Dole billionaire Murdock funds food agenda as income slows
Monday, 3 September 2007
Seth Lubove
David Murdock is annoyed. The mayor of Westlake Village, California, site of Murdock's new 270-room Four Seasons hotel and health spa, and headquarters of his $6 billion Dole Food Co., has just finished speaking for almost two hours.
Murdock, proprietor of one of the U.S.'s biggest private corporate empires, is impatient to get back to business. At 84 years old, he usually doesn't allow anyone to waste his time. ``Two hours, can you believe it,'' he says, shaking his head in disbelief.
The occasion of the mayor's speech last December was to help celebrate the opening of Murdock's California WellBeing Institute, a product of his late-in-life conversion to healthy living. And the institute is just a curtain raiser to a much grander Murdock health-focused project: the 350-acre, $1.25 billion North Carolina Research Campus rising from the ruins of shuttered textile mills in Kannapolis, North Carolina, that Murdock once owned.
The research campus is being built by real estate giant Castle & Cooke Inc., the other pillar of Murdock's vast domain. Three North Carolina public universities, plus private Duke University, have signed on to do food-related research there.
Murdock has been preaching the benefits of a low-fat diet with lots of fruit and vegetables for decades -- he's 5 feet 8 inches and 150 pounds himself. ``I think it's pretty obvious that people are overweight,'' says Murdock, whose personal fortune is valued by the Los Angeles Business Journal at $4.5 billion. ``All you have to do is walk around any shopping center to see something is wrong in America.''
Murdock has used his ownership of Dole to pursue his passion for improving America's diet. The company, once best known for growing pineapples in Hawaii, now sells a variety of fruit and vegetables -- including bananas, broccoli, prunes and Tibetan goji berries -- that Murdock considers particularly healthful. The billionaire has also spent millions of dollars producing books and pamphlets on nutrition.
Bond investors may wish Murdock would spend less time on his health crusade and more improving Dole's bottom line. Last year, the company lost $89 million on $6.2 billion in sales. The assessment of its $2.4 billion in bonds and bank debt by Fitch Ratings ranges from ``speculative'' to ``high-default risk.''
The company is fending off lawsuits accusing it of selling spinach last year that was contaminated by the E. coli virus. Dole blames the contamination on the packager of the spinach.
The European Commission in July accused the company of conspiring with rivals to fix prices on banana imports, which Dole denies. And the company has been defending itself since July in a Los Angeles Superior Court civil trial against allegations by 12 Nicaraguan banana workers that Dole poisoned them with pesticides, which the company also denies.
Fitch Ratings analyst Carla Norfleet Taylor says Dole's poor ratings reflect its large debt load and flagging profits. ``Commodity costs in terms of fuel, packaging and production are way up,'' Taylor says. ``Most of the issues they're going through are out of their control.''
Murdock's North Carolina Research Campus is controversial too. The local city and county governments have agreed to underwrite $168 million in water and sewer connections and other improvements to the property. John Day, manager of Cabarrus County, where the facility is located, says the research campus is a profit-making enterprise and doesn't deserve government help.
``Normally, if someone is developing a research park, all the infrastructure improvements are typically paid for by the developer,'' he says. ``It would make this the largest incentive provided by a local government in North Carolina history.''
Murdock's California and North Carolina health projects -- and even Dole itself -- are a sideline to the ninth-grade dropout's main career: real estate development. Murdock acquired the food company as part of Honolulu-based developer Castle & Cooke, which he bought in 1985 from public shareholders.
He split Castle & Cooke and Dole into separate publicly listed corporations in 1995, then took both private -- Castle & Cooke in 2000 and Dole in 2003. Today, through Castle & Cooke, he lords over a sprawling portfolio that includes housing developments, hotels, golf courses, offices and brick makers in 23 states.
Murdock's new Westlake Village Four Seasons hotel and resort is his third; the others are on the Hawaiian island of Lanai. He owns all except 2 percent of the 90,500-acre (36,600- hectare) island.
Murdock keeps a close watch on all of his far-flung real estate, racking up some 200,000 miles (322,000 kilometers) a year on his Bombardier Global Express corporate jet. Among his staff he is known for his attention to every
Managers on the entrepreneur's building sites have dubbed his favorite wall covering ``Murdock yellow,'' says Heidi Geier, executive vice president of the WellBeing Institute. She says Murdock also ordered boulders hauled over from Thailand's River Kwai to be built into the man-made waterfall in the garden behind the Four Seasons.
Still, Murdock says he finds time every day to think about health. And anyone who spends even an hour with him is treated to a series of pronouncements on the state of the nation.
-- He believes people who are overweight lack the willpower, even the intelligence, to stay slim. ``I have self- control,'' he says. ``Most people who gain weight have little or no self-control.''
-- Vitamin supplements are unnecessary, he says, because most nutrients can be found in fruit and vegetables. ``You don't need vitamins; some aren't even good for you,'' he lectures. ``I've never taken a pill of any kind except aspirin.'' He says he's never been sick.
-- Murdock says there's no such thing as stress. ``I don't recognize too much of the stress theory. Stress is a figment of people's imagination.''
-- An unhealthy diet, he believes, wreaks havoc with the body's basic chemistry. One of the tests given at the WellBeing Institute purports to measure the ``connection between your lifestyle habits and the rate of your DNA damage.''
Murdock's personal beliefs aren't always reflected in the way he runs his businesses. The managers of Murdock's WellBeing Institute, opened last November, would be happy to sell you a four-day, $2,910, ``stress management package.''
The rest of the institute's program is more in tune with Murdock's tenets. It emphasizes weight loss, healthy eating and comprehensive physical exams. Enrollees fill out a seven-page questionnaire called a LifeQuality Profile. Sample questions: ``How often do negative thoughts, such as judgmental voices, keep you awake?''; ``How many times per week do you eat brightly colored fruits and vegetables?''
The WellBeing Institute's medical program was designed by Andrew Conrad. An entrepreneur like Murdock, Conrad sold the medical testing company he co-founded to Laboratory Corp. of America in 2000 for $56 million. He spent some of the money on one of the few private houses on Lanai Island and struck up a friendship with the Dole owner.
Now Conrad, 43, who has a Ph.D. in cell biology from the University of California, Los Angeles, is overseeing the scientific portion of Murdock's new ventures. In a tour of the medical section of the institute, he shows off its state-of-the- art equipment, including a 3-D scanner and a Bod Pod that measures body fat. Conrad says much of the regimen at the institute is based on accepted medical practice. ``It's not like we're a bunch of granola-eating hippie dudes,'' he says.
The therapeutic strategies at the Four Seasons-based facility don't come cheap. A so-called ``ultimate'' health package, including a full physical by a staff physician, consultation with ``inner living'' experts and the intervention of a ``LifeAdvisor,'' runs $4,200 before hotel charges. (Weekday Four Seasons room rates start at $295.) An annual ``platinum membership'' in the institute, including periodic physicals and blood and cholesterol screenings, runs $15,000.
David Murdock was born in Kansas City, Missouri, the son of a traveling salesman. He says he soured on formal education at an early age. ``I got bored,'' he says. ``I always wanted to do something. If you can conceive it, you can do it.''
After he dropped out of school, he went to work at a gas station. He did a stint as a gunnery instructor in the army during World War II and ended up in Detroit, where he bought and then sold a small restaurant. In 1946, he migrated to Phoenix, which was just emerging as a boomtown, and started building houses. By 1950, he had graduated to shopping centers and small office buildings.
Murdock popped up on the national radar in 1964, when Time magazine noted his development of the first ``financial shopping center'' in the U.S., an office park that included a bank, a savings and loan, an insurance agency and a stockbroker, all tied together by a new, room-size UNIVAC 1107 computer.
The same year the Time story appeared, Murdock's Financial Corp. of Arizona, which built the shopping plaza, collapsed as a result of a real estate bust.
After paying off his debts, Murdock says he took the $1 million he had left and in 1966 headed west to California. He never considered becoming anyone's wage slave. ``I've never worked for anyone in my life,'' Murdock says. ``I don't know what it is to have someone tell me what to do.''
In his new L.A.-based business, Murdock didn't produce houses, just the stuff they are made of. He bought a collection of building materials companies, including, in 1969, Yankee Hill Brick & Tile of Lincoln, Nebraska, and, in 1973, Pacific Clay Products of Lake Elsinore, California. He still owns both companies.
By the 1980s, Murdock was flush enough to go back into real estate. After acquiring Castle & Cooke in 1985, he consolidated most of his companies under that name.
Nineteen eighty-five was also a watershed year for another reason: His second wife, Gabriele, died of cancer at 43. While she was ill, Murdock plunged into the available literature on cancer and came to the conclusion that he had just bought the cure for what killed his wife -- Dole. ``If I knew then what I know now, I could have saved her life,'' he says. ``It made me aware that if you eat properly and exercise, you can avoid most diseases.''
Murdock has been a man on a mission ever since, proselytizing to anyone who will listen about the life-saving benefits of a diet rich in fruit and vegetables. (He's what he calls a ``fish vegetarian'' himself.) At Murdock's behest, Dole in 2002 published a 500-page tome, ``Encyclopedia of Foods,'' which the company sells through the Dole Nutrition Institute, a company-financed publisher that cranks out pamphlets, cookbooks and other literature extolling the virtues of healthy eating.
In North Carolina, the exact nature of the Dole-sponsored studies that the new research campus will undertake hasn't been decided. Preliminary literature for the planned David H. Murdock Research Institute says only that it will be ``dedicated to scientific research on nutrition, fruits and vegetables.''
New York University nutrition professor and food industry critic Marion Nestle says consumers should be wary of any research sponsored by a food company. She cites a January analysis by Children's Hospital Boston and Harvard Medical School that found beverage nutrition studies funded by the drinks industry were four to eight times more likely to have conclusions favorable to the sponsors' financial interest than studies with no industry funding.
``The whole thing makes me squirm because there's so much evidence that funded research gives you answers that are favorable to the company that gave sponsorship,'' says Nestle, author of ``Food Politics: How the Food Industry Influences Nutrition and Health'' and ``What to Eat,'' among other books. ``This kind of thing is about marketing, not health.'' Dole responds that the findings of its research will ``under no condition be altered from the scientific facts.''
Nestle also served on the data and safety monitoring committee of a study on cancer conducted by researchers at the University of California, San Diego, and published on July 18 in the Journal of the American Medical Association. The paper finds that eating more fruit, vegetables and fiber than the five servings a day recommended by the U.S. government doesn't cut the risk that breast cancer will recur. ``It's disappointing,'' Nestle says. ``It didn't make any difference whether there was more healthy eating.''
Murdock's nutrition fixation has prompted him to reposition Dole to take advantage of consumers' willingness to pay more to eat healthy. Since 1995, he's shifted the company away from bulk sales of fruit and vegetables and toward what Dole refers to as ``value-added products'' such as bagged salads, precut vegetables and packaged fruit cups.
The company now has a 51 percent market share of the ``fruit bowls'' category, according to Information Resources Inc., a Chicago-based market research firm, and is No. 1 or 2 in most of its other major product categories. Its chief competitors are Cincinnati-based Chiquita Brands International Inc. and San Francisco-based Del Monte Foods Co.
Dole has benefited from some Americans' determination to eat green. Total wholesale fresh produce sales in the U.S. passed $97 billion in 2005, up from $35 billion in 1987, according to Dole's estimates, while the U.S. Department of Agriculture says Americans consumed 45 pounds more fruit and vegetables per capita in 2004 than they did in 1987.
The U.S.'s salad days haven't helped nourish Dole's bottom line. Although sales were up 6 percent to $6.2 billion in 2006, a $30 million charge as a result of cutbacks in Dole's Colombia- based flower business and soaring commodity costs contributed to its $89 million loss. Profits in 2005 were just $44 million.
Fitch Ratings considers the bulk of the company's $2.36 billion in total debt as ``speculative'' and ``highly speculative.'' Moody's Investors Service and Standard & Poor's Ratings Services take an equally dim view of Dole's health. In January, Moody's reduced its rating on $2.2 billion of Dole debt to B2 from B1 -- both noninvestment-grade ratings -- citing ``weaker than expected operating performance.''
In an Aug. 10 report, S&P analyst Alison Sullivan said her outlook for the company was negative. ``We could lower the ratings in the near term if operating trends continue to deteriorate, liquidity becomes constrained, or if Dole makes large distributions to Westlake Well-Being Properties,'' she writes, referring to the entity that owns the new Four Seasons.
Dole's senior unsecured debt, amounting to $1.1 billion, is considered by Fitch a ``high-default risk.'' Those 7.25 percent notes, due in 2010, were trading at a yield of 8.37 percent on Aug. 27, 4.15 percentage points more than U.S. Treasuries.
Poor bond ratings are just the beginning of Dole's troubles. On July 25, the European Commission's antitrust unit charged Dole and other produce companies, including rival Chiquita Brands, with forming a banana cartel by sharing price information.
The investigation began with a raid on the companies' European offices in 2005. If the companies are found to have committed antitrust violations, they can be fined as much as 10 percent of their annual European sales.
In a July 25 statement, Dole said, ``The company strongly disputes the European Commission's allegations of anti- competitive behavior and believes that Dole has not violated the European Union competition laws.''
In Los Angeles Superior Court, the company was embroiled in July and August in a lawsuit brought in March 2004 by 12 workers from Nicaragua, who charge that a pesticide, dibromochloropropane, or DBCP, used by Dole on Nicaraguan banana plantations caused sterility. The company is fighting a total of 490 lawsuits, most of them filed in Nicaragua, claiming damages of $41.5 billion, according to company filings.
In a July 31 company filing, Dole argues there is ``no reliable scientific basis'' for the assertion that DBCP is harmful. Last December, the company settled 16 similar cases without admitting any wrongdoing.
In North Carolina, local political leaders say that Murdock is engaged in exploitation of a different kind -- luring public officials to give him subsidies in return for creating jobs.
Murdock's North Carolina connection goes back to 1982, when he paid $413 million for then publicly held Cannon Mills, maker of Cannon towels and linens. As part of the deal, he picked up 660 surrounding acres, including most of downtown Kannapolis -- current population 39,000. North Carolina's textile industry was already in decline, says Kannapolis's city manager, Mike Legg, and after Murdock eliminated some factory jobs in 1985, the Amalgamated Clothing & Textile Workers Union attempted to organize Cannon.
Lynne Scott Safrit, an aide when Murdock owned Cannon Mills who now oversees his North Carolina properties, says Murdock personally led the fight against the union with frequent trips to Kannapolis. Murdock prevailed. Even so, a year later he turned around and sold the majority of the company to Fieldcrest Mills Inc., which in 1997 sold it to Pillowtex Corp. That company went bankrupt in 2003 and closed the former Cannon Mills, firing all 7,650 workers.
Murdock watched these developments from California and in 2004 made his move. He re-acquired about 500 acres of the Cannon Mills real estate for a little more than $6 million. He already owned hundreds of acres in the area, including a farm that includes a 12-bedroom, 15,000-square-foot (1,400-square-meter) lakefront mansion he has dubbed the ``Pity's Sake Lodge.'' The home is replete with a herd of Welsh black sheep and a llama.
``We won,'' Safrit recalls Murdock telling her after the deal was done, referring to the auction to acquire the property. ``Now what are we going to do with it?''
The answer was the North Carolina Research Campus, now being built by Castle & Cooke under Safrit's supervision. The project, whose first building will be completed by next year, consists of a million square feet of office and laboratory space, plus another 350,000 square feet of commercial and retail space and 1,100 homes and condominiums. Construction alone will cost $1.25 billion. Murdock then plans to jump-start actual research by funding a foundation with a donation of $150 million.
Murdock's research partners in the project include four local schools -- the University of North Carolina, North Carolina State University, North Carolina Central University and Duke.
To encourage their participation, the main 311,000-square- foot David H. Murdock Core Laboratory will include a 950- megahertz nuclear magnetic resonance spectrometer -- a two- story, eight-ton piece of technology that can examine molecules in three dimensions. The machine will allow scientists to analyze the proteins that cause Alzheimer's disease, among other applications.
Steven Leath, vice president for research at the University of North Carolina, says that when Murdock first proposed the research center and invited the local academic community to become part of it, his colleagues considered it a dream. ``He turned fantasy into reality,'' Leath says. ``Now anybody involved in the project is a true believer.''
Kannapolis city and Cabarrus County officials are for the most part equally enthusiastic. ``The city has been on board from day one, and the county too,'' City Manager Legg says, noting that the construction alone promises to bring hundreds of jobs to the area. The campus will include a new government center for the city.
Murdock and Safrit asked the city and county to help pay for construction of water and sewer connections and other infrastructure with tax-increment-financing (TIF) bonds, a common and sometimes controversial instrument used by many states to help revitalize blighted areas. The securities are backed by the incremental increases in property tax revenue collected as assessed values increase in the redeveloped area.
The county and city have tentatively agreed to issue $168 million in TIF bonds to help pay for the infrastructure. ``We're saying we want to use the new property taxes we'll generate to pay for improvements,'' Safrit says. ``The bottom line is, taxpayers don't pay for it.''
Retired North Carolina Supreme Court Justice Robert Orr, who's campaigning for governor on a platform that includes opposition to corporate giveaways, argues that through the TIF bonds, the city and county will end up denying much-needed property tax revenue to municipalities and schools. ``He said he's trying to do something for the community,'' Orr says. ``That's great, but don't ask the public to subsidize businesses that you expect to make money for you.''
County manager Day is also skeptical, though the county commissioners he serves have already approved the TIF bonds. ``The state is providing the anchor tenants for the project,'' he says, referring to the state universities that have agreed to rent space. ``There is the core lab building that will have equipment and measuring devices that will be rented to the universities and other tenants. It's a business prospect, not a charity.''
Kannapolis City Manager Legg disagrees. ``The issue of public financing for this project has been a little contentious at times,'' he says. ``But in the end, everyone agreed it's not a moneymaking scheme.''
Murdock says he's not developing the research campus for the money. ``With the money we're spending, I'm not so sure we'll get it back,'' he says. ``It's not done just to make money.''
Conrad notes that, in any event, Murdock has seldom been deterred by local opposition to his projects. ``He doesn't have to be as politically correct as the rest of us,'' Conrad says.
And, except when it's important for the backing of one of his newest healthy-living initiatives, Murdock doesn't need to sit through anyone's two-hour speeches either.
Bloomberg
David Murdock is annoyed. The mayor of Westlake Village, California, site of Murdock's new 270-room Four Seasons hotel and health spa, and headquarters of his $6 billion Dole Food Co., has just finished speaking for almost two hours.
Murdock, proprietor of one of the U.S.'s biggest private corporate empires, is impatient to get back to business. At 84 years old, he usually doesn't allow anyone to waste his time. ``Two hours, can you believe it,'' he says, shaking his head in disbelief.
The occasion of the mayor's speech last December was to help celebrate the opening of Murdock's California WellBeing Institute, a product of his late-in-life conversion to healthy living. And the institute is just a curtain raiser to a much grander Murdock health-focused project: the 350-acre, $1.25 billion North Carolina Research Campus rising from the ruins of shuttered textile mills in Kannapolis, North Carolina, that Murdock once owned.
The research campus is being built by real estate giant Castle & Cooke Inc., the other pillar of Murdock's vast domain. Three North Carolina public universities, plus private Duke University, have signed on to do food-related research there.
Murdock has been preaching the benefits of a low-fat diet with lots of fruit and vegetables for decades -- he's 5 feet 8 inches and 150 pounds himself. ``I think it's pretty obvious that people are overweight,'' says Murdock, whose personal fortune is valued by the Los Angeles Business Journal at $4.5 billion. ``All you have to do is walk around any shopping center to see something is wrong in America.''
Murdock has used his ownership of Dole to pursue his passion for improving America's diet. The company, once best known for growing pineapples in Hawaii, now sells a variety of fruit and vegetables -- including bananas, broccoli, prunes and Tibetan goji berries -- that Murdock considers particularly healthful. The billionaire has also spent millions of dollars producing books and pamphlets on nutrition.
Bond investors may wish Murdock would spend less time on his health crusade and more improving Dole's bottom line. Last year, the company lost $89 million on $6.2 billion in sales. The assessment of its $2.4 billion in bonds and bank debt by Fitch Ratings ranges from ``speculative'' to ``high-default risk.''
The company is fending off lawsuits accusing it of selling spinach last year that was contaminated by the E. coli virus. Dole blames the contamination on the packager of the spinach.
The European Commission in July accused the company of conspiring with rivals to fix prices on banana imports, which Dole denies. And the company has been defending itself since July in a Los Angeles Superior Court civil trial against allegations by 12 Nicaraguan banana workers that Dole poisoned them with pesticides, which the company also denies.
Fitch Ratings analyst Carla Norfleet Taylor says Dole's poor ratings reflect its large debt load and flagging profits. ``Commodity costs in terms of fuel, packaging and production are way up,'' Taylor says. ``Most of the issues they're going through are out of their control.''
Murdock's North Carolina Research Campus is controversial too. The local city and county governments have agreed to underwrite $168 million in water and sewer connections and other improvements to the property. John Day, manager of Cabarrus County, where the facility is located, says the research campus is a profit-making enterprise and doesn't deserve government help.
``Normally, if someone is developing a research park, all the infrastructure improvements are typically paid for by the developer,'' he says. ``It would make this the largest incentive provided by a local government in North Carolina history.''
Murdock's California and North Carolina health projects -- and even Dole itself -- are a sideline to the ninth-grade dropout's main career: real estate development. Murdock acquired the food company as part of Honolulu-based developer Castle & Cooke, which he bought in 1985 from public shareholders.
He split Castle & Cooke and Dole into separate publicly listed corporations in 1995, then took both private -- Castle & Cooke in 2000 and Dole in 2003. Today, through Castle & Cooke, he lords over a sprawling portfolio that includes housing developments, hotels, golf courses, offices and brick makers in 23 states.
Murdock's new Westlake Village Four Seasons hotel and resort is his third; the others are on the Hawaiian island of Lanai. He owns all except 2 percent of the 90,500-acre (36,600- hectare) island.
Murdock keeps a close watch on all of his far-flung real estate, racking up some 200,000 miles (322,000 kilometers) a year on his Bombardier Global Express corporate jet. Among his staff he is known for his attention to every
Managers on the entrepreneur's building sites have dubbed his favorite wall covering ``Murdock yellow,'' says Heidi Geier, executive vice president of the WellBeing Institute. She says Murdock also ordered boulders hauled over from Thailand's River Kwai to be built into the man-made waterfall in the garden behind the Four Seasons.
Still, Murdock says he finds time every day to think about health. And anyone who spends even an hour with him is treated to a series of pronouncements on the state of the nation.
-- He believes people who are overweight lack the willpower, even the intelligence, to stay slim. ``I have self- control,'' he says. ``Most people who gain weight have little or no self-control.''
-- Vitamin supplements are unnecessary, he says, because most nutrients can be found in fruit and vegetables. ``You don't need vitamins; some aren't even good for you,'' he lectures. ``I've never taken a pill of any kind except aspirin.'' He says he's never been sick.
-- Murdock says there's no such thing as stress. ``I don't recognize too much of the stress theory. Stress is a figment of people's imagination.''
-- An unhealthy diet, he believes, wreaks havoc with the body's basic chemistry. One of the tests given at the WellBeing Institute purports to measure the ``connection between your lifestyle habits and the rate of your DNA damage.''
Murdock's personal beliefs aren't always reflected in the way he runs his businesses. The managers of Murdock's WellBeing Institute, opened last November, would be happy to sell you a four-day, $2,910, ``stress management package.''
The rest of the institute's program is more in tune with Murdock's tenets. It emphasizes weight loss, healthy eating and comprehensive physical exams. Enrollees fill out a seven-page questionnaire called a LifeQuality Profile. Sample questions: ``How often do negative thoughts, such as judgmental voices, keep you awake?''; ``How many times per week do you eat brightly colored fruits and vegetables?''
The WellBeing Institute's medical program was designed by Andrew Conrad. An entrepreneur like Murdock, Conrad sold the medical testing company he co-founded to Laboratory Corp. of America in 2000 for $56 million. He spent some of the money on one of the few private houses on Lanai Island and struck up a friendship with the Dole owner.
Now Conrad, 43, who has a Ph.D. in cell biology from the University of California, Los Angeles, is overseeing the scientific portion of Murdock's new ventures. In a tour of the medical section of the institute, he shows off its state-of-the- art equipment, including a 3-D scanner and a Bod Pod that measures body fat. Conrad says much of the regimen at the institute is based on accepted medical practice. ``It's not like we're a bunch of granola-eating hippie dudes,'' he says.
The therapeutic strategies at the Four Seasons-based facility don't come cheap. A so-called ``ultimate'' health package, including a full physical by a staff physician, consultation with ``inner living'' experts and the intervention of a ``LifeAdvisor,'' runs $4,200 before hotel charges. (Weekday Four Seasons room rates start at $295.) An annual ``platinum membership'' in the institute, including periodic physicals and blood and cholesterol screenings, runs $15,000.
David Murdock was born in Kansas City, Missouri, the son of a traveling salesman. He says he soured on formal education at an early age. ``I got bored,'' he says. ``I always wanted to do something. If you can conceive it, you can do it.''
After he dropped out of school, he went to work at a gas station. He did a stint as a gunnery instructor in the army during World War II and ended up in Detroit, where he bought and then sold a small restaurant. In 1946, he migrated to Phoenix, which was just emerging as a boomtown, and started building houses. By 1950, he had graduated to shopping centers and small office buildings.
Murdock popped up on the national radar in 1964, when Time magazine noted his development of the first ``financial shopping center'' in the U.S., an office park that included a bank, a savings and loan, an insurance agency and a stockbroker, all tied together by a new, room-size UNIVAC 1107 computer.
The same year the Time story appeared, Murdock's Financial Corp. of Arizona, which built the shopping plaza, collapsed as a result of a real estate bust.
After paying off his debts, Murdock says he took the $1 million he had left and in 1966 headed west to California. He never considered becoming anyone's wage slave. ``I've never worked for anyone in my life,'' Murdock says. ``I don't know what it is to have someone tell me what to do.''
In his new L.A.-based business, Murdock didn't produce houses, just the stuff they are made of. He bought a collection of building materials companies, including, in 1969, Yankee Hill Brick & Tile of Lincoln, Nebraska, and, in 1973, Pacific Clay Products of Lake Elsinore, California. He still owns both companies.
By the 1980s, Murdock was flush enough to go back into real estate. After acquiring Castle & Cooke in 1985, he consolidated most of his companies under that name.
Nineteen eighty-five was also a watershed year for another reason: His second wife, Gabriele, died of cancer at 43. While she was ill, Murdock plunged into the available literature on cancer and came to the conclusion that he had just bought the cure for what killed his wife -- Dole. ``If I knew then what I know now, I could have saved her life,'' he says. ``It made me aware that if you eat properly and exercise, you can avoid most diseases.''
Murdock has been a man on a mission ever since, proselytizing to anyone who will listen about the life-saving benefits of a diet rich in fruit and vegetables. (He's what he calls a ``fish vegetarian'' himself.) At Murdock's behest, Dole in 2002 published a 500-page tome, ``Encyclopedia of Foods,'' which the company sells through the Dole Nutrition Institute, a company-financed publisher that cranks out pamphlets, cookbooks and other literature extolling the virtues of healthy eating.
In North Carolina, the exact nature of the Dole-sponsored studies that the new research campus will undertake hasn't been decided. Preliminary literature for the planned David H. Murdock Research Institute says only that it will be ``dedicated to scientific research on nutrition, fruits and vegetables.''
New York University nutrition professor and food industry critic Marion Nestle says consumers should be wary of any research sponsored by a food company. She cites a January analysis by Children's Hospital Boston and Harvard Medical School that found beverage nutrition studies funded by the drinks industry were four to eight times more likely to have conclusions favorable to the sponsors' financial interest than studies with no industry funding.
``The whole thing makes me squirm because there's so much evidence that funded research gives you answers that are favorable to the company that gave sponsorship,'' says Nestle, author of ``Food Politics: How the Food Industry Influences Nutrition and Health'' and ``What to Eat,'' among other books. ``This kind of thing is about marketing, not health.'' Dole responds that the findings of its research will ``under no condition be altered from the scientific facts.''
Nestle also served on the data and safety monitoring committee of a study on cancer conducted by researchers at the University of California, San Diego, and published on July 18 in the Journal of the American Medical Association. The paper finds that eating more fruit, vegetables and fiber than the five servings a day recommended by the U.S. government doesn't cut the risk that breast cancer will recur. ``It's disappointing,'' Nestle says. ``It didn't make any difference whether there was more healthy eating.''
Murdock's nutrition fixation has prompted him to reposition Dole to take advantage of consumers' willingness to pay more to eat healthy. Since 1995, he's shifted the company away from bulk sales of fruit and vegetables and toward what Dole refers to as ``value-added products'' such as bagged salads, precut vegetables and packaged fruit cups.
The company now has a 51 percent market share of the ``fruit bowls'' category, according to Information Resources Inc., a Chicago-based market research firm, and is No. 1 or 2 in most of its other major product categories. Its chief competitors are Cincinnati-based Chiquita Brands International Inc. and San Francisco-based Del Monte Foods Co.
Dole has benefited from some Americans' determination to eat green. Total wholesale fresh produce sales in the U.S. passed $97 billion in 2005, up from $35 billion in 1987, according to Dole's estimates, while the U.S. Department of Agriculture says Americans consumed 45 pounds more fruit and vegetables per capita in 2004 than they did in 1987.
The U.S.'s salad days haven't helped nourish Dole's bottom line. Although sales were up 6 percent to $6.2 billion in 2006, a $30 million charge as a result of cutbacks in Dole's Colombia- based flower business and soaring commodity costs contributed to its $89 million loss. Profits in 2005 were just $44 million.
Fitch Ratings considers the bulk of the company's $2.36 billion in total debt as ``speculative'' and ``highly speculative.'' Moody's Investors Service and Standard & Poor's Ratings Services take an equally dim view of Dole's health. In January, Moody's reduced its rating on $2.2 billion of Dole debt to B2 from B1 -- both noninvestment-grade ratings -- citing ``weaker than expected operating performance.''
In an Aug. 10 report, S&P analyst Alison Sullivan said her outlook for the company was negative. ``We could lower the ratings in the near term if operating trends continue to deteriorate, liquidity becomes constrained, or if Dole makes large distributions to Westlake Well-Being Properties,'' she writes, referring to the entity that owns the new Four Seasons.
Dole's senior unsecured debt, amounting to $1.1 billion, is considered by Fitch a ``high-default risk.'' Those 7.25 percent notes, due in 2010, were trading at a yield of 8.37 percent on Aug. 27, 4.15 percentage points more than U.S. Treasuries.
Poor bond ratings are just the beginning of Dole's troubles. On July 25, the European Commission's antitrust unit charged Dole and other produce companies, including rival Chiquita Brands, with forming a banana cartel by sharing price information.
The investigation began with a raid on the companies' European offices in 2005. If the companies are found to have committed antitrust violations, they can be fined as much as 10 percent of their annual European sales.
In a July 25 statement, Dole said, ``The company strongly disputes the European Commission's allegations of anti- competitive behavior and believes that Dole has not violated the European Union competition laws.''
In Los Angeles Superior Court, the company was embroiled in July and August in a lawsuit brought in March 2004 by 12 workers from Nicaragua, who charge that a pesticide, dibromochloropropane, or DBCP, used by Dole on Nicaraguan banana plantations caused sterility. The company is fighting a total of 490 lawsuits, most of them filed in Nicaragua, claiming damages of $41.5 billion, according to company filings.
In a July 31 company filing, Dole argues there is ``no reliable scientific basis'' for the assertion that DBCP is harmful. Last December, the company settled 16 similar cases without admitting any wrongdoing.
In North Carolina, local political leaders say that Murdock is engaged in exploitation of a different kind -- luring public officials to give him subsidies in return for creating jobs.
Murdock's North Carolina connection goes back to 1982, when he paid $413 million for then publicly held Cannon Mills, maker of Cannon towels and linens. As part of the deal, he picked up 660 surrounding acres, including most of downtown Kannapolis -- current population 39,000. North Carolina's textile industry was already in decline, says Kannapolis's city manager, Mike Legg, and after Murdock eliminated some factory jobs in 1985, the Amalgamated Clothing & Textile Workers Union attempted to organize Cannon.
Lynne Scott Safrit, an aide when Murdock owned Cannon Mills who now oversees his North Carolina properties, says Murdock personally led the fight against the union with frequent trips to Kannapolis. Murdock prevailed. Even so, a year later he turned around and sold the majority of the company to Fieldcrest Mills Inc., which in 1997 sold it to Pillowtex Corp. That company went bankrupt in 2003 and closed the former Cannon Mills, firing all 7,650 workers.
Murdock watched these developments from California and in 2004 made his move. He re-acquired about 500 acres of the Cannon Mills real estate for a little more than $6 million. He already owned hundreds of acres in the area, including a farm that includes a 12-bedroom, 15,000-square-foot (1,400-square-meter) lakefront mansion he has dubbed the ``Pity's Sake Lodge.'' The home is replete with a herd of Welsh black sheep and a llama.
``We won,'' Safrit recalls Murdock telling her after the deal was done, referring to the auction to acquire the property. ``Now what are we going to do with it?''
The answer was the North Carolina Research Campus, now being built by Castle & Cooke under Safrit's supervision. The project, whose first building will be completed by next year, consists of a million square feet of office and laboratory space, plus another 350,000 square feet of commercial and retail space and 1,100 homes and condominiums. Construction alone will cost $1.25 billion. Murdock then plans to jump-start actual research by funding a foundation with a donation of $150 million.
Murdock's research partners in the project include four local schools -- the University of North Carolina, North Carolina State University, North Carolina Central University and Duke.
To encourage their participation, the main 311,000-square- foot David H. Murdock Core Laboratory will include a 950- megahertz nuclear magnetic resonance spectrometer -- a two- story, eight-ton piece of technology that can examine molecules in three dimensions. The machine will allow scientists to analyze the proteins that cause Alzheimer's disease, among other applications.
Steven Leath, vice president for research at the University of North Carolina, says that when Murdock first proposed the research center and invited the local academic community to become part of it, his colleagues considered it a dream. ``He turned fantasy into reality,'' Leath says. ``Now anybody involved in the project is a true believer.''
Kannapolis city and Cabarrus County officials are for the most part equally enthusiastic. ``The city has been on board from day one, and the county too,'' City Manager Legg says, noting that the construction alone promises to bring hundreds of jobs to the area. The campus will include a new government center for the city.
Murdock and Safrit asked the city and county to help pay for construction of water and sewer connections and other infrastructure with tax-increment-financing (TIF) bonds, a common and sometimes controversial instrument used by many states to help revitalize blighted areas. The securities are backed by the incremental increases in property tax revenue collected as assessed values increase in the redeveloped area.
The county and city have tentatively agreed to issue $168 million in TIF bonds to help pay for the infrastructure. ``We're saying we want to use the new property taxes we'll generate to pay for improvements,'' Safrit says. ``The bottom line is, taxpayers don't pay for it.''
Retired North Carolina Supreme Court Justice Robert Orr, who's campaigning for governor on a platform that includes opposition to corporate giveaways, argues that through the TIF bonds, the city and county will end up denying much-needed property tax revenue to municipalities and schools. ``He said he's trying to do something for the community,'' Orr says. ``That's great, but don't ask the public to subsidize businesses that you expect to make money for you.''
County manager Day is also skeptical, though the county commissioners he serves have already approved the TIF bonds. ``The state is providing the anchor tenants for the project,'' he says, referring to the state universities that have agreed to rent space. ``There is the core lab building that will have equipment and measuring devices that will be rented to the universities and other tenants. It's a business prospect, not a charity.''
Kannapolis City Manager Legg disagrees. ``The issue of public financing for this project has been a little contentious at times,'' he says. ``But in the end, everyone agreed it's not a moneymaking scheme.''
Murdock says he's not developing the research campus for the money. ``With the money we're spending, I'm not so sure we'll get it back,'' he says. ``It's not done just to make money.''
Conrad notes that, in any event, Murdock has seldom been deterred by local opposition to his projects. ``He doesn't have to be as politically correct as the rest of us,'' Conrad says.
And, except when it's important for the backing of one of his newest healthy-living initiatives, Murdock doesn't need to sit through anyone's two-hour speeches either.
Bloomberg