A boy is born Black in hard-times Georgia in 1930. One of eight children, his father has a fourth-grade education, the family is poor and the boy has a speech impediment that will be with him his entire life. Aspiring to be like the entrepreneurs whose small “Negro” businesses dot Atlanta’s then-thriving Auburn Avenue, he opens a shoeshine stand outside his family’s home.
From that patch of ground, Herman J. Russell went on to become a major construction and real-estate developer, and one of America’s wealthiest and most successful Black business owners. His H.J. Russell and Co. built the Atlanta headquarters of the Coca-Cola Co. and of Georgia Pacific; Mercedes Benz Stadium, home of the NFL’s Atlanta Falcons; and the Smithsonian’s National Museum of African-American History and Culture in Washington.
More than six years after his death at 83, Russell’s three children, Michael Russell Sr., 56; Jerome Russell, 58; and Donata Ross are in top posts at the company. Five of his eight grandchildren also work there. The family has prospered thanks to a unique moment: In post-civil rights Atlanta, corporations partnered with newly elected Black leadership. Minority-owned firms were assured a percentage of government contracts. As the city asserted itself as a mecca for ambitious Black Americans, Russell was building wealth that would sustain generations.
White citizens in America have six times the wealth of Black citizens, and the inability to build and pass down wealth is a major reason. In the new season of the podcast “The Pay Check,” Bloomberg explores the racial wealth gap and what it means for our society.
“My father was definitely at the right place, at the right time, with the right personality and determination and drive,” said Donata Russell Ross, 62, who is the chief executive officer of Concessions International, a family-owned airport food and beverage business. “Construction was the core. My father was a master plasterer, and he learned from his father, who was a master plasterer. But he was always an entrepreneur and he just understood how to make a dollar and the importance of controlling your own destiny.”
Few Black families have managed to parlay such skills into intergenerational wealth, said Andre Perry, a senior fellow at the Brookings Institution in Washington. Discrimination, redlining, racist banking policies and a lack of business capital conspired against them, he said.
“A lot of people say wealth is a reflection of character,” Perry said. “No, wealth is a reflection of policy and who benefits from it.”
Intergenerational wealth has eluded most Black Americans. Some 17% of White households, in a 2019 Federal Reserve Board survey, said they expected to receive an inheritance of about $195,000 at the median, according to the Brookings Institution. Only 6% of Black households were expecting an inheritance, the median of which was $100,000.
White families in 2019 had median wealth of $189,100—about eight times that of Black families, according to the Federal Reserve. With the vestiges of 246 years of slavery still festering in America, trying to catch-up is like trying to compete against a baseball team that starts each inning on third base.
The Russells are managing to win. Still closely held, H.J. Russell and Co. today employs 1,200 people, and generates about $180 million in annual revenue. The company is managing a $5 billion construction project at Atlanta’s Hartsfield International Airport, where it has been involved in various projects for over 40 years. It has a $100 million construction project at the Dallas/Fort Worth International Airport, and is building stations for a planned bullet train between Dallas and Houston. There are multifamily homes and entertainment venue projects in the works.
Russell’s descendants who run the firm are focused not only on growth, but on longevity.
“Ninety percent of wealth is lost by the third generation,” said 32-year-old Zane Major, who is operations executive at Concessions International. “Not only do we owe it to our grandfather to be the people that he wanted us to be, but we really owe it to the community and others around us to show positive examples of what is possible.”
Herman Russell represented possibility in Atlanta. When the city’s first Black mayor, Maynard Jackson, was negotiating in the 1970s to build what would become Atlanta Jackson-Hartsfield airport, he insisted on an unheard-of 30% minority participation on contracts. He also demanded that banks and law firms working on the project have Black people leading their teams, recalled Reuben McDaniel III, then a young banker and later chief executive officer of a securities firm the mayor opened.
“Herman is a great example of how this benefited Black businesses, because this was his first big public infrastructure project,” said McDaniel, who is now chief executive officer of New York’s Dormitory Authority. “It just changed the narrative on how Black owners built their business financially, because they made a lot of money on these projects, and it also changed the narrative on how they built their client base.”
More than 2 million African-Americans now live in greater metro Atlanta, and there are more than 7,600 Black-owned businesses, according to U.S. Census data. Only New York City area has more.
In Atlanta’s Castleberry Hill, an arts district whose lofts and lounges are popular with young Black professionals, the Russell company’s past and future can be found. A giant mural of Herman Russell looms over a major intersection, and the company’s former 54,000-square-foot headquarters has been transformed into the Russell Center for Innovation and Entrepreneurship, a business incubator whose mission is to provide young people with resources “to innovate, grow, create jobs and build wealth.”
“For my father, it was always about how could he develop a protocol or a system where the wealth in the family could be perpetuated?” said Michael Russell Sr., chief executive officer since 2003.
Herman Russell’s father, Rogers Russell, left his large family $12,000 when he died in 1959, according to Russell’s autobiography, “Building Atlanta.” More than the sum , which at the time wasn’t bad for a Black laborer, he taught his son a trade and instilled a work ethic. Herman Russell was notoriously frugal—he drove his wife to society cocktail parties in an old pickup—and he ensured the money stayed in the family. His made sure that his offspring attended private banking and estate planning conferences for the wealthy.
“He understood that we needed to be exposed to a lot more than he could teach us alone,” said Ross. “People share stores of mistakes they have made and there’s an understanding that it is very difficult to go from a first generation to a second generation, but even harder to go to all of the subsequent generations.”
In years of attending such meetings she saw just one other Black family.
Michael Russell Jr., 27, who currently works in New York for the National Basketball Association, said that as a child, every Tuesday night he and his cousins and their parents would join Herman Russell for dinner at his Midtown condo. It was the patriarch’s way of nurturing closeness and avoiding what happens to so many family businesses—as the family tree expands, relationships fracture and business interests and financial priorities diverge. “That Tuesday night dinner was a regular occasion for us to really get to know each other,” said Michael Jr.
Herman Russell never took his wealth for granted, even after he had a personal net worth that Black Enterprise estimated to be as high as $100 million.
In a 2020 documentary, one of Herman Russell’s former employees, Noel Khalil, recalled walking alongside Russell, by then worth many millions. “He saw a penny on the floor,” Khali said. “He went and picked up the penny and looked at me and said, ‘Noel, see how God has blessed me today.”
This article was provided by Bloomberg News.
