Mike Leavitt has been Utah's governor for six years. He's seriously considering running for a third four-year term in 2000.
If he runs, he'll likely win.What will Leavitt find in 2004 when, after 12 years as the state's most important politician, he looks back at the family business he ran as CEO for nearly 10 years in the 1980s?
Well, he'll find that the family's 420 acres of land around Bun-ker-ville, Nev., just a stone's throw across the Virgin River from Mesquite, a booming gambling town - greatly increased in value.
Leavitt will also find a growing insurance agency that stretches across the West. And he'll be involved in deciding how a growing 1,200-acre family ranching operation in Wayne County develops home sites "that keep the character and flavor" of a rural farming community.
Leavitt's father, former state Sen. Dixie Leavitt, and his six sons (there are no Leavitt daughters) own the family businesses.
The firm, organized under the holding company The Leavitt Group Enterprises, has grown from a small single insurance agency operated out of Dixie Leavitt's basement in Cedar City into a large, multistate insurance agency holding company with 70 operations in eight states and land/real estate developments across southern Utah and Nevada.
Mike Leavitt ran the companies in the 1980s - taking over from Dixie when the elder Leavitt was called on an LDS Church mission. Mike Leavitt stepped down as CEO in late 1991 as he prepared to run for governor in 1992.
All in the family
The father and sons each own one-seventh of the family business. (Mike Leavitt "sold" his 1/7th share in the family's troubled trout farm business to his father and brothers as he prepared to enter the 1992 governor's race. But since the trout farm was losing money because of a whirling disease infection in the fish, Mike Leavitt said he wasn't paid anything for getting out of the farm.)
The governor doesn't work for the family business now and hasn't since before his election.
But he keeps abreast of what's afoot, he says, for sentimental reasons - "I put together a lot of deals the business works with today," - and because it is what he, his brothers and his father like to talk about.
"I talk to my brothers and father maybe once a week," says the governor. While questions like "How's the family doing?" are part of it, "we talk about what they're doing and I may ask how that business deal in Oregon is going. It's a natural thing," says Leavitt.
While he says he makes no managerial decisions, has no formal role in the businesses, he knows what's going on. In part, that's because several times a year Leavitt takes time off to attend "family business meetings," that are routinely listed on his schedule.
The half-day meetings are scheduled quarterly; Leavitt says he makes it to two or three a year.
The agenda?
The governor, his father and the brothers sit down and chew the fat - most often about their business dealings.
"Many families have traditions. Some go together to a BYU football game or fishing. My father loves to get his sons together and talk business," said Leavitt.
Since the business is set up to pay salaries to family members who work at the business, Leavitt draws no salary. However, the family concern also pays out a relatively modest disbursement each year to each of the seven owners. Leavitt has continued to take that during his governorship - an amount that runs between $15,000 and $20,000 a year.
The family business is actually a Nevada limited partnership - The Leavitt Group Enterprises, set up by Dixie Leavitt in the late 1960s. From that springs individual corporations (each one owned wholly by Dixie and the six Leavitt sons) which, in turn, are the seven partners in the partnership.
Leavitt and his brother, Dane, who is now the CEO of the partnership, both say the Leavitts get no special tax benefits from the set up in Nevada, that Utah taxing entities get no less tax money than if The Leavitt Group were a Utah limited partnership. (Nevada has no corporate or personal income tax.)
"Actually," says Dane Leavitt, "We're thinking of making it a Utah limited partnership."
Profits from the group are paid out each year to the seven individual corporations, which in turn "lend" much of the money back to the partnership, explains Mike Leavitt. The governor's yearly disbursement comes from his individual corporation, Michael O. Leavitt, Inc. He pays appropriate state and federal taxes on it, he says.
Future land development
While the heart of the family business is still the insurance agencies, real estate has become an important part of the overall operations, as well.
The Leavitts have a lot of money in the ground - especially in Bunkerville and their 1,200-acre working ranch outside Loa, Wayne County.
Parts of three subdivisions sit on the Leavitts' 420 acres in Bun-ker-ville. Zoned to allow up to eight houses per acre, the land has the potential for hundreds of home sites.
Currently, 89 Leavitt subdivision lots have been approved in Bunkerville; 38 of those have been sold or are under contract, says Dane Leavitt.
Anyone who has recently driven I-15 south of St. George knows that Mesquite is a fast-growing community. A road and bridge connect the five-casino town to nearby Bunkerville, an unincorporated community of about 800.
In the past several years the Leavitts sold ground for a new Bunkerville elementary school. Continued growth in the area is virtually assured.
The Leavitts aren't newcomers to Bunkerville. Dixie was raised in the small desert ranching community and the governor's paternal grandfather and grandmother lived there before their recent deaths.
Dane Leavitt says the family has not added to its Bunkerville land inventory since 1993, when the governor took office. The governor has previously told the Deseret News that the family has been "banking" land in Bunkerville for years, counting on residential growth.
The Bunkerville "bank" is beginning to pay off.
"It is a substantial asset," says Mike Leavitt, speaking of Bunkerville. "We have enough water to develop the land." And that is key in a desert - "to have the land and the water together."
The governor is vigorously opposed to gambling in Utah. That's not surprising - either from a political standpoint or considering Leavitt's background. Polls show most Utahns don't want legalized gambling in the state. Leavitt is a faithful member of the LDS Church, which teaches its members not to gamble.
Is there irony in the fact that Utah's governor stands to make money on land development near a gambling town?
"That's a stretch," Leavitt says. "We (the family) were in Bunkerville long before there was ever gambling in Nevada.
"In fact, the history is it would have been called Leavittville, but there was one more Bunker" in the LDS pioneers who settled there in the 1870s, the governor jokes.
"We are not making money out of gambling. We operate no gambling business and don't intend to. But the area - Las Vegas, too - is growing." In the insurance part of the family business, "many of our clients are contractors, manufacturers," all prospering from the booming southern Nevada economy.
"There clearly is a multiplier effect" of gambling bringing tourists and development to the area, says Leavitt.
Back on the range
The Leavitts' other major land investment is a 1,200-acre working ranch near Loa, Wayne County.
Coupled with the ranching operation is the Road Creek Inn, a bed and breakfast establishment on Loa's main street and the Road Creek Rod and Gun Club, a private hunting and fishing reserve that operates in conjunction with the inn and ranch.
Like the Bunkerville property, the family started purchasing acres around Loa in the mid-1960s, "buying up land" as neighbors decided to sell, Leavitt notes.
This past summer - during what has become the governor's yearly retreat/vacation to Loa - he drove around the ranch with three or four of his brothers, looking out over the land and imagining what could be.
Someone could make a lot of money subdividing the alfalfa fields, four houses to an acre, he notes.
"But it won't be us," says Leavitt. "We want to maintain the agricultural feeling" of the land.
With the Internet allowing many people to work from anywhere they wish - there will become a growing interest in living a more rural lifestyle. "There will be people who want a house on a hill" overlooking the Parker Plateau, "with an alfalfa field on one side, a pond down in front and an alfalfa field on the other side," says Leavitt.
Leavitt says his family will find the right mix among a working farm, a wildlife conservation area, home and a ranch.
Don't live like they're wealthy
The Leavitts are financially well-off, although Mike Leavitt points out they don't live like that.
"It was a way that Mom and Dad raised us."
Leavitt doesn't like to talk about his money. Part of that may be politics - few politicians want to be perceived as wealthy, even if they are, because most of the voters aren't. (Leavitt has not put personal money into his own elections, although he did run his 1992 race out of the family's Salt Lake insurance headquarters for much of the campaign).
But it's also the way he was brought up, the way he and his brothers are rearing their families.
When the governor and his family were forced to move out of the Governor's Mansion when it burned several years ago, back into their modest, east-side Salt Lake home, they decided to stay in the single-story house after the mansion was restored and opened.
They just felt better about rearing their family in the smaller, less pretentious house, Leavitt says. His salary as CEO of The Leavitt Group "would be considered modest by any comparison with a comparable executive."
For a number of years after Leavitt's election, his wife, Jackie, continued driving a rather beaten-up van.
"We drive our vehicles for seven, eight years. We wear them out," says the governor. They've since gotten a new vehicle.
Leavitt is known to be tight with a nickel. He buys his suits at discount clothier Mr. Mac's. His children earn wages and are expected to follow a personal budget.
"It may sound corny, but one thing Mom and Dad taught us was a sense of the right way to live. And I want my children to know that you can't buy happiness - and we are a very happy family."
The story of the Leavitt family business is a true American success story, says Leavitt, from nothing to a multimillion dollar operation.
"I remember my father's first office, in a small room in the basement of our house in Cedar City. When he made enough money to rent an office somewhere else, I got that room as my bedroom.
"He used to take me on business trips. Since he grew up in Bunkerville, many of his friends went on to run businesses in Las Vegas, and he'd drive to Las Vegas, through Bunkerville, several times a month" trying to sell insurance.
On many of those trips, Dixie Leavitt would take his oldest boy, Mike, with him. "We knew every bump on the Bunkerville (to Mesquite) bridge. I drove it several months ago and I counted the bumps out loud again, just like we used to - there are 20 of them."
When he was just 11, Mike drove his first tractor - an old white and gray Ford - on his grandparent's Bunkerville farm.
Business was part of their lives - Dixie's and his sons'.
"One day, on the road to Las Vegas, we passed a truck on the old two-lane road (before I-15 was finished). It carried green fence posts. Soon, we passed another truck coming the other way. It, too, carried green fence posts. I noted to Dad, what a waste, two trucks going opposite directions, carrying the same thing.
"Dad said they were headed for a point in between. `And that is all possible because somebody got out here (in the desert) and sold something. And that's how capitalism works.'
"I must have driven that road 100 times with Dad from age 6 to 15. Those were good times," Leavitt recalls.
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The Leavitt family
What they're doing now
Dixie Leavitt. founder and chairman of The Leavitt Group Enterprises (headquartered in Cedar City). Semiretired. Not involved in the day-to-day operations of the firm but serves in an active advisory roll. Working on some small real estate developments on his own in Cedar City.
The Leavitt sons, in decending age, oldest to youngest:
Mike Leavitt. Governor of Utah.
Dane Leavitt. CEO of The Leavitt Group, Leavitt Land and Investment Inc. and various other associated entities.
Mark Leavitt. Runs the Road Creek Inn, the trout farm and the Road Creek Rod and Gun Club.
Eric Leavitt. Works in the Salt Lake office of The Leavitt Group overseeing leasing of various Leavitt-owned commercial buildings.
David Leavitt. Juab County attorney.
Matthew Leavitt. Will attend Dartmouth medical school this fall.
The Leavitt family businesses
The Leavitt Group Enterprises
- Nevada limited partnership that is the main insurance holding company.
Owns controlling interest, usually 60 percent, in 70 independent insurance agencies located in Utah, Nevada, Arizona, Colorado, New Mexico, Idaho, Oregon and Connecticut.
Leavitt Land and Investment Inc.
- Utah corporation that used to called Cedar Development Corp. and now is the holding company of Cedar, Leavitt Land and Livestock Inc. and Security Ranches Inc.
- Owns land and water rights near Bunkerville, Nev. Farm ground there is leased to an unaffiliated dairy. Other land is being developed in subdivisions.
- Manages apartment units in Cedar City, some of which are owned by LLI, other under owenrship of subsidiary entities owned by LLI.
- Owns about 1,200 acres of farm and grazing land in Wayne County.
- Owns grazing permits, some of which are on state land (Parker Mountain). State grazing rights were purchased before Mike Leavitt was elected governor.
- Owns and manages commercial buildings in Cedar City, Nephi, Ephraim and Heber City. LLI leases space to state agencies in Cedar City, Nephi, Ephrarim and Heber City. These include:
54 N. Main, Nephi, Department of Social Services, 1,775 sq. ft.
48 N. Main, Nephi, Highway Patrol, 660 sq. ft.
190 N. Main, Heber City, Human Services, 3,200 sq. ft.
96 S. Main, Ephraim, Dept. of Public Safety, 570 sq. ft.
111 N. Main, Cedar City, Dept. of Public Safety, 1,589 sq. ft.
All of the above leases were first initiated by the state before Leavitt was elected governor and renewed under standard, competitive bids.
Leavitt Wayne County operations
- Security Ranches and Dairy Inc.: A Utah corporation that operates a ranch and dairy.
- Road Creek Inn Inc.: A country inn and restaurant in Loa. RCI also owns Road Creek Rod and Gun Club, a privite fishing and hunting enterprise.