot from challenges and setbacks, as well. For example, he went into San Antonio in 2008 and says he believed he was going to take over the city. The whole thing blew up when the Great Recession hit, and he left with his tail between his legs. Experiences such as these have taught him valuable lessons.
“There is no such thing as failure. You either win or you learn,” he says. “When something goes wrong, I try to learn. A lot of times it’s you, and you have to have the humility to say, ‘That’s me. I did that wrong. That was my fault. I shouldn’t have said that. I should have gone this way. I shouldn’t have committed to this.’
“So, every time you do something, you learn. I don’t crawl into the corner if it goes wrong. I fight my way through to get as much good as I can for everyone involved. But if it’s bad, it’s bad. And you just learn.” ●
- Lead with confidence through change.
- Sell your vision.
- Find your business’s comfort zone to thrive.