April 24, 2013
Doheny Meats buyer Shlomo Rechnitz on business, philanthropy
Fifteen years ago, Shlomo Rechnitz co-founded TwinMed, a wholesaler of medical supplies serving nursing homes. Since then, Rechnitz has founded, or bought, and grown a number of other businesses, including Brius Healthcare, now the largest operator of nursing homes in California.
Along the way, Rechnitz, 41, also became a major philanthropist, giving away millions of dollars — to Jewish charities and also directly to people in need. On more than one occasion he’s come to the aid of a major Orthodox organization, offering gifts or loans in times of crisis.
It was a combination of these two attributes — business expertise and an expansive view of philanthropy — that led Rechnitz to buy Doheny Glatt Kosher Meat Market, the scandal-ridden Los Angeles kosher meat distributor and retailer that closed its doors last month.
“The Rabbinical Council of California [RCC] approached me and said, ‘Shlomo, could this be one of your charity things?’ ” Rechnitz recalled in an interview with the Journal earlier this month. “Kosher meat is expensive enough.”
Rechnitz took less than a week to close the deal with Doheny’s former owner, Mike Engelman, who was caught on video bringing unidentified meat products into his store at a time when the RCC’s supervisor had left the scene. Then he only held onto the purchase agreement for about a week before arranging to transfer it to a third party, David Kagan, the owner of the glatt kosher retailer Western Kosher, which also does some distribution to local businesses. Doheny Meats hadn’t reopened as of press time earlier this week, and Kagan declined to be interviewed for this article, saying then that the deal had not yet been finalized.
“I love the rush of a deal. It’s like a coke addiction,” Rechnitz, said, a tall glass of caffeine-free Coca-Cola on the coffee table in front of him. “Not that I know what coke addiction is.”
Whether he’s in the hunt to acquire a new long-term care facility — through Brius, Rechnitz owns 62 across the state — or some other business or property, he enjoys the challenge of outsmarting, outbidding or outmaneuvering the competition.
“That is salesmanship,” said Rechnitz, a native Angeleno who said he inherited a peddler’s instinct from his grandfather, who sold women’s apparel, and his father, a closeout salesman. “You’re selling your business, you’re selling your service. You’re telling them why you should be the one that should be chosen.”
In his first big venture, Rechnitz and his twin brother, Steve, founded TwinMed, which offered nursing homes the ability to buy supplies not on an item-by-item basis — ordering this many boxes of latex gloves or that many cases of gauze — but by paying TwinMed a set daily rate for all supplies for each patient in their care.
This “per patient day” system helped TwinMed grow to become one of the largest distributors of medical supplies to nursing homes in the country, and has attracted attention and accolades within the business world.
In each of the past two years, the brothers have presented their business as a case study for students in the MBA program at Stanford, and, in 2011, Ernst & Young named Steve Rechnitz “Entrepreneur of the Year” in the health care category.
The Rechnitz twins have some clear business advantages. They can stand in for one another in a way that only identical twins can; their employees, associates and even their 5-year-old sons occasionally get them confused.
And the Rechnitzes are, in a word, big.
“It never hurts when you have two 6-foot-8, 300-plus-pound people walking into your office and strongly suggesting that you buy their product,” Steve Rechnitz said in accepting the entrepreneur award in 2011.
Steve is the active CEO of TwinMed, while Shlomo has moved into other businesses. He started by buying nursing homes and then began to get involved in businesses that nursing homes contract to, including a pharmacy, a pest control firm and an ambulance company.
Shlomo Rechnitz pursues similarly varied interests in his philanthropic work.
Within Orthodox circles, he is almost always called by his first and middle names, Shlomo Yehuda, and he has become known for his aid to prominent nonprofits at times of crisis.
In November 2011, when the head of the Mir Yeshiva in Jerusalem died suddenly, leaving the 7,500-student institution $15 million in debt, Rechnitz, who had spent nearly five years studying there, donated $5 million. Others followed, Rechnitz said, and Mir’s debt was paid in full within three months.
In December of that year, Rechnitz purchased a creditor’s note against Chabad of California’s headquarters in Westwood for $2.35 million, helping the organization avoid foreclosure. Rechnitz, who also donates to Chabad in more conventional ways, said he still holds the note, adding that he’s hoping to be paid back “one day.”
And after Hurricane Sandy wreaked havoc on the East Coast, Rechnitz gave $1 million to aid in the rebuilding of Orthodox Jewish day schools and to assist the families whose children attend those schools.
“His business is a front for his charity,” said Rabbi Chaim Cunin, CEO of Chabad of California, who went to school with Rechnitz for a few years when they were boys growing up in Los Angeles. “Because he lives his charity.”
Many people seek Rechnitz’s help these days. Over the course of an hour-long conversation, his cellphone rang a dozen times and three people knocked on his door.
Rechnitz hasn’t maintained an office for many years, preferring to do business either from his home or over the phone while driving around the neighborhood around La Brea Avenue, so it’s possible those calls were business-related. But it’s equally plausible that Rechnitz was ignoring, temporarily, people soliciting his assistance.
Rechnitz calls himself “a nondenominational giver” and said that at times he reaches out to those who aren’t coming to him. Last year, Diana Aulger, a pregnant woman in Texas, decided to have her doctors induce labor so that her husband, Mark, who was dying of cancer, could meet their child. Mark got to hold their daughter, Savannah, for 45 minutes before he died.
Rechnitz saw the story online and sent Aulger a check for $20,000.
He also sends $10,000 checks to the families of police officers who are shot while on duty in Southern California. Those gifts are inspired in part by an urge to assist individuals who put themselves into harm’s way for the public good, but Rechnitz said he’s also driven by another motive.
“I don’t think that [non-Jews] should ever look back at the Jewish people and say, ‘You only care about your own,’ ” he said.