Ukrop brothers say name a blessing and a burden

Richmond's annual Christmas parade stood at a critical juncture in 1992.

One of the parade's key sponsors at the time had pulled its funding.

Organizers, fearful that the parade might have to be scaled back, approached executives at Ukrop's Super Markets Inc. about sponsoring the event.

The family-owned grocery chain stepped up and became a major sponsor to the parade that year. They have done so every year, donating about $50,000 each year for the last several years.

"This was something we thought was important to the community," said James E. "Jim" Ukrop, chairman of the family-controlled First Market Bank and former chairman and CEO at the grocery chain.

The Ukrops -- notably Jim and brother Robert S. "Bobby" Ukrop, the chain's chairman and CEO -- are more than just grocers. Their reach includes business, politics, community development, education and arts.

Their brand of involvement at times has ruffled feathers among residents and civic leaders. "I'm a lightning rod. Bobby is much more diplomatic than I am," Jim said.

The family's influence could wane in the years to come if they sell the grocery chain, as industry publications have speculated, and as First Market Bank, which is majority-owned by the Ukrop family and the grocery chain, gets ready to merge with Union Bankshares Corp. And competitors continue to eat away at the chain's market share.

The chain has had loyal followers for decades -- even holding the No. 1 spot in local grocery sales against industry giants since 1986 until this year.

During a wide-ranging, 90-minute interview with the brothers last week about their impact in the community, both again declined to talk about a potential sale.

"Whatever the future holds, we will take very seriously our presence in the community," said Jim, 72. "And whatever happens in the future, I think I know Bobby and I will be looking at it from a point of view of what is the best for those folks that work for us and their futures and for the community. Period."

His younger brother quickly added: "We are going to live here the rest of our lives. We are not going anywhere. The ebbs and flows of any business or organization may change. . . . We have been in a variety of businesses, so while some approaches might change, we are still going to be around."

If the supermarket chain is sold, that could affect philanthropic giving, area leaders say.

"I think they would still be active in community activities," said Beverley W. "Booty" Armstrong, vice chairman of CCA Industries Inc., a holding company whose businesses include The Jefferson Hotel in Richmond, and chairman of the Capital Region Airport Commission.

"I think they would be personally generous, of course, but they wouldn't have the supermarket umbrella for the large community events."

. . .

Whether you've attended the 10K run along Monument Avenue, received help from a local charity, or gone to a sporting or cultural event, you may have been touched by the Ukrop family.

They sit on boards and support countless nonprofits, community groups, education, events and sporting activities.

This year, Ukrop's and First Market sponsored a stage at the multiday Folk Festival. The fee for stages: $100,000.

"It's hard to find any significant level of community investment where you don't find their footprint," said James W. Dunn, vice president of advocacy and community affairs at Bon Secours Richmond Health System.

"It's almost like an A-to-Z phone list of all the things you can think of. There's hardly a letter where you can't find some level of support tracing back to the Ukrops," said Dunn, former president and CEO of the Greater Richmond Chamber.

The grocery chain or the brothers personally have donated tens of millions of dollars to various causes and organizations in the past two decades.

The chain normally gives at least 10 percent of its pre-tax profits. During one period, it gave about 30 percent of pre-tax profits, the brothers said.

Some details:

• From 1990 to 2007, the chain said, it contributed more than $30 million through annual campaigns, capital gifts, sponsorships, donations and product discounts to nonprofit organizations.

• Since creating its Golden Gift program in 1987, the grocery chain has distributed more than $12.4 million to thousands of charitable and nonprofit organizations based on customers' designations.

• For the 12 months ending June 2008, the Ukrop Foundation contributed nearly $1.6 million to numerous causes, from arts and culture to affordable housing and sports programming, according to papers filed with the Internal Revenue Service.

The University of Richmond has been a big recipient of donations from the chain and alumnus Bobby, who served two terms on the university's board of trustees.

In recent years, Jim has focused much of his time and effort as chairman of the CenterStage Foundation, the performing-arts venue in downtown Richmond that opened in September after years of delays and disagreements over vision.

"Richmond CenterStage is due, in large part, to Jim Ukrop" because of his leadership, Armstrong said.

. . .

The giving by the family and their companies is more than just financial.

For instance, during the five years that Keith Martin has headed the Richmond Ballet, Jim has donated storage space and transportation for its programming.

"It's the intangibles to me that are priceless," Martin said, adding that the family's contributions cumulatively are well into six figures. "The Ukrop family lends their time and facilities to nearly every philanthropic group in central Virginia."

Jim has participated actively in recruiting teachers for the Richmond Public Schools. He and other local officials persuaded companies to donate the use of corporate jets to fly business leaders and school officials to teacher job fairs across the country.

The chain also has helped countless farmers and producers in the state by opening doors to its stores for their products, said Todd P. Haymore, commissioner of the Virginia Department of Agriculture and Consumer Services.

"They are very good about making space for state farmers and business owners to sell their wares," he said.

The brothers also work to help bring new businesses to the area, said Gregory H. Wingfield, president and CEO of the Greater Richmond Partnership.

They "meet with prospects, giving them the lay of the land. They have a lot of credibility," Wingfield said.

"The Ukrop company really sort of set the standards for the business climate in Richmond in many ways," said William J. Martin, director of the Valentine Richmond History Center. "It set the standards for corporate philanthropy. It set the standards for customer service. It set the standards for employee development."

Also, many a teenager has held their first job at Ukrop's.

"That's a community service, too," said David Urban, a marketing professor and the interim dean at Virginia Commonwealth University's School of Business. "Ukrop's has been a first stop for many kids on their way to creating a career."

. . .

The brothers say their leadership style comes from their upbringing, their parents and religion.

"We grew up in a family with parents involved in the church, and we were taught to serve and treat people by following the Golden Rule," said Bobby, 62, who teaches a fifth-grade Sunday school class at Second Baptist Church in Henrico County.

Their parents opened the first store in South Richmond in 1937. The chain now has 26 supermarkets in the Richmond area, Williamsburg and Fredericksburg. The company has closed three stores since early 2008.

"To those who are given, much is expected," Jim said about the giving of his time and money.

"Both Bobby and our families -- we are all put here to try to make a difference while we are here," he said. "I think you have to, whether it alienates some people or not everyone agrees. I think we have been chosen to not only run our businesses but also to be part of whatever we can do to build a better community."

Jon Lugbill, executive director of Metropolitan Richmond Sports Backers, a group Bobby co-founded and remains on its board, said the family gives so much because it feels a sense of responsibility to the community. Bobby, a sports enthusiast, played basketball and was on the golf team at the University of Richmond.

"He walks into a meeting and says, 'This is not about us, it's about helping the community,'" Lugbill said.

And the family's business dealings have become something of a classroom lesson.

Thomas Shields talks about the Ukrop form of leadership with his master's of business administration courses at the University of Richmond's Jepson School of Leadership Studies.

The Ukrops, he said, are classic examples of servant leadership, which espouses that companies can serve and prosper.

"Their company is a for-profit company, but theirs also is a service unto others," said Shields, director of UR's Center for Leadership in Education.

. . .

Yet the family is not without its detractors, the brothers admit.

"As long as you feel you have done things that you think are right, you can sleep pretty well at night. What is right for me may not be right for somebody else," Jim said.

Raymond H. Boone, founder, publisher and editor of the weekly Richmond Free Press, has been a longtime critic of the Ukrop family and their grocery chain on his editorial pages.

Reached by phone last week, Boone said he stood by what he'd written but would not comment further.

In an April 2008 editorial titled "The real Ukrops," Boone took the family to task for closing its only city store -- at West Grace and North Harrison streets near the VCU campus. The chain said at the time it closed the store because of poor sales.

"The chain's closing decision also raises questions about the level of the company's civic virtue," he wrote. "The brothers' shut-it-down decision fails to give convincing evidence that the Ukrops are truly concerned -- as they have professed -- about doing their part to build a better Richmond -- unless they can pull in a profit from each and every venture."

One incident the brothers can't seem to escape is the 1996 effort they led to take radio disc jockey Howard Stern off local airwaves.

"The Howard Stern thing created more enemies in the community for us," Jim said.

Jim said the run-in with Stern began when he tuned in while driving early one morning and was appalled by a story the "shock jock" told.

In a letter to the station's advertisers, the brothers wrote "your advertising dollars to WVGO are condoning and contributing to the erosion of values and quality of life."

They urged local businessmen to boycott Stern and the alternative-rock station. The letter was meant to be private, they said.

Stern took them to task on the air. "You took a tiger on by its tail and, trust me, I'm not going to sit back and take this [expletive deleted]. . . . Just make sure your stores are clean because I'll be watching you," Stern said then.

The brothers admit the boycott campaign ruffled a lot of feathers and in hindsight wasn't worth the fight.

"You get a lot of folks who say, 'Who are these Ukrops who think they can dictate their morals and beliefs on the rest of the community?' That is something that has created a lot of animosity from a lot of younger-generation people," Jim said.

The Howard Stern campaign, along with the chain's long-standing policy of closing on Sundays and not selling beer and wine, also rub some folks the wrong way. Both policies come from the family's Southern Baptist roots.

"If you think about this, we are in the customer-service business -- and we are closed on Sundays and don't sell beer and wine," Jim said. "We are telling people when they can shop and what they can buy. That sort of feeds some of the animosity out there."

They bristle when asked if they indeed are trying to tell customers how to live their lives. "No. Absolutely not," Bobby said.

Feeding that animosity is the fact that Jim drinks alcohol. Bobby does not.

"People see me at an event having a glass of wine, and I know what is going through their minds -- 'how hypocritical that he does not sell [beer and wine] in his stores, but he's out here having a glass of wine.' That has always bothered me for years," Jim said.

While the company has a stand on alcohol, it does sell cigarettes, and one of its affiliate companies, Ukrop's Dress Express, offers wine for sale on its Web site.

. . .

Over the years, the family has had its share of disputes.

Jim and the CenterStage committee tussled with then-Richmond Mayor L. Douglas Wilder, a former Virginia governor, over the scope and size of the performing-arts center while still in the planning stages.

In 2005, Wilder declared Jim doesn't "own" him and will not "buy" him. Wilder could not be reached for comment.

Tensions also rose earlier this decade with Jim and Jonathan F. "Johnny" Johnson, owner of the now-defunct Community Pride chain of inner-city supermarkets.

Community Pride got its start in March 1992 with the Ukrop family foundation putting up $700,000 in funding.

Johnson had ambitious growth plans; Jim thought he was expanding too fast, court testimony shows.

Community Pride closed its last stores in 2004. A few months later, Johnson sued grocery wholesale distributor Supervalu Inc. for allegedly crushing his business.

During the trial in 2007, Jim was called to testify against Johnson.

"It put a strain on our relationship, but we have rebounded," Johnson said last week. "We still have deep, deep feelings for each other. What I like about [the family] most is it's really sincere. They really mean well when they go to help someone."

. . .

The pending merger of First Market Bank with Bowling Green-based Union Bankshares has forced the family's business dealings to be much more public than in the past because of new banking regulations.

Earlier this year, the company refused to discuss reports from trade publications that it had put the grocery chain up for sale. But in a filing with the federal Securities and Exchange Commission, Union Bankshares warned investors of a possible sale of Ukrop's and that it has considered the potential impact in structuring its offer for First Market Bank.

The family's influence also has banking regulators on alert regarding the pending merger.

G. William Beale, Union Bankshares' president and CEO, said regulators are spending more time with this merger than the bankers anticipated because of the large ownership positions that the Ukrop family and the chain has in the privately owned First Market Bank.

Regulators are working with them and specialty insurer Markel Corp. -- which owns the rest of First Market -- so they understand that both will be unable to put any pressure on bank management because of their large stakes in the company, Beale said.

The Ukrops will have a 15.5 percent ownership, the largest, once the banks merge, followed by Markel, with a 13 percent stake.

Jim will keep an office at the bank's downtown headquarters and will remain on the new board. But he won't be chairman.

"I have never had control here. I have never been involved in the bank's day-to-day operations," he said. "My influence was my presence. I have been an ambassador of the bank."

. . .

Sitting in a small conference room at First Market's Shockoe Slip headquarters, the brothers were visibly uncomfortable talking about their influence and impact.

They repeatedly pointed out that others in the community give as much, if not more, and that if it wasn't for their name on the front of their stores, their giving would go under the radar, which is how they'd prefer it.

Talking to them, you get the sense that while having the Ukrop name has given them and their families unimaginable opportunities, it's also a burden.

"Sometimes you wish your name was Smith," Bobby said.

What wears on them is not the responsibility they feel toward their community, which they embrace, it's the public scrutiny.

Several times during the interview, Bobby rubbed his eyes with both hands, his discomfort palpable. Jim was quick to shift any credit either to his brother or others in the community.

"Sometimes people think we are influence or power, but to me those words are troublesome," Jim said.

And his response to criticism: "Would the community be better off if I just went fishing?"

Contact Emily C. Dooley at (804) 649-6016 or edooley@timesdispatch.com.

Contact Louis Llovio at (804) 649-6348 or LLLovio@timesdispatch.com.

Contact Gregory J. Gilligan at (804) 649-6379 or ggilligan@timesdispatch.com.

Staff writer Carol Hazard contributed to this report.