Arthur J. Falcone

The youngest of three boys, Arthur (Art) Falcone was born in 1959 in the blue-collar neighborhood of Queens, New York. Art's father, a policeman, influenced him greatly in his youth. In addition to his policing duties, Art's father became one of the first appointed officers to run the Police Boy's Club in Queens in the 1950s. That was the beginning of what became known as the Boys Clubs of America. 'My dad,' says Art, 'mentored at-risk youth'kids from halfway houses, broken homes, and even prison. When I was little, he would take me along to the club house where these boys gathered, and I grew up playing sports with them and listening to the advice my father would dole out while coaching their games and boxing competitions. I witnessed him help thousands of kids make something of their lives and it left a very positive impression on me.'

Having respect for others was at the top of the list of behavioral rules for Art's father, who also stressed to his sons the importance of honesty, hard work, and the quality of the company they kept. But Art also saw an entrepreneurial side to his father. 'My dad did side jobs in carpentry and roofing to give his family a few vacations. We lived in a small house and we never had much in the way of material possessions, but my parents always made me feel loved and secure.'

When Art was 12, he started a paper route. As a teenager, he worked in light construction. Seeing the challenges faced by the boys his father mentored, Art felt that working hard, earning a good living, and providing for your family was the definition of a successful life.

The importance of education was emphasized in the Falcone household, but Art was never fully engaged in the classroom. He was active in sports, especially boxing, which he started when he was 10. At 17, he participated in the New York State Golden Gloves competition and was an All-County football player. His high school was one of the few that offered training in architecture, engineering, and construction'all subjects that enticed Art.

Following his high school graduation, Art attended Nassau Community College. At the time, his brother, Ed, was working as a supervisor for McDonald's, and he encouraged Art to join their management training programming. He did and, soon thereafter, Art and his brother began going to owners of underperforming McDonald's restaurants'usually in rougher neighborhoods'and they would offer to turn the store around for a fee. 'These stores that we helped were in the worst parts of the Bronx and Queens,' says Art. 'They were being robbed all the time, but Ed and I understood this population, which was filled with the sort of challenged kids my dad mentored. McDonald's Corporation made us a promise that if after one year we were able to make these stores profitable, then we would be awarded with a franchise. We still had to come up with $15,000 of our own money to make that happen, but we felt we had nothing to lose. We saw this as an amazing opportunity.'

Art and Ed worked 15-hour days, seven days a week and were successful in making their target stores profitable. Ed was then offered a McDonald's license. 'McDonald's gave Ed two stores in Elmira, a depressed town in upstate New York, and I moved up there with him. We put down $15,000 for each store and got to work, but after about 18 months, I started getting restless. I wanted to be an owner. While waiting for McDonald's to come through for me, I saw a new opportunity and I took it.'

While working out at his health club, Art met the owner, Jack LaLanne (Horatio Alger Member from 1979). Art agreed to become LaLanne's first franchisee in the country, and he bought the territorial rights for all of New England. He moved to Boston and developed one of the first big-box fitness centers, which became the footprint for today's health clubs. That's when he received a call from McDonald's, telling him that if he came back, they would give him his own store. 'I liked what I was doing in the fitness business,' says Art, 'but McDonald's had'and still has'a great system. I found it more thrilling and really where I wanted to be. I sold my health club business and moved back to upstate New York. I found success there and proceeded to open additional McDonald's stores over the next few years. Ultimately, my brother and I had nine McDonald's stores between us.'

In 1983, Art purchased a piece of land, still in upstate New York, that was at the crossroads of two major yet-to-be-built commuter highways. He had an idea to go into the hotel business. 'I didn't have any experience in this business,' says Art, 'but I had confidence that I would do well in it. School had never interested me, but I have always loved to learn. I studied the industry, obtained bank financing, managed the construction, and proceeded to operate a Days Inn hotel. This was my first venture in real estate.'

Two years later, Art met another Horatio Alger Member, Dave Thomas (1979)'the founder and chairman of Wendy's'who had heard about his successes with McDonald's. Thomas offered him territorial rights to 40 existing Wendy's restaurants in South Florida. Once again, faced with what he perceived to be a great opportunity, Art and Ed sold their McDonald's stores to raise the necessary capital for this new venture and moved to Florida in 1986.

Soon Art realized that there was money to be made in building his own Wendy's, rather than paying rent and construction costs to another company. He formed, in 1986, Transeastern Properties, Inc., to remodel and build additional Wendy's. He also began acquiring and developing land to sell to landlords to obtain the best locations for his stores. This led to a realization that his true calling was in real estate. He relinquished his ownership in Wendy's and went fully into real estate development, particularly into the home-building business. Art, with his team, built Transeastern into one of the largest home-building companies in the country. Sensing that the industry was becoming overheated, however, he sold it in 2005 for $1.6 billion, which was the largest private sale of a home builder in the industry.

In 2005, Falcone Group started Miami Worldcenter, which is now the second-largest mixed-use development in the nation, at 27 acres, ten blocks, and as a planned 15-million-square-foot assemblage. The project will include world-class retail, hospitality, commercial, and residential uses in the center of Miami's urban core; it is expected to account for $5 billion in new investment in downtown Miami. 'I feel this mega-retail center will revolutionize the face of Miami for generations,' says Art.

Following the financial crisis of 2008, Art began to see new opportunities in real estate, especially mixed-use and residential developments. He formed Encore Capital Management, a real estate private equity firm that manages billions in developing real estate.

Twenty years ago, Art had cancer. 'It was the first time in my life I've ever been fearful,' he says. 'But I got over my fear, and then I got competitive. That was a fight I wanted to win'and I did. I now see that life'even a life with a great deal of success'is never a straight line. There are zigs and zags. It's a marathon, not a sprint'and the thing that gets you to the end is perseverance and determination.'

Art Falcone credits much of his success to the mentors he has had in his life, beginning with his parents and brothers, especially his brother Ed in the early part of his career. Later, his exposure to Ray Kroc (1972) and Fred Turner (1991) of McDonald's as well as Jack LaLanne and Dave Thomas all influenced him and taught him to have a vision, work hard, deal honestly, and be loyal to the people around him and the communities in which he has been associated.

Art is quick to say that his greatest success is his family. He has been married to his wife, Marcy, for 35 years. They have three sons: Nick, Dan, and Matt, who are all married. Art and Marcy have five grandchildren.

As an employer, Art enjoys giving advice to his young managers. 'I tell those who have just graduated from a university that, although their education got them this far, they now have to start from scratch to move forward. They need to demonstrate their passion for what we are doing. Because we are living in an ever-changing world, they need to be willing to change, adapt, and relearn to keep themselves relevant. I like dealing with people who have a lot of energy, who are motivated, and who have a positive attitude.'

Art grew up with the knowledge that his father changed lives for the better, and today that is his motivating factor. 'I ask myself how am I affecting the lives of those who associate with me as well as the communities where I do business. The person who taught me a lot about giving back is another Horatio Alger Member, Wayne Huizenga (1992). I think he will go down as one of the most game-changing people in Florida history because of what he did for the community and giving back.'

Art and Marcy have become major philanthropists in the areas of healthcare and education. A favorite project for them was joining Wayne Huizenga in bringing Junior Achievement to South Florida. Today, the Junior Achievement World Huizenga Center includes the Falcone Family Biz Town, which serves more than 56,000 students from Broward County, Florida. Every fifth-grade student participates in a series of 16 classroom lessons, where they learn about applying for jobs, voting, career opportunities, customer service, paychecks, savings, and more. Then they put their knowledge to work at JA Biz Town, where they operate a simulated economy and run businesses. They get hands-on experience at being citizens, consumers, employees, and business owners.

Humbled by his Horatio Alger award, Art says, 'To join the ranks of those who served as my mentors is indeed an honor. The mission of the Horatio Alger Association is in my DNA. It all goes back to the way my father helped so many young people to have a better life. To become part of this organization and to be recognized for all my hard work over these past 40 years is extremely exciting.'