Stan McCammon Borrows from Warren Buffett’s Playbook to Keep Joshua Green’s Legacy Alive in Seattle

Seattle businessman Joshua Green did a lot of things right when he built his fortune during the Gold Rush era. The shipping fleet he created was the precursor to the Washington State Ferries system. The insurance company he started became Safeco Corporation.
Particularly canny was the Seattle pioneer’s decision not to let his progeny break up the family empire. Instead, Green put his considerable wealth into a corporation with the family as shareholders. That decision has benefited not only his descendants but also a collection of Northwest businesses that have access to the capital Joshua Green Corporation (JGC) has patiently amassed over the long term.
By pooling his fortune into a single investment vehicle, the one-time steamboat purser made it possible for heirs to invest in diverse assets that are now worth “well north of one billion dollars,” in the estimation of JGC’s CEO, Stanley B. McCammon.
McCammon, who is not a member of the family, joined Joshua Green in 2005. He took a portfolio of assets that had been passively invested up to that time and revamped the investment approach into one not unlike that championed by Warren Buffett. “We’re a mini-Berkshire Hathaway,” says McCammon. “As long as there’s a symmetry of view of the overarching objective, we have a pool of funds that creates greater, better opportunities.”
McCammon adds, “We invest for the long term with the object of growing our assets based on real returns — after inflation — while at the same time growing distributions with some degree of predictability.”
The family, led by Joshua “Jay” Green III, remains intimately involved. An elected family council meets six times a year to deal with family issues, and the 91 descendants of Joshua Green meet annually to review the family company’s progress toward its goals.
Unlike a traditional family office, JGC does not assist family members with their personal interests. Family members instead engage their own financial advisers, CPAs, tax consultants and trip planners.
JGC operates under the direction of a 10-person board of directors consisting of McCammon, the family council president, three other family members and five independent directors who oversee the corporation’s investments on the family’s behalf.
The family’s philanthropy is handled by the Joshua Green Foundation, which supports local educational, cultural and arts organizations, and social services.
McCammon says the family gives him considerable autonomy in making investment decisions. A former tax attorney at the Seattle law firm Davis Wright Tremaine, McCammon has deep experience in wealth management and equity investment. He bought his first stock when he was in the eighth grade. Prior to joining JGC, he managed the family office of John McCaw Jr., a one-time part owner of McCaw Cellular. McCammon also was a cofounder and managing director of Orca Bay Partners and the Tahoma Fund.
For a family to retain its fortune for more than a century is rare. Most wealthy families — seven in 10 — lose their fortunes within three generations, according to The Williams Group, a family wealth consultant in San Clemente, California. Joshua Green’s family is now entering its sixth generation.
Most of the Green family’s money is invested in the publicly traded debt and equity markets, with roughly 25 percent invested in private companies and about 15 percent in real estate.
JGC’s investments target local and regional firms with defensible positions in their sectors. These private companies range from a set of businesses that make fly-fishing gear to food manufacturers, a heavy equipment distributor and a producer of food and beverage containers.
“We’re interested in investing in companies we can own for an extended period of time,” McCammon explains.
Joshua Green has been involved in flyfishing gear since the early 1900s, when it invested in Far Bank Enterprises. Nearly a century later, soon after McCammon took charge, the company acquired Sage Manufacturing, a Bainbridge Island-based fly-fishing-equipment maker.
“We wanted to find an operating business the family could be emotionally invested in and have some familiarity with,” McCammon notes.
That purchase was followed by the acquisition of additional fly-fishing-equipment makers — Redington, also situated on Bainbridge Island, and Idaho-based Rio Products. All three fishing-related companies now operate as Far Bank subsidiaries. And all meet a key criterion for Joshua Green: defensibility. “Anglers know that it will be a high-quality product,” McCammon says, “that the company will stand behind it and that new products will be good.”
A JGC investment in Seattle-based Pacific Market International (PMI), which makes food and beverage containers under the Stanley, Aladdin and Migo brands, helped the company to expand rapidly into a global business that puts out some 100 new products a year and registers more than $120 million in annual revenues.
PMI founder and CEO Rob Harris was looking for a partner who cared about more than just a return on investment. He wanted an investor who supported his firm’s values, its people and its commitment to the community.
“Their time horizons are different,” Harris says of JGC. “They really are a long-term investor. They are not constantly agitating for quarterly returns. They are looking to build a great company.”
That realization came to the fore in 2012, when PMI had an off year, Harris says. The response from JGC, he explains, was, “So, financially it was a bad year, but we think it’s one of the better years in the company’s history. That’s because they recognized we were doing all these things to build the company for the long term.”
Another JGC investment, Portland-based Harry’s Fresh Foods, provides food products to grocery, club and food-service clients in 30 states. JGC acquired the firm in 2013 and made it part of JGC Foods, along with Cuizina Food Co., a Woodinville maker of all-natural frozen soups and sauces that it acquired in 2012.
Harry’s CEO Jamie Colbourne agreed to the deal because he liked Joshua Green’s investing strategy. “They had a strong balance sheet, the [same] value system I had and a very long-term view on the business,” Colbourne says.
With JGC’s backing, Harry’s recently opened a 200,000-square-foot production facility in Nashville to better serve customers in the East. Colbourne expects JGC’s longterm approach to its investments will also ease the transition when he retires.
McCammon says that while he will often acquire a company outright, he sometimes chooses to be a majority or minority investor or simply provide mezzanine financing, which gives the lender the rights to convert to an ownership or equity interest in the company in case of default, after venture capital companies and other senior lenders are paid. JGC provided mezzanine capital to Bellevue-based beverage distributor The Odom Corporation so it could obtain bank financing to acquire a portion of the business of Kent-based Alaska Distributors, McCammon says.
One thing McCammon won’t invest in is tech. While returns can be high, it requires a lot of prediction about proper timing and consumer behavior, he says.
JGC’s strategy of investing in strongly positioned Northwest companies follows the route the company’s founder took to create his fortune more than a century ago. Green parlayed a $1,250 loan into a fleet of steamboats that ferried passengers and goods around Puget Sound and carried prospectors to Alaska during the Klondike Gold Rush. Green bought and turned around a then struggling Peoples Savings Bank, growing it into a regional chain before selling to U.S. Bank.
In 1968, Green, whose family came to Seattle in 1886 when Joshua was 17, was recognized as Seattle’s “Man of the Century.” He died at the age of 105 seven years later.
Real estate has been part of JGC’s investing strategy since Green purchased his namesake building in downtown Seattle at the corner of Fourth Avenue and Pike Street. At one time, the firm’s portfolio also included six area shopping centers, but JGC lately has been selling off those retail properties. “We were competing for tenants against sophisticated professionals,” McCammon says. It recently sold Bridle Trails Shopping Center in Kirkland for $32 million, with only Island Village Shopping Center on Bainbridge Island remaining in its portfolio.
Instead, JGC recently took a big step into the Northwest office market through investment in two prominent estate companies. This foray into real estate was sparked by the firm’s decision in 2005 to renovate the iconic Joshua Green Building. McCammon felt the nearly century-old building was “not a fair reflection” on the family, so it teamed with Urban Renaissance Group (URG), a Seattle-based real estate services firm founded by Pat Callahan, who previously managed Equity Office Properties Trust’s 18 million-square-foot portfolio in Seattle, Bellevue, Portland and Denver.
The collaboration between JGC and Callahan’s firm on the $18 million renovation of the landmark Joshua Green Building and their collaboration on the purchase of the 20-story Plaza 600 building ultimately led to a partnership. “We’d been investing in real estate on an ad hoc basis,” McCammon says, “and we decided to invest instead in the business of real estate.”
In 2012, JGC merged its $150 million real estate portfolio into URG’s operating platform and invested $50 million in URG’s first investment fund to acquire a majority stake in the firm. In December 2014, URG acquired the Seattle developer Touchstone as a wholly owned subsidiary. It was a marriage of JGC’s financial capital and the intellectual capital provided by Callahan’s company and Touchstone, McCammon says.
Although real estate development is a risky business, McCammon was intrigued by Touchstone President and Chief Development Officer A-P Hurd’s trademark practicality.
When Hurd and her partner were deciding where to live, she created a matrix of the pros and cons for various cities to guide their decision.
“It was a very disciplined, analytical way to think about the future,” McCammon says. “It struck me this probably was very unusual for a developer.”
At the time of the transaction in 2014, Touchstone had more than 2 million square feet of office space in development and URG managed about 6 million square feet of office space in Seattle, Bellevue and Portland. Since then, URG has expanded into the Denver office market. Last summer, Touchstone was named national developer of the year by NAIOP, the commercial real estate development association.
JGC’s holdings (see list below) are an interesting mix encompassing a half-dozen industrial sectors. “Some see goofy little businesses,” McCammon says of JRG’s eclectic investment strategy. “I find them interesting in their own right.”
McCammon uses the term “innovative conservatism” to describe his approach. “We are not Amazon, Boeing or Google,” he reasons. “We are interested in providing jobs, enabling people to put food on their tables and give their kids the opportunity to go to school.”

Cuizina Food Company, Woodinville: Maker of all-natural soups and sauces.
Far Bank Enterprises, Bainbridge Island: Maker of Sage, Redington and Rio fly-fishing products.
Harry’s Fresh Foods, Portland: Maker of soups, entrées, sauces and desserts.
Metropolitan Market, Seattle: Operator of supermarkets in Seattle, Tacoma and Kirkland.
The Odom Corporation, Bellevue: Pacific Northwest beverage distributor (no longer own).
Pacific Market International, Seattle: Designer and maker of Stanley, Aladdin and Migo beverage and food containers.
PacWest Machinery, Seattle: Provider of sales, rental, service and aftermarket parts for Volvo construction equipment in Washington, Oregon and northern Idaho.
PlayNetwork, Redmond: Creator of custom digital music and sound systems.
Urban Renaissance Group/Touchstone, Seattle: Commercial real estate manager and developer.

Seattle Business Magazine | February 2017 | by Jeanne Lang Jones

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