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Up and Down in Beverly Hills
Franz Lidz
April 17, 2000
Eccentric multimillionaire Donald Sterling has been a flaming success as an L.A. real estate mogul and a dismal failure as the owner of the Clippers
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April 17, 2000

Up And Down In Beverly Hills

Eccentric multimillionaire Donald Sterling has been a flaming success as an L.A. real estate mogul and a dismal failure as the owner of the Clippers

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Sterling said he would mull it over and call her the following week. He never did Nor did he send over the season passes. "I decided against calling Donald back," says McCoy-Murray. "I wasn't going to go chasing after the almighty dollar. I feel bad for the [ Clippers] organization. I think everybody in L.A. does."

Selsman thinks that Sterling's retentive streak is rooted in the poverty of his youth. "As a kid, Donald never had enough of anything," says Selsman. "With him, acquiring great wealth is a crusade. He's psychologically predisposed to hoarding."

Born Donald Tokowitz, Sterling is the only son of an immigrant produce peddler. When Donald was two, he and his parents, Mickey and Susan, left Chicago for Boyle Heights, then a poor Jewish enclave in East L.A. Every day at 2 a.m., Mickey would go to a farmer's market to buy vegetables wholesale and truck them to restaurants. Young Donald worked as a grocery-store box boy, investing his meager wages in toy soldiers and comic books. His mother wasn't impressed. Unlike property, she reasoned, education can never be taken away. "You will go to college!" she would tell her boy, pounding her fist on the dinner table. "You will be a professional. You will be a lawyer."

The ever-dutiful Donald obeyed Mom's will. In his senior year at Roosevelt High he was elected class president and went to the city finals as a gymnast. "My brother was very popular," says Lynn Lewis. "He could win you over any way he wanted." He went to the people's colleges—Cal State L.A. and Southwestern University School of Law, graduating from the latter cum laude in 1961, at age 23. To help pay his way through, he moonlighted as a salesman at a furniture store. It was then that he changed his name to Sterling. "I asked him why," a fellow salesman told Los Angeles magazine in 1999. "He said, 'You have to name yourself after something that's really good, that people have confidence in. People want to know that you're the best.' " Sterling made Tokowitz his middle name and Shelly, the boss's daughter, his wife. The couple, who are still married, would raise three children.

Sterling did not ascend unfettered in the legal profession. Back then big L.A. law firms rarely hired Jews, especially penniless ones with degrees from Southwestern. So Sterling hung out a shingle in Boyle Heights and became a tireless advocate for his old neighbors, handling everything from divorces to personal injury cases. Ten thousand cases by his count. He was so successful that within a couple of years he shifted his shingle to Beverly Hills.

At the precocious age of 27, Sterling represented Selsman in a headline-grabbing divorce from actress Carol Lynley. "Donald took on the top legal talent at the Music Corporation of America," says Selsman, "and wouldn't back down." (Selsman and Lynley wound up splitting their assets equally.) Bigger clients and bigger judgments followed, and soon Sterling had parlayed his fees into a handsome real estate portfolio. He made his bundle in two ways: gradually and then suddenly. Eschewing brokers, he stuck to a few affluent areas, invested when the market was soft, refinanced as the properties appreciated, and reinvested. He got tax breaks for reinvesting and reduced his capital gains taxes and transaction fees by never selling. His simple credo: Buy it, improve it, keep it forever.

Improving it—at least cosmetically—allowed Sterling to jack up the lease. In 1986 he hiked rents on his Beverly Hills properties so dramatically that outraged tenants marched on City Hall. "These days Sterling keeps up his buildings, but it's almost impossible to get a security deposit back," says tenant-rights activist Herm Shultz. "He was a very cunning and ruthless business-person, and he hasn't changed his stripes any. We're talking about the Humanitarian of the Year."

As a tenant, Sterling is just as cunning. He doesn't own the land on which Sterling Plaza stands; rather, he has a 99-year lease with the Mayer estate that requires him to pay a relatively small annual fee and 15% of any rental income. But he won't rent to anyone. With no other tenant, the Mayer estate faces another 75 years with virtually no income from its Sterling Plaza property. By sitting and waiting, Sterling may force a fire sale.

Twenty years ago Sterling bought 11 Santa Monica apartment complexes from real estate magnate Jerry Buss, who used the money to buy the Lakers. Buss pitched pro basketball as the great investment of the '80s and encouraged Sterling to go after the Clippers, a full-court mess entropying in San Diego. The asking price was $13.5 million, but Sterling got the team on a layaway plan by assuming nearly $10 million in debts and deferred compensation. Sterling tried to remake the Clippers in his own image, plastering pictures of himself on billboards all over town. "It's the start of a new era!" he promised in an open letter to fans. "I'm in San Diego to stay and committed to making the city proud of the Clippers. I'll build the Clippers through the draft, free agency, trades, spending whatever it takes to make a winner."

Fans started wondering about Sterling's new era at his first home opener, in 1981. The Clippers won the game, but Sterling outperformed his players. He cheered wildly from his courtside seat, his shirt unbuttoned to the waist. As the game ended, he sprinted across the floor with his wine glass in hand and jumped into the arms of coach Silas. Then he high-fived his players, telling each, "I love you." During that '81-82 season, as the Clippers went 17-65, Sterling's antics were more entertaining than those of his woebegone team. Silas returned from a goodwill trip to China in the summer of '82 to find his files stacked up in the hallway outside his office. Sitting at the coach's desk was Sterling's close friend Patricia Simmons. The former model had been appointed assistant general manager, though the Clippers say she had no basketball duties.

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