Born to a poor Native American family in small-town North Carolina and educated in Cleveland, Jim Thomas never imagined as a boy that he’d end up in Los Angeles, much less be responsible for much of the city’s distinctive skyline. But when his job as a young tax lawyer brought him to Los Angeles by way of Seattle in 1961, he never turned back. Thomas practiced law in Los Angeles for 20 years before partnering with Rob Maguire to develop office properties downtown. Together, the duo built some of the most notable skyscrapers in Los Angeles, including the U.S. Bank Tower, the tallest building west of the Mississippi. In 1996, the pair parted ways and Thomas founded his own real estate company, Thomas Properties Group Inc., which he took public in 2004. This fall, Thomas agreed to sell his company, which struggled to secure financing during the recession, to Parkway Properties Group Inc., a real estate investment trust out of Orlando, Fla., for $294 million in stock. The deal closed last month, and Thomas will continue to have a hand in the company from afar as chairman. He recently sat down with the Business Journal in his downtown office – a corner suite at City National Plaza with sweeping views of many of the towers he built – to discuss his heritage, concern over local traffic and plans for continuing his career in real estate.

Question: Tell me about your heritage. You’re Native American?

Answer: I’m a Lumbee Indian. It’s the largest tribe in the Southeastern United States. Legend, or the belief of the Lumbees, is that we are a split-off of the lost colony that landed on Roanoke. When I grew up in the South, it was still segregated. You had red, white and black public facilities, schools. I went to Indian school, and I never had any interaction with white people until I moved to Cleveland in the 11th grade.

How did being a part of the Lumbee tribe shape your childhood?

The great thing about it was we were never on a reservation and we were never treated as victims. My parents and the tribe never considered ourselves to be disadvantaged in any way; we had great pride. I was always told I could do anything with hard work and I think that was very important. The area is very poor. It’s the poorest county in the country, I’m told, now. But nobody thought they were poor.

What was it like living in a segregated community?

I had no feeling of being discriminated against. I mean, I was aware that I couldn’t go into white places, but it didn’t bother me because we felt superior. We were taught we were superior, so they don’t want us to come in? Fine.

What did your parents do for work?

My parents at one point were both school teachers. At one point we had a grocery store and at one point we had a little restaurant combined with a gas station. When we moved to Cleveland, (my father) took a job at the local Cadillac plant. The Korean War was going and the Cadillac plant had been converted to make tanks. He was a welder.

Was it tough to move to a new state in the middle of high school?

It was really tough. You don’t know how tough it was then, because back then the South was really looked down upon. So I was heavily discriminated against in Ohio. People called me “cracker” and “hillbilly,” all kinds of names. It was brutal. That was my first experience with discrimination.

How did you get started practicing law?

I went into private practice in Cleveland for almost two years, but then I decided I wanted to be a tax trial lawyer. The way to get the most experience was to either go with the U.S. Department of Justice or with the chief counsel’s office for the U.S. Treasury Department, trying cases for the IRS in tax court. The Justice Department wanted to send me to Montana and leave me out

there for two or three months, but I had a family and that didn’t sound like a real

good idea.

So you went with Treasury?

The chief counsel’s office had offices all over the country, so you could almost pick where you wanted to go. We picked Seattle with the intention of returning to Cleveland at the end of my four-year commitment for the job. Along the way, I decided I wanted to go to San Francisco, so I got in a queue. One day, my boss called me and said, “They need a lawyer in Los Angeles, you’d have to be there in two weeks.” So in January of 1966, I arrived in Los Angeles.

What was Los Angeles like in 1966?

Short! We settled in Monterey Park, but my job was downtown. I was used to seeing high-rise buildings, so to get to work, I figured I’d get on the freeway and get off when I saw some tall buildings and find my way around. The tallest building was City Hall. So it was a little difficult to find the building where I was on duty first – we drove right by downtown.

How did you get into real estate development?

After four years with the government, I worked for 16 years in private practice. I continued to specialize in tax, but I also drifted into real estate because a lot of my tax practice involved real estate. I had a client named Robert Maguire, and in 1974 there was a depression for commercial real estate. He, like all other developers back then, was struggling, so I got involved in assisting him in dealing with the issues he confronted. When we completed that, he invited me – or insisted really – that I become his partner. So from 1976 to 1983, I had two jobs.

You kept practicing law?

I left the firm I used to work for and I formed my own firm. In addition to that, I formed an alliance with Rob doing real estate deals – very long days and long nights. Then, in 1983, I decided I couldn’t afford to do both anymore, and I went full time into real estate with Maguire Thomas Partners.

Tell me about how you got started developing high-rises downtown.

We wanted to develop the Sunkist site, which is now 444 S. Flower St. It was a redevelopment project that had gone into default. But we were competing with Rockefeller’s real estate development company and they were represented back then by John Cushman. While we were competing for the site, the redevelopment agency kept telling us to look at Bunker Hill instead.

What was Bunker Hill like back then?

At that time, there was only one building. Back in the ’50s, somebody had gotten the bright idea that the way to do urban planning was to go into these central cities that were having difficulties and level them. That’s what they did on Bunker Hill; they just tore everything down. It had been, at one point, where rich people had these mansions. After they leveled it, nothing happened for years. Meanwhile, Security Pacific Bank built

333 Hope.

So the Community Redevelopment Agency convinced you to build on Bunker Hill instead?

Eventually. When the CRA called us to tell us we were not going to get the Sunkist site, they said again, “Why don’t you guys go up on Bunker Hill.” They mentioned that we could tie up the site where Wells Fargo Bank is now located. So we took it. And then we hired Philip Johnson, who was the No. 1 celebrity architect in the United States at that time – maybe in the world – to design the building for us.

But the Wells Fargo Center has twin towers. Where did the second one come in?

When we began to put together a model, we had these two buildings – Security Pacific and our planned tower. It didn’t look very impressive. So we went back to the CRA and said, “We really need another site so we can show some bulk, can we have the site next door, too?” So we got two sites and we got a model that showed some bulk. We never dreamed that we could actually build both buildings.

How did you manage to do it?

Ultimately, in the first building, we made a deal with Crocker Bank, the law firm Gibson Dunn and the accounting firm Deloitte. With them on board, we were able to build the first tower. Then, for the second tower, we made a deal with what’s now KPMG and with IBM. They took over 600,000 feet.

Why did you and Maguire go your separate ways in 1996?

We worked together from ’74 to ’96, so 22 years. I think we wanted to concentrate on different things. I had some ideas about what would make an ideal real estate company and Rob was very content with what he was doing.

Did you separate on good terms?

Yes, we’re good friends. We talk often.

What kind of ideals did you have for a new real estate company?

Well, as a development company, we never took in outside investors. We just concentrated on getting a project, getting it preleased and developing it. The problem with that was, when the cycle was going it was great. But when the cycle died, you had nothing to do. So I wanted to do what I called an evergreen company, one that no matter where you were in the cycle, you would have things to do. That meant bringing in investors and partners. We also did third-party property management and leasing in addition to developing, and we did acquisitions of existing real estate. So no matter where we were in the cycle, something was working for us.

How did Thomas Properties fare during the most recent recession?

We got hit pretty hard by the financial crisis. It hit at a very inopportune time for us and really set us back. In 2006, we did a secondary offering for $16 a share. In the financial crisis, our stock went down below $2. So we’ve been digging out of that hole.

Why did you decide to sell the company to Parkway Properties?

As the CEO, president and chairman, I had many responsibilities, but my primary responsibility was to the shareholders. It was clear to me that it would be in the best interest of the shareholders to merge with a larger company.

How do you feel about the merger?

I’m more sad than anything. I would have preferred to have the company go on forever, but I had to be prudent about what would be in the best interest of the shareholders.

What’s next for you now that the merger has closed?

I reserved my company name during themerger, so I’m forming a new entity so that Thomas Properties Group will continue. I’m talking to some of my colleagues who’ve been with me for 20 or 30 years about joining me in this real estate company, which will be a private company. I’ll also devote more time to some of the non-profits that I haven’t been able to spend as much time on as I would have liked. The leading one will be Fast.

What’s Fast?

Fixing Angelenos Stuck in Traffic. Traffic is obviously becoming a major problem and it’s only going to get worse. So I commissioned Rand Corp. to do a study based on a three- to five-year period to find out how to minimize traffic in Los Angeles. I said, “Come up with 10 or 12 things that can be done in a short period of time without major capital expenditures.”

What was one of the best ideas in the report?

One of the big payoff items that you can get the most bang for your buck is paired streets. Take Olympic and Pico, for example. Let’s say on Olympic you have four lanes of traffic coming east and two lanes going west. Then, on Pico, you’d have the reverse. The work to do that would cost just a little over $1 million – almost nothing – and you create a tremendous increase in capacity.

What’s a typical work day like for you?

I like to get up early, and I intend to continue to work downtown, so I want to be on the freeway by 5:30, before traffic. I like to get in early before the phones start ringing and people start talking to you to plan the day and get some work done. I leave at about 4:30 because I don’t want to get caught in the traffic getting back. But I continue to work until about 6 – hands free on the phone in the car.

You owned the Sacramento Kings for several years. How did that come about?

In the late ’80s, we had another real estate recession. We were solely office developers, so when there were no buildings to be built, there wasn’t much for us to do. So I looked around for something and I found basketball. I wound up buying the Sacramento Kings and the Arco Arena, along with Rob and Eli Broad and some other partners. I guess you’d call me the managing partner. It was my idea, my baby.

How long did you own the Kings?

I had the Kings from ’92 to ’99. Then, when the real estate market came back, I returned to focusing on that again full time.

Were you always a big basketball fan?

In college, I actually got a scholarship to play basketball. We also had Lakers front-row seats for years and years, so I’d say I was basketball inclined.

What position did you play in college?

I played guard. But in high school I played forward. They get a lot taller these days.

Tell me a little about your family.

My wife, Sally, and I just celebrated our 56th anniversary.

How did you meet?

We went to the same high school, but she was three grades behind me so we didn’t date until after I graduated and she was a senior in high school. One thing led to another and she – at the age of 18 – and I – at the age of 21 – got married. Now, in this day and age, you see an 18-year-old girl and you say, “She’s just a kid.”

Did you two have kids?

We have two living children, but we lost a son. We also have two grandchildren. My oldest daughter, Sherrie, lives in the Palisades about 10 minutes from our house in Brentwood. It’s very convenient because she has the grandchildren, which is especially important to their grandmother. My other daughter, Suzanne, lives in Pebble Beach.

After nearly 50 years in Los Angeles, what do you think lies ahead for
downtown?

I think it’s really on an upward trend. I mean, the things that have happened just over the last eight or so years with Disney Hall and L.A. Live and on and on, all the residential that’s been built and retail coming back, it’s all good. The wind’s at the back of downtown. I think, in terms of the office market, which I’m most familiar with, if you wanted to make a bet on where you want to be 10 years from now, you want to be downtown.