Posted Monday, February 16, 2004; 21:00 HKT
Minoru Mori, Tokyo's most powerful property tycoon and leading member of Japan's most prominent real estate development family, fancies himself as something of a philosopher-builder. He unselfconsciously calls himself a visionary. He's fond of mentioning that he planned to become a novelist, until the duties of his family's business took precedence; and he routinely drops allusions to great artists, thinkers and architects. Today, sitting in a leather armchair behind a gigantic marble conference table at his company headquarters, the 69-year-old president and CEO of Mori Building grandiloquently expounds upon his vision: buildings are not just business ventures or structures where people live and work but also opportunities for social betterment. His goal, he says, is to revolutionize the way his countrymen live by creating high-rise, inner-city communities that do away with the infamous Tokyo commute and free up more leisure time. At stake, he says, is nothing less than the city's international competitiveness and its citizens' happiness.

From anyone else, this might seem like delusional self-aggrandizement, but Mori actually has the muscle to put some mortar behind his message. Take his $2.25 billion, 11.6-hectare minicity that opened in downtown Tokyo 10 months ago. Called Roppongi Hills, the project features a 54-story office tower and 793 apartments, integrated with hundreds of shops and restaurants, plus parks, movie theaters and gardens, carved from the lots of more than 400 landowners whom Mori systematically bought out over 17 years. One central feature of the plan that highlights the master builder's commitment to culture is the Mori Art Museum. Designed as a showcase of contemporary international art (and chaired by Mori's wife, Yoshiko), it occupies a trophy location—the 52nd and 53rd floors of the office tower.

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Whether focused on art or commerce, intellectualism is a defining characteristic of the Mori clan. Minoru's father, Taikichiro Mori, the founder of what is now Mori Building, was originally a professor of business in Yokohama. But seeing how absurdly low land prices had fallen in postwar Japan, Taikichiro began buying lots in Minato ward in central Tokyo, where the family had been tobacconists and rice merchants for generations. With the assistance of his second son, Minoru, and third son, Akira, now 67, Taikichiro built Mori Building into one of Japan's most successful real estate management companies. (Taikichiro's two other children, Kei and Aiko, became university professors.) Fueled by the great Japanese asset bubble of the 1980s, Taikichiro reigned as the richest man in the world in 1991 and 1992, according to Forbes magazine.

Following Taikichiro's death in 1993, however, a rift arose in the house of Mori. Minoru and Akira harbored conflicting strategic visions. Minoru favored bold urban re-engineering, as demonstrated not only by Roppongi Hills but also a current project in Shanghai to build the world's tallest building. Akira gravitated toward more modest, financially conservative projects. Rather than squabble unproductively, the brothers parted ways in 1999, splitting the family empire into Minoru's Mori Building (with $1.3 billion in sales and 122 buildings under management) and Akira's Mori Trust ($949 million in sales and 68 buildings under management).

"A boat can't have two captains," Akira says. Though both men acknowledge that they are not close and almost never collaborate, they say that talk of a bitter rivalry is overstated. "We are not on bad terms. But since our philosophies differ so much, the world tends to see us as not getting along—it's easier to understand [BRACKET {that way}]," explains Minoru. Akira says the questions about their relationship are irrelevant. "We are in the same family but we are two separate companies," he says. "It's not a matter of being on friendly terms or not."

Akira, whose $4.1 billion fortune qualified him for the Forbes list of the world's richest people last year (Minoru did not make the list), chalks up their wildly contrasting personalities and business philosophies to birth order and the early influences of their family life.

As the third of three sons, Akira says, he always felt like an outsider. "In my family, there were Kei and Minoru and then there were the rest," Akira recalls. "Everyone in my family is very opinionated and everyone tried to join the debate. But by the time my turn came, there was nothing left to say. I couldn't keep pace, so I looked to do my own things." He started his career as a banker—the black sheep salaryman in a clan of intellectuals—before joining the family firm in 1972, he says, only after his father had asked him "at least three times."

Akira concedes the spotlight to Minoru, calling him a "great and true developer." He says he respects his brother's more enterprising nature and his ability to bring off projects of pharoic proportions. "Minoru's Mori Building gets exhausted by long-term projects. When you look at the process, it seems a little risky, but in the end it's a success." By temperament, Akira is more cautious, a shrewd financial analyst and hard bargainer who sees himself more as custodian of assets than a changer of landscapes. Although both companies have weathered Japan's decade-long economic stagnation better than many other real estate firms, many analysts say that Akira's workmanlike approach has created the more profitable, financially stronger company. "We do not predict the future," Akira says. "We do short-term projects."

Inevitably, some sibling rivalry remains. "My brother is more interested in creating a good company with a high valuation than in creating cities," Minoru sniffs. But both men agree that the dynamics of operating a family business are changing. Investors today demand a level of financial and organizational sophistication that goes far beyond the amateurish, seat-of-the-pants management style characteristic of so many family-run organizations. Sensitive to charges of nepotism, both men insist it is not a foregone conclusion that their companies will remain family dynasties. Akira's two sons and one daughter work for him, but he says it's unclear whether any of them will occupy his corner office when he retires. "It'd be good for them to become independent and start their own companies," he says. "That way, they could learn management know-how. Nothing has been decided." The only next-generation Mori to work in Minoru's firm is his daughter Kyoko's husband, Hiroo, who is a senior managing director. Though Minoru says he is pleased with his son-in-law's development as a manager, he won't confirm the widespread assumption that Hiroo is the heir to the empire. "I am open to management excellence wherever it may come from," Minoru says.

Indeed, Minoru would prefer that Mori Building not be seen as a family company at all—even though his and his older brother Kei's immediate families own 100% of the stock. He dislikes the label, he says, because his mission diverges from what he considers the standard priorities of a family-run firm. "What we are doing is not to make money for the family," he says, "but to create something that contributes to the society."

—By Jim Frederick. With reporting by Yuki Oda/Tokyo