A. H. Zeppa Family Foundation poised to become one of the largest foundations in the region

Alan Zeppa has played a variety of characters in Renegade Comedy Theatre and Duluth Playhouse productions, but he wasn't typecast for his current real life role - millionaire philanthropist. Zeppa, 58, has used his recent inheritance to set up a private foundation that is poised to become one of the largest in the region.

“I'm kind of a weird middle-class guy,” Zeppa said. “I've only partaken of the family fortune in the past few years.”

Zeppa has a PhD in family studies and spent 10 years as an instructor and assistant professor at the University of Minnesota Duluth, South Dakota State University and Iowa State University. In Fall 2004, his stepfather, Peter S. Hurlbut died at his home in Woodside, CA. Hurlbut, a cabinetmaker and founder of P.S. Hurlbut, Inc., had held on to stocks acquired by Zeppa's late father Frank more than 50 years earlier.

Frank Zeppa worked for United Parcel Service of America from the late 1930s until his death in 1953. He worked his way up from a position as a driver to become one of the company's top executives. He accumulated greater holdings in UPS than anyone on its board of directors, Alan said.

UPS, of course, is the world's largest package delivery company. In late 1999 it raised $5.27 billion in net proceeds by issuing 109.4 million shares of its Class B common stock to the public. At the time it was the largest initial public offering (IPO) in Wall Street history. The company has used the proceeds to buy back some of its A-1 shares, held by employees, retirees, foundations and heirs of the founders.

Alan Zeppa said the A. H. Zeppa Family Foundation has $5 million in assets, but a lead trust of $45 million will add $4 million in assets annually to the foundation over the next 10 years. He plans to distribute about $2 million in grants each year to arts organizations and what he calls “groups that make liberalism a good thing again.”

The Blandin Foundation is the region's largest foundation, with assets of more than $380 million and payouts of nearly $30 million in annual grants. In total, there are four foundations in the region that pay out more than $2 million in annual grants; all have assets in excess of $30 million (chart, facing page).

Zeppa's foundation already has made contributions to the Marshall School, Renegade Comedy Theatre and First Unitarian Church of Duluth. It also made a $2.5 million low-interest loan to Whole Foods Co-op for construction of its new grocery store at 610 E. Fourth St. in Duluth's East Hillside.

The foundation's 2006 tentative budget allocates $500,000 of what Zeppa plans as a $1 million commitment to fund about half of the costs associated with building a new First Unitarian Church on College Street between the University of Minnesota Duluth and College of St. Scholastica campuses. Another $500,000 is designated to fight global poverty and hunger.

Zeppa said he also hopes to open a 100-seat black-box theater on the second floor of the Duluth Plumbing Supply Co. building at 332 W. Michigan St. by summer. It would serve as the new home of Renegade Comedy Theatre and also be used by the Harbor City International School. It occupies space on the building's third and fourth floors.

The potential new theater space, adjacent to the former Horton's Gym, was used occasionally for boxing events while the gym was located there.

Lease negotiations began last month, and Zeppa said he is confident a deal will be reached.

“All the entities are committed to making this work,” he said. “The space has a very industrial feel. I think that's a good thing, for now. It'll be a work-in-progress when it opens. It'll get more sophisticated over time.”

Brain Matuszak, Renegade Comedy Theatre artistic director and executive producer, plans a 2006 season with shows that can be staged in either the new space or alternative venues, if necessary. Matuszak said Renegade left its former space at 404 W. Superior St. one year ago partly to avoid the costs of rent and keep from sliding deeper into the red. The 15-year-old nonprofit held shows at a variety of venues in 2005 and received a $30,000 grant from Zeppa's foundation. After a successful Holiday show, Renegade has a cash surplus of more than $10,000, Matuszak said.

“That will allow us to grow even more,” he said. “Al's foundation has been a godsend to us.”

Zeppa said Renegade can use the new space rent-free for two years and will receive funds to create a marketing position to promote its shows. Chris Hazelton, director of Harbor City International School, a public charter school serving grades 9-12, said the new theater will be great for the school's theater program. It may open opportunities for other events, such as live music and independent films, he said.

“We also do a lot of simulations- mock trials, tribunals, simulations of historical events - so we want a professional theater space to facilitate that,” he said. “We also see ourselves kind of poised to help out the all-ages music venue problem in town. We have a lot of students who would look for that kind of thing, and we think it's a really important service to provide.”

The foundation's original plan was to purchase the NorShor Theater, but Zeppa said negotiations with owners Eric Ringsred and Arno Kahn fell through.

A feasibility study by Wagner, Zaun Architecture and Scalzo Architects in Fall 2005 estimated total costs to revamp the NorShor at $2.2 million. Most was to fix mechanical elements (fire alarms, plumbing, heating) and update the building's exterior (roof, masonry, marquee).

Zappa said only about $1 million of those repairs would be totally necessary, but the owner's steep asking price and reluctance to relinquish control of the building led him to seek other options.

“The vision got kind of big for a while,” Zeppa said. “The project was getting more and more expensive. My goal is sustainability. I want to make a long-term difference.”

Paul Lundgren is a Duluth freelance writer.