Posted on Sun, Apr. 14, 2002
HOTEL DEVELOPMENT: The man behind the money
Love of flying turns James Ray's heart to UND
By Tu-Uyen Tran, Herald Staff WriterJames Ray is a name that doesn't ring a bell for most people, despite the millions he has poured into UND foundations and Grand Forks aerospace firms such as Cirrus Design.
Even as the driving force behind the university hotel, the biggest business deal of recent months, he still appears in print as little more than an appendix to the main story.
According to those who know him, that is the way the low-profile rancher, venture capitalist, aviation enthusiast and UND benefactor likes it.
When Ray gave $1 million to?
establish a chair of entrepreneurship at UND, one source recounted, he told school officials not to name it after him. The reason: He wanted to reserve the naming rights as encouragement to others.
But for some within UND's aerospace and entrepreneurship programs, Ray is a familiar figure. He is to those programs what Ralph Engelstad is to the school's athletics department.
The big players
The story goes that Ray, who now lives in Sun Valley, Idaho, first broached the idea of a hotel at UND to fellow aviation enthusiast Barron Hilton, who also happens to be the chairman of Hilton Hotels Corp. Both were staying at the Oshkosh, Wis., Hilton Garden Inn during the Airventure air show there.
Ray is said to have told Hilton, an aviation enthusiast like himself, that he thinks Grand Forks could use a high-end hotel and that he would invest if someone were to build one there.
Hilton pointed to a man picking up litter in the parking lot, saying that that was the Hilton Garden Inn brand's top developer. That man was Tom Arnot, the developer of the UND hotel.
Tom Kenville, a friend of Ray's and a vice president of the UND Aerospace Foundation, said Ray was impressed by Arnot's toil.
Later, Ray brought Hilton, Arnot, Kenville and Bruce Smith, the dean of UND's aerospace school, together at a meeting, and they decided to move forward with a hotel in Grand Forks. (Arnot would not decide on the location until a few weeks later.)
Big money
No doubt the fact that Ray visits Grand Forks regularly does tint his desire for a high-class hotel to stay in. But his main motivations are commercial and philanthropic, according to Bruce Gjovig, the director of UND's Center for Innovation.
Ray has told Gjovig and others that he intends to turn over his majority share in the hotel to the UND Aerospace Foundation. The plan, apparently, is to garner returns on his investment for a few years and then get a tax write-off when he gives the investment to the foundation.
It's a model Hilton is interested in because it could be replicated at other universities, Gjovig said.
This wouldn't be the first time Ray has invested in Grand Forks, however. He is also said to be the lead investor in Duluth-based Cirrus Design Corp., which has an aircraft component plant employing 188 in Grand Forks. Ray also has money in Vector Training Systems, a maker of flight training devices based in the Industrial Park. The Center for Innovation houses a branch of Ray's Aerospace Capital Group, a venture capital company.
In the past few years, Ray has put $8.3 million into UND foundations, which ultimately benefit the school. According to Gjovig, Ray is second only to Engelstad in his giving.
Recently, he gave $3 million to the Center for Innovation Foundation for entrepreneur program endowments.
Earlier, Ray gave the UND Aerospace Foundation $2.3 million to buy training aircraft, flight training devices and a Piper Cheyenne turboprop, the aerospace school's largest plane. He also gave $2.5 million to the UND Alumni Foundation for aerospace scholarships.
He even persuaded his friend Clay Lacy to start several full-tuition aerospace scholarships at UND.
And the thing of it is, Ray never went to UND.
Big enthusiasm
Kenville describes Ray as a huge fan of aviation, and that enthusiasm extends to those who excel in the field, such as UND's aerospace department.
Ray's love of flying came about during his time as a B-17 pilot with the 8th Air Force in England. During World War II, he completed 30 bombing raids over Europe. After retiring from the military, he continued flying, funding his hobby with earnings from a cattle vaccine, ranching and investments in high-tech companies.
At one point, he met the namesake of UND's John D. Odegard School of Aerospace Sciences and found the school to his liking. He has said that he would have been proud to have any of its students as his wingman.
"His focus is on the development of young people," said Smith. "He's very impressed by the work ethic and discipline of (UND) aerospace students."
According to Gjovig, Ray visits UND several times a year to talk with students and entrepreneurs as well as school faculty and officials. That's how Ray decides where to give, Gjovig said.
"Just to give you an idea, he came up here one weekend and actually stayed in West Hall with one of his scholarship recipients," Smith said. "He's a very personable guy. He really relates well with the younger people."
Mike Deniston, a UND senior and a recipient of one of Ray's scholarships, said Ray has a strong interest in the life of students. Ray would often take small groups of students to dinner, Deniston said, and just talk with them as maybe an uncle or a father would.
Kenville said Ray is sort of an adviser to everyone, including Gjovig and himself, because of his vast experience.
As a longtime venture capitalist, Ray is also fond of entrepreneurs, according to Gjovig; hence, the money given to entrepreneurship programs and the investment office at the Center for Innovation.
The hotel reflects Ray's twin passion for aviation and entrepreneurship, said Smith, as well as his fondness for UND.
Once built, it would help bring more business to the aerospace department and the rest of UND by its proximity to the cluster of aerospace buildings on the west end of campus, he said. At the same time, he said, it will kick start the technology park, giving investors a place to stay and do business.
Ray could not be reached for comment for this article. But Tuesday, when a ground-breaking ceremony is held at the site for the hotel, he'll be there. At least this time, as a dignitary, Ray will be out in front for a change.