Passion for business drives Berg's politicsFARGO — One year before Rick Berg jumped into the world of business, he jumped out of an airplane — and broke his leg.
By: Mike Nowatzki, Forum Communications
FARGO — One year before Rick Berg jumped into the world of business, he jumped out of an airplane — and broke his leg.
The year was 1980, and Berg was a college junior taking a one-credit skydiving class at North Dakota State University. He and three fellow first-timers made the leap.
It would be Berg’s last.
“After that, I decided if I was going up in a plane again, I wanted to know how to land it,” said Berg, who earned his pilot’s license four years later.
His senior year also ended with a leap of sorts.
Again, it resulted from a one-credit class, this time a business course that exposed students to careers outside of agriculture — a field that, up until then, Berg fully intended to pursue with his degree in agricultural economics and communications.
The class hosted a guest speaker, Jim Wieland, who with his business partner, Ken Regan, had just launched a real estate investment and property management business.
Berg approached Wieland after the class and expressed interest in joining the business.
“He said, ‘Well, I’ll work for nothing,’ and I thought that was pretty interesting,” Wieland recalled.
More than 30 years later, Berg is one of the wealthiest members of Congress, landing at No. 13 on last year’s Roll Call rankings with an estimated minimum worth of $21.6 million.
His business record — specifically his ties to Fargo-based Goldmark Property Management in which he insists he’s never been involved — has become a focal point of campaign attacks by Democrats, including U.S. Senate race opponent Heidi Heitkamp.
While calling those attacks “very, very frustrating,” Berg doesn’t disown his business past, and in fact acknowledges that his passion for business drove his decision to enter politics as a 24-year-old who successfully ran for the state Legislature in 1984.
“I thought that there were so many people that were 55 and 60 years old in the Legislature that we needed a mix of our population, and that we needed younger people who were out to build their business career, out at the start of their career,” he said. “And so we had laws and legislation that encouraged that, and not just people at the other end of their career, as we set laws.”
Change of direction
In a way, Berg followed in his father’s footsteps when his career path changed just before he graduated from NDSU.
His grandfather, frustrated with the lack of available farmland in Norway, immigrated and homesteaded in the Maddock area in central North Dakota. He was proud to have created opportunity for his two sons to farm.
But Berg’s late father, Bert, didn’t want to farm, though he did so for nine years until Berg’s mother successfully prodded him to reapply to veterinary school. He was accepted to the University of Minnesota and uprooted the family to the Twin Cities, where Berg attended kindergarten and first grade.
“That was a pretty big transition for our family,” he said.
After earning his degree, Berg’s father went to work for a veterinarian in Hettinger in southwestern North Dakota, eventually buying into the clinic.
Berg worked for his dad in high school, helping him treat cattle and deliver calves by Caesarean section. He also spent two summers custom harvesting and was active in 4-H and Future Farmers of America.
After high school, Berg continued on the agricultural track, pursuing ag business at the North Dakota State College of Science in Wahpeton on a wrestling scholarship. For money, he delivered pizza for Pizza Hut.
At NDSU, Berg chose ag econ as his major and ran for the student senate, representing the ag college for three years.
Then came the life-changing conversation with Wieland in 1981. Berg already had a good job offer with an agrichemical company, and Wieland didn’t think he could afford Berg.
“So, I made him an offer that I was sure he’d say no to. I offered him — I remember this specifically — 700 bucks a month and he had to pay all his own expenses,” Wieland said. “And I was sure there was no way he’d take that job, and he took it.
“I realized then that he knew what he wanted to do, and money wasn’t going to be the thing to keep him from what he wanted to do.”
Berg called his parents to break the news.
“I told them that I had this good job offer, and I called them and told them I was not going to take it because I wanted to start my own business,” he said. “They probably thought I was crazy, but they were just supportive the whole way.”
Risky start, fast rise
Instead of managing crops and livestock or farm finances, Berg began managing apartment buildings. He joined Midwest Management Co. and also was an agent with Regan Wieland & Co., a Midwest affiliate.
Commercial real estate was a risky venture at the time, with interest rates skyrocketing. While Regan and Wieland had borrowed $15,000 to launch the business, Berg said that for himself, as a college senior with a used car and student loan, “there’s not much of a risk.”
“It wasn’t like I went out and started my own business totally on my own,” he said. “We had a good, good group, and my focus was to take care of the property.”
Midwest built one apartment in its first year. By the time accountant Dale Lian joined the partnership the following year, Midwest was up to managing 300 units.
In the beginning, Berg’s main role with the company was renting out units, Wieland said. Berg became a minor owner and ended up running the management company in the early 1980s.
By the time Berg sold his minor share and went into the newly created commercial sales and leasing division, Midwest was managing 3,000 apartment units in North Dakota, South Dakota and Minnesota.
A Forum article on Dec. 26, 1987, announced the new division: “A commercial management and leasing division has been formed by Regan Wieland Investment Co. and Midwest Management Inc. in Fargo with Richard A. Berg and James J. Schmith in charge. They will specialize in the leasing and management of retail, office and warehouse space.”
Midwest Management was renamed Goldmark Property Management in 1994. Two years later, Berg — along with Lian, Regan and Wieland — founded Goldmark Commercial Corp., now known as Goldmark Schlossman Commercial Real Estate.
Berg said his passion for working with businesses led him to leave the apartment rental side of the company.
“For that 26-year period … for me it was about really understanding the needs of small business and helping them,” he said.
One example was PRACS, a drug-testing company established in 1983 that now operates a massive research center in southwest Fargo. When the firm was first starting out, it needed a place for people to spend the weekend for testing.
“And so we built a building kind of just for them to help them with that,” Berg said, referring to the building at 2602 12th St. N. now occupied by the Red Cross. “And that was part of what catapulted them forward.”
Berg said the first lesson he learned in small business is that cash flow is important, a lesson he applied to his years in the state Legislature. He believes those years created the stability in state government that helped set the stage for North Dakota’s current economic success.
“You have to live within your means. And also that there’s good spending and there’s spending that’s not necessary,” he said.
Berg said the high points of his business career were seeing small businesses expand and new businesses move into North Dakota with Goldmark’s help.
“For us, having a growing economy was a critical component,” he said.
A ‘very good salesman’
During the 25 years Berg was involved with his partners in commercial brokerage, they sold several hundred million dollars’ worth of property, said Wieland, who remains a partner in Goldmark Schlossman with Regan, Lian and a few others. Berg sold his ownership in the company last year.
“Rick was a very, very good salesman, and I like to think I was too,” Wieland said. “We sold a lot of property over time.”
Some investors who bought property from them hired their own management, but others were turned over to Goldmark Property Management, Wieland said. That’s where Berg’s involvement in the transaction ended, he said.
“He’s a sales guy, you know, and sales guys aren’t good managers,” Wieland said.
“That’s what’s so sad about this,” Wieland added, referring to the campaign ads trying to link Berg to tenant complaints filed against Goldmark Property Management. “He really, truly had nothing to do with property management after 1986.”
However, as has been widely reported, Berg has acted as a spokesman for Goldmark Property Management, notably in 2003 when master keys for its properties were stolen.
Wieland, who with Regan and Lian remains a partner in Goldmark Property Management, explained: “No one else was around and (Berg) was more adept at handling the press, and so we asked him to do that, and that’s really what happened.”
Berg has stressed that he has no legal ties to or financial stake in Goldmark Property Management, and said again last week, “I haven’t been involved in that company really ever.”
“So, you know, I don’t deserve credit for their growth over the last 26 years, but what Heidi Heitkamp’s doing, she’s not attacking the company that I’ve been involved with. She’s attacking this other company,” he said. “And you know, it’s really, for the employees and owners of that company, it kind of demonizes and discredits the work that they’ve done just to get at me to personally attack me. I mean, it’s false, it’s wrong … it’s just very, very frustrating.”
Contacted for a response, Heitkamp campaign spokesman Brandon Lorenz rattled off a list of hammering points regarding connections between Berg and Goldmark Property Management. Lorenz called Berg’s record as a lawmaker one of self-interest in which he voted in ways that would benefit his corporate interests.
“Congressman Berg has indicated that his business record is one of the reasons that he is running. He wants it both ways. He wants to embrace his business record when he thinks he can take credit for something good and run away from it when some of the other more unfortunate aspects come to light,” Lorenz said.