As a child, Mike Whalen tinkered with a Lionel train set. Now he plays with hotels, restaurants and giant retail complexes.
“This is the ultimate train set out here,” Whalen said, standing at the future site of Prairie Crossing, a 230-acre planned retail, commercial and residential development in Altoona.
Whalen is president and CEO of the hospitality and real estate development company Heart of America Group, which owns and operates more than 40 restaurants, hotels and retail outlets in seven states. He started the company in 1978 when he and his wife opened the The Machine Shed restaurant in Davenport.
He’s spent nearly 40 years in hospitality, but Whalen said he’s held on to his sense of childlike adventure. While business is serious, Whalen said he feels sorry for those who don’t get to have fun with their work.
“I realized one day when we were about to open one of the hotels that it’s like my big train set, but I get to pick a whole bunch of people to play with,” he said. “The restaurant business is too hard of a business. If you don’t have some fun with it, it’s really a grinding business. So we’ve managed to find fun in it.”
Heart of America will take on one of its most ambitious years yet in 2016. Aside from franchising its self-created restaurant concept, Johnny’s Italian Steakhouse, the company will break ground on an 11-story, art-centric hotel in Fort Worth, Texas, and open its largest hotel yet, a 200-room Embassy Suites in Olathe, Kansas.
In Des Moines, Heart of America will continue work on its AC Hotel in the East Village, which is set to open in late 2016 or early 2017.
And the company’s blockbuster project, more than a decade in the making, appears to finally be getting off the ground in Altoona.
The 230-acre site, adjacent to Bass Pro Shops Outdoor World, is planned to eventually house restaurants, retail, hotels and as many as 500 homes. And separate developers will get dirt moving on a 325,000-square-foot open-air outlet mall on 34 acres in the heart of the property this spring.
“It will be our busiest year, absolutely,” Whalen said. “You’re either growing or dying, there’s no status quo.”
The man in the red-checkered shirt
Whalen never envisioned a career in restaurants. His father was a lawyer, and he figured he would be one, too.
After earning a political science degree, he went on to Harvard Law School. But he was quickly turned off during a summer internship at a Beverly Hills firm.
He liked studying the law, but realized he didn’t want to be some office-bound attorney filling out endless piles of billings.
Still, he graduated and passed the Illinois Bar Exam. By that time, in 1978, his father had gotten involved in a small failing restaurant off Interstate 80 in Davenport. He was the landlord, but couldn’t find anyone to take the isolated building.
“I was dumb enough to say, ‘Well, you know, I’ll open a restaurant,'” Whalen said.
A business partner suggested a country theme for the rural restaurant. The Machine Shed’s philosophy was wrapped around a five-word constitution: “Dedicated to the Iowa farmer.”
Even in the lean early years, Whalen says the concept focused on using simple, yet quality ingredients: real butter, real whipped cream and soups made from scratch. Just like on the farm.
“I remember people asking me what the little bumps were in the potatoes, because they never had real mashed potatoes,” Whalen said.
During those days, the Harvard law grad wore a red-checkered shirt and a farmer hat. He worked in every aspect of the restaurant and some days lasted 18 hours, he said.
Building a hospitality empire
Now, Whalen oversees a business empire that includes more than 1,500 employees. While juggling new hotel and restaurant developments, Heart of America also operates its own restaurant concepts, including six Machine Sheds, as well as Thunder Bay and Johnny’s Italian Steakhouse.
The company operates multiple hotel brands, including Holiday Inn, DoubleTree and Hilton Garden Inn and boutique brands, and it continues to expand its footprint in retail development.
The company includes architects, a design team and a construction crew to oversee new projects from conception to the time they’re handed over to the operations team.
Most of Heart of America’s projects include at least one special touch: The newest Embassy Suites in Kansas will feature a custom outdoor sculpture. Johnny’s Italian Steakhouse in Altoona includes a specially designed pier overlooking a pond.
Whalen even once imported palm trees to a West Des Moines hotel that were promised to weather Iowa’s winters (they ultimately didn’t survive).
“I think the thing we like about it is we don’t crank out prototype, cookie-cutter things,” Whalen said. “At this stage in our business careers, we’re trying to do something that we think is cool. They’re kind of like toys to us — big toy sets.”
Des Moines real estate developer Jake Christensen said Heart of America is unique in its in-house ability to develop and operate its businesses. Christensen, who moved the historic Row House to the East Village, said the new AC Hotel project will bring much-needed lodging to the neighborhood and help fill in a gap at East Fourth Street and East Grand Avenue.
One-time political aspirations
Whalen has built up a semi-national profile over the years, both for his business and his politics: Inc. Magazine named him Entrepreneur of the Year in 1991. And he served on the board of the Dallas-based National Center for Policy Analysis, a free market think tank.
His interest in conservative politics prompted his 2006 bid for Iowa’s 1st District congressional seat.
After winning the Republican nomination, Whalen lost the general election to Democrat Bruce Braley. But he received the backing of some of the nation’s most influential conservatives. Presidential adviser Karl Rove, Vice President Dick Cheney and First Lady Laura Bush all campaigned for Whalen in Iowa that year.
Whalen, who never served in the military, said he felt public office could be his way of serving his country. He still follows politics closely, but says he doesn’t have another run for office planned anytime soon.
“I think it’s not a door that’s closed,” he said. “I think it’s just a door that I haven’t seen open.”
Besides, he has plenty on his plate, he said.
‘I’m not a patient person’
The Altoona site is poised to be Heart of America’s biggest development ever and one of the largest developments for the east side of the Des Moines metro.
Whalen purchased the farmland in the 1990s expecting public improvements to highways to spark a boom in the area, just off Interstate 80 and U.S. Highway 65. (Public investment in infrastructure also helped the company select the site for its newest Kansas City-area hotel.)
Heart of America started planning the Altoona project in 2005, and it seemed to have momentum by 2007, Whalen said, as several retailers expressed interest.
But then the economy tanked and prospective retailers pulled out. It was hard to sit by as the project stalled, he said, but the company could afford to be patient and hold on to the land.
“I’m not a patient person, I’m a persistent person,” Whalen said. “I’d be a liar to tell you I didn’t want it a lot earlier.”
For now, the sparse terrain is home to a lone Johnny’s Italian Steakhouse, which Whalen affectionately calls “the little house on the prairie.” It will soon be joined by a new Heart of America hotel, which will get started in the spring. And the outlet mall should be open by fall of 2016, he said.
For Whalen, these kinds of projects are more than just a means to payday.
“The train set I get to play with here is the coolest, the most dynamic, the most talented train set I’ve ever had. And we have the financial resources to make these things happen. Why quit playing?” he said. “Some people’s vision is to retire and play golf. My vision is to finish out Prairie Crossing in Altoona or go build a really cool art-oriented hotel in Fort Worth.”
Bigger things to come
Whalen spends weekends flipping through trade magazines and surfing the web for fixtures, furniture and construction ideas. When he travels, he’ll tour a few hotels to get ideas. And when he spots an interesting bathroom sink or a nice couch, he takes note.
“He’ll say, ‘Help me.’ And we’ll flip the couch over to look at who made it. He’s always immersed in that,” said Damen Trebilcock, Heart of America’s senior vice president.
While Whalen likes getting involved in the details, employees say Whalen doesn’t micromanage. Instead, he tries to breed a sense of adventure and entrepreneurial spirit among the ranks.
“Mike’s always had that attitude of let’s go, dream big and what else can we do?” said Tony Shepherd, chief operating executive at the Holiday Inn Hotel & Suites in West Des Moines.
Shepherd, who has worked for the company since he started as a cook in 1985, said he’s constantly amazed by Heart of America’s growth.
“This probably is going to be one of the biggest years that we’ve had,” he said, “and what’s funny is I don’t see that changing. I think 2017 will be an even bigger year.”
Education: political science degree from the University of Illinois and law degree from Harvard University
Family: Wife, Kim; son, Chris; and daughter, Katie. Kim and Chris work with Whalen at Heart of America Group
This article was originally posted on the Des Moines Register as part of the ‘15 people to watch in 2016.’