Dan's Papers -February 6, 2009 - 2 Local Men: Howard Schultz, David Walentis

Two wealthy Bridgehampton men, both of whom we admire very much, are working vigorously on their businesses to get them through these interesting economic times.

One of them is Howard Schultz, who's dream was to build the single coffee shop he owned, Starbucks in Seattle, Washington, into a chain of shops around the world. He succeeded. Today there are tens of thousands of these shops, and they do nearly $8 billion worth of business a year.

Actually, the $8 billion they did was in 2007. In 2008, revenue dropped to $6.6 billion. A $4 cup of coffee suddenly seems like an actual expense to people now, instead of just where you go for the best morning java.

Last fall, Schultz closed 400 stores in the chain that weren't performing well (including Southampton and Southold, but they haven't closed yet,) then spent a whole lot of time retraining staff and instilling pride in his employees to make sure they get the Starbucks experience "right." He also got smaller cappuccino machines. The customers can watch the baristas and chat with them directly as they make the brew.

He's also put together excellent promotions. In January, partnering with HandsOn Network, he created a program where if you volunteer one day a week, helping out those not as fortunate, you get a free card for free coffee. There were signup sheets. Millions did. This month he has free "Starbucks" cards that look like they are Starbucks credit cards, but are actually cards to give you free iPod downloads of specific songs, absolutely free. There's a different one every week.

These measures staved off some of the decline, but it didn't stop it. What made the whole thing more difficult is that it all began to happen as Starbucks was going through another of its grand expansions overseas. So now there is another 300-store closing cutback, and a further reduction of staff at his main headquarters in the northwest.

We are putting ourselves into a position to get through whatever might come, he says.

The other Bridgehampton man is David Walentis. Walentis, the son of a man who owned a trucking company, had a dream 20 years ago to create an upscale residential neighborhood out of a falling down and largely abandoned warehouse district along the water in Brooklyn. It has been a terrific success. Calling it DUMBO, which stands for Down Under the Manhattan and Brooklyn Bridge Overpasses, he has so far created nearly 1,000 new apartments with splendid views of the Manhattan skyline just across the water. Now, as the economy settles into a recession, he has announced plans to build an 18-story residential complex, with a new school on the ground floor that would have even more apartments. Locals (there were no locals until he got there) complain that though the school is needed, because the apartment building will be so tall, where before there were four-story warehouses, the view of the Brooklyn Bridge will be partially blocked. For David and Jane Walentis, and their son Jeb, who is now a partner in the business, one can only say, what recession?

As we go to press, we learn that Schultz, as an economy measure, will not be selling decaf coffee after noon. A mistake, I tell you. Lots of people drink only decaf.