First African American billionaire Bob Johnson shares wealth of wisdom. (Image: Courtesy of Subject)

This week on The Urban Business Roundtable, UBR Contributor Renita D. Young talks with master wealth builder Robert L. Johnson, founder of The RLJ Companies and America’s first Black billionaire. Johnson made business history when he took BET public in 1991, making it the first  Black-owned company traded on the New York Stock Exchange, 11 years after he founded the cable network in 1980. This would be far from the last of “firsts” Johnson would achieve on his way to being named No. 2 on Black Enterprise‘s list of Titans: The 40 Most Powerful African Americans in Business in the 40th anniversary issue of the magazine.

In 2000, after taking the BET private again, he sold the cable network to Viacom for $3.2 billion to become the first African American billionaire. He acquired the Charlotte Bobcats in 2003, creating the first Black-owned NBA franchise. Johnson sold the Bobcats to NBA legend Michael Jordan in 2010, but continues to hold a minority stake in the team. Johnson has also launched a plethora of other ventures under the RLJ banner, including RLJ Development, L.L.C., ranked No. 6 on the Black Enterprise 100s list of the nation’s largest Black-owned industrial/service companies with 2010 revenues of more than $578 million. In addition, Johnson is widely considered to be the No. 1 Black hotel owner in America, with hotels from the United States to Liberia.

In addition to joining Young at the Roundtable, Johnson will also be sharing his wealth building philosophy this Saturday, September 17, 2011, as the keynote speaker for the 18th Annual WVON1690 Financial Seminars at Malcolm X College in Chicago. You’ll also get the chance to meet me at the seminars; I’ll be there for an exclusive conversation with Ariel Investments CEO and legendary investment expert John Rogers. In fact, in my “Alfred’s Notepad” segment, I make the case for why entrepreneurs need to make their ongoing financial literacy a top priority, because there is a strong correlation between the effective management of personal finances and the smart investment of business resources. To register or learn more about the full agenda of free financial seminars, go to WVON.com or call 773-247-6200.

Productivity expert Peggy Duncan (Image: Courtesy of Subject)

Also, UBR Contributor Teria Seah sits down with award-winning productivity expert, author, speaker and trainer Peggy Duncan, founder of the Digital Breakthroughs Institute, about the importance of effective time management for business owners. Duncan has authored several books, including The Time Management Memory Jogger: Create Time for the Life You Want (Goal/QPC).

And finally, every week on UBR, you’ll get motivation and inspiration from author and entrepreneurial icon Farrah Gray, a weekly wrap-up of business news from USA Today business correspondent Charisse Jones, our Patient Investor Report from Ariel Investments and key economic intelligence for small business owners from our UBR economists Derrick Collins and Rasheed Carter.

If you have a question you want answered or a topic you want addressed on The Urban Business Roundtable, connect with me at BE Insider, the social media network for people who are serious about Black Enterprise. You can also find me on Twitter and Facebook.

Alfred Edmond Jr. is the senior VP/editor-at-large of Black Enterprise and the host of the Urban Business Roundtable, a weekly radio show, sponsored by Ariel Investments, airing CST Wednesdays at 8:30 a.m., Thursdays at 6:30 p.m. and Saturdays at 9:30 a.m. on WVON-AM 1690, the Talk of Chicago. You can also listen live online at WVON.com. Check back each week for UBR Spotlight, which features additional resources, advice and information from and about the topics, entrepreneurs and experts featured on the show.

Haitian President Rene Preval, Johnson, and Youri Mevs, president of the Haitian Economic Development Foundation. (Image: RLJ Companies)

This week on The Urban Business Roundtable, UBR Executive Producer TaQuoya Kennedy talks with BET founder, RLJ Companies CEO and billionaire Robert L. Johnson, who shares the business decisions and life philosophies that have helped him to become one of America’s most accomplished entrepreneurs.

VIDEO: Watch Robert Johnson’s Power Player profile on the Black Enterprise Business Report

Ranked among the BE “Titans: The Most Powerful African Americans in Business–and How They Shaped Our World” , Johnson made business history when he took BET public in 1991, the first time a Black-owned company was traded on the New York Stock Exchange. In 2000, he sold the cable network to Viacom for $3.2 billion, making him the first African American billionaire. He acquired the Charlotte Bobcats in 2003, creating the first Black-owned NBA franchise and launched four other BE 100s companies.

Last April, RLJ Companies announced a partnership with manufacturing company Global Building Solutions to develop quick and cost-effective mass housing in Haiti following the country’s January 2010 earthquake.

Kevin Ross (Image: Courtesy of Subject)

Also on this week’s edition of The Urban Business Roundtable, contributor Renita Young speaks with international speaker, author, business consultant and designer life coach Kevin Ross, who shares fundamental keys to success in business and offers tips on how to live what he calls a “designer life.”

In my “Alfred’s Notepad” segment, I share steps new and aspiring entrepreneurs should take to establish relationships with more experienced business owners who can provide the benefit of experience, helping them to avoid unnecessary mistakes as they launch and build their new ventures.

In addition, every week on UBR, you’ll get motivation and inspiration from author and entrepreneurial icon Farrah Gray, a weekly wrap-up of business news from USA Today Business Correspondent Charisse Jones, our Patient Investor Report from Ariel Investments and key economic intelligence for small business owners from our UBR economists Derrick Collins and Rasheed Carter.

And finally, great news: the deadline to use the special discount code for UBR listeners to register for the Black Enterprise Entrepreneurs Conference, scheduled for May 22-25, 2011 in Atlanta, has been extended. Just listen for when I share the code during the show, or connect with me at BE Insider to get the discount. You don’t want to miss the nation’s largest annual gathering of Black business owners; you need to be there and encourage others in your network and business community to attend as well.

If you have a question you want answered or a topic you want addressed on The Urban Business Roundtable, connect with me at BE Insider, the social media network for people who are serious about Black Enterprise. You can also find me on Twitter and Facebook.

Alfred Edmond Jr.

Alfred Edmond Jr. is the senior VP/editor-at-large of Black Enterprise and the host of the Urban Business Roundtable, a weekly radio show, sponsored by Ariel Investments, airing CST Wednesdays at 8:30 a.m., Thursdays at 6:30 p.m. and Saturdays at 9:30 a.m. on WVON-AM 1690, the Talk of Chicago. You can also listen live online at WVON.com. Check back each Wednesday for The UBR Morning Post, which features additional resources, advice and information from and about the topics, entrepreneurs and experts featured on the show.

Robert L. Johnson

VIDEO: Watch Robert Johnson’s Power Player profile on the Black Enterprise Business Report

In celebration of our 40th anniversary, Black Enterprise is taking a look both forward and backward at the world of black business. Our list of 40 “Titans: The Most Powerful African Americans in Business–and How They Shaped Our World” recognizes and pays homage to the entrepreneurs and business men and women who paved the way for all of us. Follow our countdown of the most important black business leaders of the four decades since Black Enterprise Magazine was founded in August 1970.

These are the men and women who fought the odds, suffered setbacks, regrouped, and eventually emerged victorious. Whether they conducted business from their own offices or the executive suite, their professional excellence, deal-making prowess, and unwavering advocacy converted promise into channels of prosperity and levers of power. These are the pioneers who withstood the elements—institutional racism, resistance from the business establishment, and lack of resources—to plant a flag on their own patch of territory.

These are the Titans: bold leaders who shattered conventional modes of commerce. Because of their contributions over the past 40 years, the world of business has been transformed forever.

Be sure to pick up the commemorative 40th anniversary August 2010 issue of Black Enterprise, which contains the entire Titans list.

Johnson

The venture, which will be known as Caribbean Opportunity Holdings, is planning to build a structured insulated panel (SIP) manufacturing facility in the area near Cap-Haitien, Haiti’s second-largest city.

“We know that putting a manufacturing facility in-country as opposed to shipping all of the materials…from outside will create more jobs and make it cheaper to make the houses,” said Lisa Pickrum, chief operating officer of RLJ Companies, which was founded by Robert L. Johnson. “We have found that sustainable projects that help people in the long term… only come about and are maintained when you move beyond aid into profit sharing businesses.”

Johnson also launched RLJ Development L.L.C. (No. 8 on the BE Industrial/Service list with $605.2 million in revenue) and is the creator of Black Entertainment Television.

Most buildings in Haiti are made of concrete blocks, which tend to crumble in hurricane or earthquake conditions. The SIP technology is uniquely applicable to Haiti because it is waterproof, humidity resistant, resistant to earthquakes up to magnitude 7.0, and lightweight.

Caribbean Opportunity Holdings will produce the pre-engineered and exportable building materials in Cap-Haitien, about 130 miles north of Port-au Prince, where the magnitude 7.0 earthquake killed an estimated 230,000 people in January and left 1.3 million survivors homeless and living in tent camps.

“We chose [Cap-Haitien] as a place that would be able to sustain some job creation and tourism,” says Pickrum. Scores of displaced people are moving to Cap-Haitien, putting a lot of economic strain on the province.

The project will also serve Port-au-Prince since the building materials created at the plant can be shipped by barge or truck to help build infrastructure across all of Haiti.

Pickrum declined to give the cost of the facility, but estimated that it would be a multimillion dollar budget that would create 150 to 300 jobs in that location. COH will profit by selling construction and building materials to nonprofit organizations and donors. Although, the return will not be large initially, Pickrum says the increased infrastructure will pave the way for longer term tourism developments like hotels.

The two companies have a track record of constructing projects where infrastructure is scarce. GBS partnered with RLJ Companies in 2008 to build a four-star luxury resort and spa in Monrovia, Liberia, in less than 12 months. The RLJ Kendeja Resort & Villas, a 78-room villa style hotel, which opened March 2009, was the first hotel construction completed in Liberia in twenty-five years.

The best–and even the only–avenue to real wealth for black Americans are through sports and entertainment. The majority of the “NEWBOs” featured on the program hit, run and jump for a living (the NFL’s Terrell Owens, Major League Baseball’s Torii Hunter and the NBA’s LeBron James) or perform on stage and in recordings (Cash Money Records co-partner and rapper Bryan “Baby” Williams, contemporary gospel artist Kirk Franklin). An exception is RLJ Development CEO and billionaire Robert L. Johnson—the only subject featured who can make a credible claim to being “uber-wealthy.” Of course, he made his fortune by creating and marketing a cable channel featuring black people singing, dancing and rapping. (Oh, and unless you’re Oprah Winfrey, black women need not apply—apparently there are no female NEWBOs.)

Black athletes and entertainers are among the richest black Americans and among the nation’s wealthiest Americans. The problem with this is that NEWBOs primarily focuses on the gross income of the subjects. However, the real measure of wealth is not gross income, but net worth—a person’s assets minus their liabilities. (Black Enterprise readers are familiar with the net worth tables accompanying our monthly Wealth for Life profiles.) Lee Hawkins, the host/interviewer of NEWBOs and a Wall Street Journal reporter who’s authored a forthcoming book about this group, goes to great pains to hype the fact that “black athletes in the NFL, NBA and Major League Baseball and the 20 highest paid hip-hop entrepreneurs” earn a combined total of $4.5 billion dollars. He quickly moves past the fact that this is the combined income of more than 1,000 people, and never mentions that the combined net worth—the real wealth—of this group would be a small fraction of that total. Athletes and entertainers earn good money—but they don’t even come close to being uber-wealthy, the term Hawkins repeatedly uses without ever defining what he actually means when he says it.

Aren’t these the stereotypes and false messages we’ve spent much of the past 40 years trying to deprogram from American thinking, and black American thinking in particular? In the age of Obama, why are we still telling each other—and worse, our children—that our best chance to become wealthy in America is through sports and entertainment? Especially when anyone who understands wealth and the American economy, as CNBC and Hawkins surely do, knows that is not true? Ken Fisher’s book The Ten Roads to Riches: The Way The Wealthy Got There (And How You Can Too!), correctly identifies sports and entertainment as the most difficult way to achieve serious wealth, with the longest odds. The primary reasons to pursue a career in sports or entertainment is because you are good at it, and you like to do it—not because you have more than a prayer of ending up with Bob Johnson money. There are no athletes or entertainers on the most recent Forbes 400 list of the wealthiest Americans. (You needed a net worth of at least $1.3 billion to make the most recent list. Their combined net worth? $1.57 trillion.) I’ve personally come to suspect that black people are intentionally steered toward sports and entertainment to keep us away from the real sources of wealth in America.

Forget the fact that, as a television interviewer, Hawkins is a great newspaper journalist. Forget that there is nothing remotely new about a tiny percentage of black people from poor backgrounds suddenly achieving fame and fortune in sports and entertainment, often fulfilling the role of financial saviors for entire extended families. Forget the fact that there is nothing unusual about most of these NEWBOs being under the age of 40: sports and entertainment are youth-oriented industries—it’s extremely rare for a recording artist or athlete to maintain his or her earning power past the age of 35. (By the way, Bob Johnson is 62.) And don’t even get me started on the poor taste, if not outright insensitivity, of Hawkins focusing—as millions of Americans struggle through a devastating economic crisis—on how his subjects spend their money. (How many black kids could be put through college on the half-million dollars Cash Money’s Williams told Hawkins that his grill is worth? Williams has the right to spend his money as he pleases. But what’s the point of Hawkins celebrating it? Why is it that when wealthy whites are interviewed, the focus is on how they made their money, but wealthy blacks are usually stereotypically profiled as profligate spenders? When did CNBC start airing MTV Cribs?)

To be fair, to really identify the wealthiest black Americans would take a lot of digging—after all, truly wealthy black people, (including many of the corporate CEOs, Wall Street executives and owners of Black Enterprise 100s companies featured in Black Enterprise) are not eager to draw attention to their wealth. They’re quite happy to let Baby Williams and Terrell Owens get all the attention—and aggravation—that comes when people realize you’re earning big money. But isn’t that the kind of thorough, hard-hitting, uncompromising financial reporting CNBC is supposed to be known for?

NEWBOs is of the kind of check-the-box, toss-the-reporting-standards programming that black Americans have come to expect—and too often, regret—starting around the King Holiday in January through the month of February. To me, it feels like the show was created to serve two purposes: as a barely disguised infomercial for Hawkins’ book and a quick and easy way for CNBC to offer programming for Black History Month (whew—made it with two days to spare!).

Sorry CNBC—that’s not good enough. And no using the flack you’re going to get, and deservedly so, for lowering the CNBC bar with NEWBOs as an excuse to do no programming about black people at all.

The 4,061-room portfolio consists of high-end full- and select-service hotels primarily located in major urban markets including Boston, Baltimore, Chicago, and Washington, D.C. These assets, which are expected to net RLJ a profit of more than $300 million, are currently operated by industry leading brands, including Marriott, Hilton, and Hyatt.

“[RLJ] demonstrated very good skill in identifying properties that would appreciate rapidly,” says Paul Adornato, senior REIT (real estate investment trust) analyst for BMO Capital Markets. “There is more of an interest in urban real estate these days. If you are able to buy in a built-up city then you are protected from new competition to some extent.”

“As a part of our investment strategy we renovated a number of the hotels, changed management companies, and implemented a number of value-added strategies to create incremental value for this portfolio,” says Thomas J. Baltimore Jr., president of RLJ. “Inland approached us about buying the entire portfolio and made a very compelling offer that was too attractive to pass on.”

Although they had planned to hold those assets for five to seven years, the company was able to launch the RLJ Urban Lodging Fund, deploy their capital, implement their strategies, and sell the assets in less than four years, according to Baltimore.

“Four years is a relatively quick time frame, but not unheard of. The hotel market has held up pretty well, up until now,” says Adornato. “If the economy does poorly, then hotels generally do very poorly.” Hotels are sensitive to the economy, considering that the majority of their business comes from business travelers, notes Adornato.

“We were able to sign the contract in August before the credit crunch, and closed this transaction in February,” says Baltimore, explaining why the closing was profitable under present financial conditions. “We were able to take advantage of a very favorable environment last summer and maintain an attractive price despite the credit turmoil”

According to RLJ Development’s Website, the portfolio has outperformed its peers, returning a cash-on-cash yield of more than 20% to its investors. “To see a large portfolio [like this] change hands is noteworthy in this environment. These days the real estate market is slow in terms of the number of transactions,” Adornato says.

“In one sense, Inland may be betting that the economy won’t dip into a deep recession, and perhaps [RLJ Development] may have a more pessimistic view or just want to monetize some of the profits that they have built up in their portfolio while going into this uncertain economic outlook,” Adornato theorizes.

RLJ still owns 114 hotels and manages more than $2.5 billion in assets. Baltimore says the company has just launched its third private equity fund, RLJ Real Estate Fund III, which raised another $1.2 billion in equity. “We have another $4 billion in purchasing power in the RLJ Fund III,” says Baltimore. “And we will continue to be a very active acquirer of lodging real estate in the near future.”