September 9, 2019

4 Min Read
Founder of Self-Storage REIT Public Storage Revealed as ‘Secret’ USC Mega-Donor

Billionaire B. Wayne Hughes Sr., the co-founder of publicly traded self-storage real estate investment trust (REIT) Public Storage Inc., is believed to have donated about $400 million to the University of Southern California (USC) in his lifetime, with most of the money being given anonymously. Between 2010 and 2015, Hughes donated $360 million to his alma mater, with almost no public recognition, according to a recent investigative report by the “Los Angeles Times.”

The contributions, most of which have been given to the athletic department, make Hughes, 85, the Trojans No. 1 booster. His influence has included mentoring football stars who became longtime friends such as Marcus Allen, Rodney Peete, O.J. Simpson and Lynn Swann. The report includes details regarding his relationships with Swann, USC’s current athletic director, and Simpson, who he reportedly assisted with court strategy behind the scenes when Simpson was tried for the murders of his ex-wife, Nicole Brown Simpson, and her friend, Ronald Goldman.

Neither Hughes nor his relatives spoke to the “Times” for the article. In response to an interview request, which included an information summary, Hughes’ attorney Dawn Eyerly told the newspaper the material was “replete with many inaccuracies and mischaracterizations of his relationships,” but didn’t specify. Hughes “has intentionally chosen to live his life in a way that he avoids the spotlight,” Eyerly said in declining the interview. The entrepreneur has reportedly told associates that publicizing charitable work diminishes its impact.

Born during the Great Depression, Hughes migrated with his family to Southern California to escape the Oklahoma Dust Bowl. He received a scholarship to study business at USC during the 1950s. He launched his own real estate firm in the early 1970s, around the time he met land developer Kenneth Volk Jr.

During a trip to Houston, Volk visited an independently owned self-storage facility posing as a customer and was told there was a waiting list. Intrigued by the business, he told Hughes about the facility, and by 1972, the men had partnered and opened their first Public Storage location in El Cajon, Calif.

Though Hughes’ original vision was to build self-storage as a way to generate income until the property became attractive for other types of development, he and Volk quickly recognized how lucrative the business model could be. Offering limited partnerships to the public allowed the company to scale faster than competitors, according to the report.

By 1990, Public Storage was the nation’s largest self-storage operator, a position it still holds. Kenneth Woolley, who founded Extra Space Storage Inc., a competing self-storage REIT and third-party management firm, worked for Hughes in the 1980s. Woolley told the “Times” that Hughes was a business genius. “I’ve never met anyone as smart or creative,” he said.

In addition to sizable donations to USC, Hughes launched a charitable foundation in 1997 that today focuses on funding pediatric cancer research. The entrepreneur and his second wife, Kathleen Becker, lost their only child, 8-year-old son Parker, to leukemia in 1998. Hughes and his family have contributed more than $70 million to the foundation, according to tax filings.

Hughes has also supported the charitable efforts of former USC athletes, including Peete and his wife, actress Holly Robinson, who founded a nonprofit that provides aid to families affected by autism and Parkinson’s disease. In 2006, the Hughes Family donated $165,000 to Swann’s bid to be elected governor of Pennsylvania, according to the report.

Hughes stepped down as chairman of Public Storage in 2011, but the family retains 14 percent of the company, the “Times” reported. Hughes daughter, Tamara Hughes Gustavson, is the REIT’s largest shareholder and sits on the executive committee of USC’s governing board. She and her brother, B. Wayne Jr., are USC alumni.

Hughes also has interests in horseracing. In 2004, he acquired Spendthrift Farm in Lexington, Ky., where he spends much of his time with his third wife, Patricia Whitcraft, whom he married in 2017.

Despite his wealth, Hughes is known to be unassuming, even celebrating horseracing wins at In-N-Out Burger, the “Times” reported. Former USC President C.L. Max Nikias called Hughes “a man of impeccable character, loyal to his family and his philanthropic causes. He is a devoted Trojan.”

Based in Glendale, Calif., Public Storage has interests in 2,444 self-storage facilities in 38 states, with approximately 164 million net rentable square feet. Operating under the Shurgard brand name, the company also has 231 facilities in seven European countries, with approximately 13 million net rentable square feet.

Los Angeles Times, This Secret Donor Has Given USC $400 Million

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