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TMCNet:  Rod Kush now starting from scratch

[November 23, 2008]

Rod Kush now starting from scratch

(Omaha World-Herald (NE) Via Acquire Media NewsEdge) Nov. 23--From a single consignment shop where he provided floor space for people to sell their used furniture 20 years ago, Rod Kush built a modest furniture empire.

The former pro football player moved to larger and larger spaces, added new furniture to his showroom and eventually reported sales of more than $20 million a year. At one point, he had eight furniture stores in the region and a fleet of 20 trucks that made deliveries as far away as Kansas City, Mo.

He even had the mega-giant Nebraska Furniture Mart offering to buy him out, courted by Warren Buffett over dinner before walking away from the deal.

He lived well, too, spending $2.5 million to build a home in Gretna and owning another million-dollar home in Arizona.

Nicknamed "Rod the Krusher" from his football days, Kush relished being able to compete against the big boys.

"It's gone beyond my wildest dreams," he said just five years ago.

But now, the Krusher finds himself sacked by crushing, unpaid debts.

The chain of stores is gone. The Arizona home was sold. This past week, the Gretna home was auctioned off.

And as a businessman, he's really back where he began two decades ago, with a modest furniture consignment operation struggling to get on its feet.

Public records detail the depth of Kush's delinquent debt. Friends and former colleagues describe a man who works hard and is generous, but probably lacked the skills to manage a sprawling chain of stores.

The 17-room house that sold Tuesday is very much a symbol of Kush's rise and fall.

Built about a decade after Kush retired from pro football and returned to Omaha to sell furniture, the house has five bedrooms, 10 bathrooms, a six-car garage and a half-court basketball floor

in the basement. The 35-acre property includes an in-ground swimming pool and a three-hole golf course.

It was a property where Kush and his wife, Kathleen -- his high school sweetheart -- raised two sons, hosted a half-dozen charity events each summer and even stored props for Gretna High School theater productions.

By 2003, Rod Kush put a $3.2 million price tag on the $2.5 million mansion. A developer's plan to purchase and subdivide the property into residential and commercial lots collapsed earlier this year. The sale price in Tuesday's auction was $1.625 million.

Whatever Kush realized from the sale will go the same way as other funds:

--The money he got from liquidating the inventory and equipment after closing his Rod Kush's Furniture stores in Omaha, Council Bluffs, Lincoln, Norfolk and Fremont in April 2006.

--The proceeds from the $2.7 million in sales over the past two years of three pieces of commercial property in his 72nd and L Streets complex known as Rod Kush Plaza.

All that money went to pay down debt, Kush said in interviews.

TierOne Bank of Lincoln was Kush's primary lender and holds a deed of trust against his personal real estate to secure loans totaling about $15 million.

Counting only lawsuits seeking $10,000 or more, 13 companies, five of them furniture suppliers, sued Furniture on Consignment Inc., other Kush companies and sometimes Kush personally in the year after he closed his chain of furniture stores.

The suits, filed in various Nebraska courts, totaled more than $1 million. Nine plaintiffs have won judgments but only one appears to be collecting regularly, according to court records. Some expect they have little chance of seeing any money.

But some creditors continue to seek repayment, questioning how Kush has funds to operate a new, similar business if he doesn't have funds to pay them.

The creditors' demands hang over Kush as he tries to build his new consignment furniture business, 7 Day Furniture, in a building at 72nd and L Streets that he still owns.

He tried unsuccessfully to sell a mostly empty strip center at the complex Thursday, when a $600,000 bid failed to meet his undisclosed minimum price.

"Yeah, we started out with nothing . . . about five employees," Kush said of his two-year-old business. "It's slow going . . . but it's slowly coming back. We struggle like any other retail store right now with the economy."

The business is losing money, Kush said, but is what he calls "nearly profitable."

"That helps, because then we can take care of some of the . . . other people we've got to take care of."

Over nearly 30 years, the past 20 or so as an entrepreneur, Kush has established the kind of name recognition normally reserved for only a handful of people in a community.

After a successful football career at Omaha Burke High and the University of Nebraska at Omaha, Kush was drafted into the National Football League in 1979. After six years with Buffalo and two with Houston, he was released after a knee injury.

Kush returned to Omaha to pursue a promising business selling used furniture. He called his Furniture on Consignment business "Omaha's largest garage sale."

Within five years, Kush had moved the business twice, tripled his floor space and added new furniture to the mix. He appeared in television commercials and on billboards to advertise his Rod Kush's Furniture stores.

His main office was located on the same street as the Nebraska Furniture Mart, and he relished his ability to compete with the big boys.

"When you open up against (one of the) richest men in the world, Warren Buffett, on the same street, I think that's about as aggressive as you can get," he once said.

In fact, for one week in 1992, he considered selling to the Nebraska Furniture Mart -- a deal he hoped would keep him in charge but give him capital to expand. That's when he had his dinner with Buffett, whose Berkshire Hathaway owns the Mart.

Later, Kush said he disagreed with Mart officials about how that expansion would take place. Kush -- who coached youth football and basketball and was a Cub Scout co-leader when his sons were younger -- wanted to limit his travel.

He took up golf and built three holes, one lighted, at his home. "I can play when I'm home and not neglect my business," he said as he prepared to play in a Celebrity Skins Game in 1996. "You've seen guys who play too much and see their businesses go out from under them."

In 2003, he opened a carpet and flooring store near his original store and opened his third full-line store in Fremont and a carpet and flooring store in Lincoln. In November of that year, he announced plans to add eight stores in five Nebraska cities before the following summer and said he was searching for sites in three other cities.

Kush also got involved in performance tire and wheel stores, home remodeling and even a short-lived restaurant, Hot Rod's Cafe.

His TV commercials weren't the only thing that made him a familiar face.

He was one of the founding members of the Maverick Beef Club, formed to raise money for UNO athletics. He was often seen on the sidelines of Mavericks football games, where son Troy played this fall as a senior. Son Randy played at UNO, too, finishing his football career in 2007.

Kush and his wife, who was a UNO cheerleader, are members of the Chancellor's Club, a designation earned by donors who have given the university gifts totaling between $10,000 and $25,000. But the Kushes' giving fell off with the expansion of the business and subsequent financial problems.

UNO alumni annual reports show the Kushes gave annual gifts of more than $2,500 in both 2001 and 2002. But reported gifts in the five years that followed include only a donation of less than $1,000 in 2006.

Rod Kush also was involved in other types of fundraisers, such as home tours to benefit the homeless and charity golf games -- and a former teammate hopes people remember that.

"He's one of the most charitable people in this town," said Omaha Realtor Van Deeb, who played football with Kush at Burke and UNO. "That overrides a lot to me, when someone gives back."

But even when things appeared to be going well, there were controversies.

Kush publicly battled with contractors over a construction lien on his house, Gretna's decision to annex his property and Sarpy County's change in his greenbelt status for property taxes.

Then, in August 2005, Kush was the subject of unwelcome attention when he paid a $1,000 fine for procuring alcohol for a minor during his son's high school graduation party.

Kush said he'd taken precautions by hiring bartenders to dispense drinks, and he blamed "gate-crashers."

His attorney said Kush's business suffered because of the publicity.

Seven months later, Kush announced he was shutting down his furniture stores to spend more time with his family.

Friends and associates say he hasn't talked much about what happened, but they offer some insight, largely attributing his troubles to overexpansion.

Once Kush expanded to multiple locations, he had less day-to-day control and had to find good managers. Investment in expansion also can be risky in a business that demands big outlays for inventory while offering small profit margins, especially when buying the inventory on credit.

One partner during the expansion era was Paul Bryant, a former Kush teammate at UNO. They opened a store in Benson in 2003, but Bryant split with Kush within a year over Kush's desire to convert it to a rent-to-own business.

"It was a 49-51 partnership, and that was a quick lesson to me on how much 1 percent meant," Bryant said. "It was Rod's name. Rod had the experience. It was going to be Rod's way. . . . You don't work with Rod, you work for Rod."

Bryant said he still likes and admires Kush, but believes it was difficult for his old football friend to rely on and motivate employees as he grew from a mom-and-pop store to multiple sites. He said the stores suffered from high turnover and lack of training.

"As you grow in business, you have to grow in management," Bryant said.

But Bryant and other friends say Kush is not a quitter -- one reason they say he is still working to clear his debts.

"I know he's trying to make it good, working hard," one friend said. "What built that business is hard work. He's a survivor."

In fact, Kush is largely back where he was when he started -- as a small seller of used furniture. He recently likened his new business effort to his first.

"I started my other business 21 years ago on $5,000, and $3,000 of it went to a truck."

The new business is a consignment operation that he said frees him from paying money up front.

Kush said he likes his new, smaller business, preferring the wheeling and dealing of buying and selling furniture and wrestling the goods around the loading docks himself.

"This is a lot easier," he said. "I have 30 employees instead of 250. I just couldn't do 250. I couldn't do eight locations."

When he had eight stores, he spent most of his time traveling, Kush said.

Now, he said, he reads garage sale ads and prowls neighborhoods looking for used furniture.

Also at the 72nd and L Street location, he rents warehouse space to weekend flea market vendors and operates a payday cash-advance store and a rent-to-own business. He has a cash advance store and three rent-to-own outlets at other locations.

He scoots between and through buildings on a Segway -- a concession to that old football injury.

Kush said he aims to "just kind of continually grow."

He summed up his approach to his big debt load this way:

"Well, just take care of who you can take care of. You just keep working it. I'm doing everything I can to take care of the people that I have to, the ones that scream loudest, you know.

"The Lord willing, I'd like to pay everybody off, which is just kind of a slow, slow process. If the Lord lets me, great. If he doesn't . . ."

World-Herald staff writer Erin Grace contributed to this report.

--Contact the writer: 444-1081, virgil.larson@owh.com

To see more of the Omaha World-Herald, or to subscribe to the newspaper, go to http://www.omaha.com.

Copyright (c) 2008, Omaha World-Herald, Neb.
Distributed by McClatchy-Tribune Information Services.
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