How I Did It: Joe Sitt, Thor Equities

Transforming urban shopping, one skeptical town at a time.

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As told to Sasha Issenberg

In just the past few years, residents of America's big cities have finally come face-to-face with some of their favorite bogeymen: big-box stores. And like a child of the Cold War who finally meets a Russian counterpart and finds that this one isn't so bad, urbanites have taken a liking to their Targets, Home Depots, and Wal-Marts--even if they still damn the trends that got them there in the first place. For this staggering contribution to cosmopolitan culture few deserve more credit than Joseph J. Sitt, the 41-year-old CEO and founder of Thor Equities, who has spent 20 years trying to lure the nation's top retail chains into inner cities and yuppie downtowns. Today he lords over nine million square feet in 16 American cities. He'll add to that with two recently announced projects in which he plans to bring national retail chains to legendary American places: Chicago's Palmer House Hilton hotel and the depressed amusement strip at New York's Coney Island.

Born and raised in Brooklyn, New York. Always really entrepreneurial as a kid. One of my last ventures before college was operating flea markets. The parking lots of the various racetracks around New York got converted into flea markets, and it was a fabulous opportunity to understand inner city commerce. One thing it showed me was how underserved the market was, how many people were desperate to buy toys. It's hard to imagine, but back then there weren't that many Toys "R" Us around.

Thor Equities was founded 20 years ago when I was in college. I was a comic-book collector and Thor was the Norse god and the comic-book character that protected planet Earth from the monsters that were destroying the buildings on the planet. That fit in with my concept of being the protector of the cities.

I went to New York University and heard about properties being sold off at tax auctions. My first properties were on East Tremont Avenue in the Bronx. I raised money from family, friends, roommates, parents of roommates. I built one-story retail. They used to be called "taxpayers"--the theory was you'd get enough revenue from the retail to pay the taxes until you could build a tower or something there. So I started off like that.

Historically, inner city retail stores had brick or stone façades. I guess they thought of themselves as being in a battle zone--which is not good marketing. Around the country, people really learned about the importance of consumers being able to see inside the store, rather than just a showcase in the window. We did things like use a grill with lots of small holes--it provided security, but if the merchant left the light on, the store really shone through.

Going into a strip center, we'd repave it, restripe the parking lot, nice fencing, lighting. We'd put a music system in the parking lot. That was nouveau. Play jazz on the weekdays; if you're in an African American neighborhood, play gospel on Sundays.

I would go out and knock on the doors of these national chains. One of them called me Preacher Boy. I was trying to sell the virtues of the inner city and its potential.

I won't tell you who it was, but there was one guy I called--I'm describing the area, the disposable income. He says, "What about the demo?" meaning the mix of people. "It's about 90 to 10," I said. Everything went well, and I called him back a week later. He said, "Boy, are you out of your mind? When you said it was 90 to 10, you didn't say it was 10 to 90!"

I think bigotry can blind people. Until the color green becomes more vivid than the color black.

When I was 11 years old, I was in Bentonville, Ark., visiting Sam Walton with my dad. Wal-Mart had about $230 million in sales and about $6 million in profit. I remember helping my dad sell his wares there--children's clothing. I'd get lost wandering in the offices, and Sam Walton would say, "Son, come on in," and give me a sweet. He was a monstrously big person, and he's had a lot of influence in my life. He was altruistic and socially conscious about his business and making the world a better place, and I've tried very hard to keep that ethos.

Toward the end of the '80s, I was frustrated that I couldn't get the quality retailers to come into my projects. I thought that if I couldn't bring Muhammad to the mountain, I'd bring the mountain to Muhammad. I hired merchants to study the urban marketplace to figure out where the biggest void was, with the ultimate purpose of creating my own retail concept to appeal to inner city customers.

They found that the biggest gaping hole was the sweet spot in general retail: ladies' apparel. There were stores, but they sold $5, $10, $15 leggings and T-shirts. There was no place for a working woman to get a nice suit, a nice blouse to go out in. What we also noticed was that a lot of African Americans happened to be fuller-figured, larger size. We came up with a concept called Ashley Stewart--the Ashley from Laura Ashley and the Stewart from Martha Stewart. Both of them were icons of upscale Americana, and we wanted to bring that upscale shopping experience--the antithesis of what you've seen in the inner city.

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