Skip to main content

Jacob Ghermezian, a Persian rug merchant who moved to Canada to stitch together a family business empire that is worth billions of dollars and includes the giant West Edmonton Mall, died yesterday in an Edmonton hospital.

Although the secretive family kept its myriad business arrangements private, the elder Mr. Ghermezian, known as Papa, could be seen by shoppers through much of the 1990s motoring around the massive mall on a battery-powered motor scooter. He died after a year-long illness at 97.

A rug merchant and developer, he founded the family business in the 1920s in his late teens in what is now Iran.

He rose to such prominence that his apartment complex in the capital, Tehran, played host to a historic 1943 meeting between Franklin Roosevelt, Winston Churchill and Joseph Stalin that set the stage for the invasion of Nazi-occupied Europe and other Allied actions in the second half of the Second World War.

But Mr. Ghermezian, his wife and four sons left Iran in the 1950s during a period of political intrigue and economic instability.

They have always maintained a strict silence about why they decided to leave.

The family lived temporarily in New York before moving to Montreal "because they felt Canada was a good place to do business," said Travis Reynolds, a spokesman for West Edmonton Mall and the family's Triple Five Group of Companies.

The elder Mr. Ghermezian set up shop initially in Montreal and the family began moving in the mid-1960s to Edmonton, where they snapped up real estate at bargain prices before the oil boom of the 1970s.

While far from penniless when they arrived in Canada, the Ghermezian family knew how to pinch pennies so they could invest as much money as possible to expand their businesses.

They jammed into one home in Edmonton in the early 1970s, even as the family expanded with the arrival of several Ghermezian babies.

West Edmonton Mall, built in stages in the 1980s for $1.1-billion, is the most visible symbol of their wealth.

It includes an amusement park that at one time had more submarines than the Canadian Navy, indoor roller coasters and a full-sized indoor skating rink where Wayne Gretzky and the Edmonton Oilers practised regularly during the hockey team's heyday in the 1980s.

The Ghermezians also have a 22.5-per-cent stake in the Mall of America in Bloomington, Minn., which opened in 1992. The Minnesota mall recently unveiled expansion plans that would catapult it ahead of West Edmonton Mall for bragging rights as the world's largest shopping centre.

As their wealth grew in the 1970s and 1980s, they bought houses around the original family home and reportedly built secret tunnels to connect them. The Ghermezians have declined to comment over the years on their living arrangements, citing security concerns.

At a memorial service today in Edmonton, family and friends from around the world will pay their respects to Mr. Ghermezian. The service will be held at Edmonton's 300-seat Chesed Shel Emmeth funeral chapel at noon, local time.

While the mall is open on Saturdays, Mr. Ghermezian was a devout Hasidic Jew who "respected the Sabbath. He didn't personally conduct any business then in terms of making phone calls or doing any of those type of things. He spent time with family. The whole family is like that," Mr. Reynolds said.

The family patriarch spent some time in hospital in February and was re-admitted in December, he added.

"It was old age. He was sick," Mr. Reynolds said. "People are saddened by the passing of a great leader at West Edmonton Mall. He will be missed by everyone here."

Mr. Reynolds added that "Papa" Ghermezian, who had been in hospital for three weeks before he died in his sleep at 6:30 a.m. yesterday, was also a philanthropist who helped establish numerous schools for poor children in North America and abroad.

Industry sources said the four Ghermezian sons -- Nader, Eskandar, Raphael and Bahman -- reassured their father last year that the shopping centre would be kept under the family's ownership.

The family also faced some controversy.

Government-owned Alberta Treasury Branches launched a $450-million lawsuit against West Edmonton Mall in August, 1998, alleging that the Ghermezian brothers bribed ATB's former top executive, Elmer Leahy, to approve a $418-million loan package to the shopping centre in 1994.

The Ghermezians and Mr. Leahy denied the allegations and have filed countersuits.

ATB accused the mall's owners of running a retail complex "that's stuck in the 1980s." The Ghermezian brothers have repeatedly maintained that West Edmonton Mall doesn't deserve such criticism.

The legal dispute made the family even more reclusive, although they have designated Nader Ghermezian to take the lead in formulating statements to the media occasionally to counter ATB's allegations.

A statement issued yesterday on behalf of the Ghermezian brothers praised their father for starting "Triple Five's corporate tradition of diversified growth . . . As early as the 1920s, he created a mixed-use complex that consisted of a retail mall and apartment and office tower with a recreational component."

The statement credited the elder Mr. Ghermezian with creating 50,000 jobs during his career.

"Under his guidance, Triple Five has become one of North America's most visionary and diverse group of companies," overseeing ventures ranging from suburban development and amusement parks to hotels and real estate, the statement said.