John Paterakis Scored Big With Hamburger Buns, Then Real Estate

By James R. Hagerty 

John Paterakis made two audacious bets -- one on demand from McDonald's Corp. for billions of hamburger buns and a second on the potential for real estate near Baltimore's once-desolate Inner Harbor. Both paid off.

In the 1950s, Mr. Paterakis began running a tiny bread-baking business started by his family in the basement of a Baltimore rowhouse. He invested heavily in automated production and became the largest supplier of buns to McDonald's in North America. In the 1990s and early 2000s, he led a redevelopment east of the harbor featuring a Marriott hotel, offices, restaurants and stores. He also liked poker but was more cautious in that game.

Mr. Paterakis died Oct. 16 of a bone marrow disorder, at a Baltimore hospital. He was 87.

When Mr. Paterakis began a $1.5 million investment in automated bun production in the mid-1960s, he didn't have any guarantee McDonald's would adopt him as a supplier. He did believe aggressive expansion was the best way to survive. "You've got to keep spending money to keep updating to remain competitive," he told the Baltimore Sun. "If you don't keep up, the big fish will eat you."

Mr. Paterakis's Harbor East real-estate project had its roots in the 1980s, when another developer working in the area hit financial trouble. Baltimore officials urged Mr. Paterakis to buy the land. Though he had only modest experience in real-estate development, he proceeded with an ambitious building plan and initially funded the project without bank loans or confirmed tenants.

"I play poker sometimes, sure," Mr. Paterakis told the Sun. "But, look, when you play cards, you can lose $100 or so. But when you build a hotel, you could lose $100 million."

John Paterakis was born into a Greek immigrant family in Baltimore on March 2, 1929. After high school, he served in the Navy in the late 1940s. He considered going to college and pursuing a career in journalism. When his father's health deteriorated, he changed plans and started running the family baking company.

"After a while, I was making $20,000 a year, and that was a lot of money in the 1950s," Mr. Paterakis said. "So, I thought: Why go to college with this kind of money coming in?"

He developed close ties to state and local politicians and once got into trouble for his contributions to them. In 2009, he was fined $25,000 for exceeding Maryland's donation limits. "John Paterakis accepts full responsibility for his mistake," his lawyer said at the time.

He enjoyed Saturday lunch and cigar-smoking sessions with friends and often hosted poker nights at his home. At those card games, guests might include an officer of McDonald's and a guy who ran a pizza parlor, said Richard Alter, a longtime friend and business partner of Mr. Paterakis. Mr. Alter described his friend's poker style as "thoughtful and careful" and said he worried more about whether his guests were having fun.

He is survived by his wife, Roula Passon. An earlier marriage ended in divorce. He is also survived by a sister, six children, 19 grandchildren and two great-grandchildren.

Write to James R. Hagerty at [e-mail]

(END) Dow Jones Newswires

November 11, 2016 10:14 ET (15:14 GMT)

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