Herman J. Russell passes torch: construction icon steps down from CEO post and transfers reins to youngest son.

The torch was passed at one of the nation's largest black-owned companies, H.J. Russell & Co. (No. 11 on the BE INDUSTIIIAL/SERVICE 100 list), when Founder and Chief Executive Officer Herman J. Russell stepped down and handed the reins to his youngest son, Michael, at the end of last year. While the elder Russell, 72, remains chairman of the Atlanta-based firm, tire younger Russell, 38 (who was named to BE's December 2003 Hot List), now manages the firm's day-to day operations.

Russell founded the company in 1952 as H.J. Russell Plastering Company. Since then, the firm has grown to offer a range of services from construction and general contracting to commercial real estate development. In 1979, he launched Concessions International, a food and beverage enterprise that operates in airports nationwide. Russell's legacy includes city landmarks such as the Georgia Dome, Coca-Cola headquarters, and Hartsfield International Airport's main terminal. In 2002, the combined revenue for H.J. Russell & Co. and Concessions International topped $300 million.

The main reason behind Russell's decision to relinquish his role as CEO was timing. "After more than 50 years, it's time to move and let new leadership take over," he says. However, this is not the first time he has stepped down as CEO. In 1996, he tapped business associate and outsider R.K. Sehgal to run the firm. That arrangement lasted until 1998; the two failed to see eye-to eye on the vision for the company. "It didn't work out as well as I was hoping, so I had to come back in and take over," he says.

There were some industry inquiries as to which child Russell would pick to succeed him since he has two sons and a daughter who are executives with the company. "We had been talking about this for the last six months," says Michael, who has served as the company's executive vice president since 2000. "We sat down as a family and looked at [what our] strengths, passions, and interests were. And from that, [Herman Russell] carne to a decision."

Michael's older brother, H. Jerome, 41, has served as president and chief operating officer since 1994. He continues to serve as president, but plans to devote his time to building the company's real estate development arm. Their sister, Donata Russell Major, 44, now runs the Herman J. Russell Foundation, having spent 18 years working for Con cessions International: Major is the vice chairman, while Michael serves as CEO.

"Whenever a change in leadership takes place, there are ramifications for the company involved," says Alex Finkelstein, a writer who covers the commercial real estate industry for real estate news provider Globe-St.com. But in choosing his son to succeed him, Russell may avoid many of those problems, Finkelstein says, because family successions are always easier--as long as everybody is getting along, he adds.

The younger Russell concedes that there will be changes: "I'm a new leader who will bring my own perspective to issues and how we move issues forward." Part of his and his brothers vision is to expand the company's focus on urban revitalization in and outside areas in Atlanta. One project, for instance, is the restoration of an 11-acre tract of vacant land owned by the city of Newark New Jersey. H.J. Russell & Co. and a local developer plan to build apartments, condominiums, and a retail strip.

Michael also hopes to streamline certain processes. "One of the things we are doing is looking at the support services throughout the organization," says Michael. "An outside consultant is helping the management team [stay] in line with market costs."

Overall, Michael does not expect the transition to be painful. "I think we're blessed in that we still have the nameplate of this organization. Herman Russell is still alive and well, and though he will not be engaged in this company day to-day, he will still be a resource for me and for others in the company who will need him."