Gold storage.

AuthorMartin, Edward
PositionMorningstar Group Inc.

NORTH CAROLINA SMALL BUSINESS OF THE YEAR

Morningstar Group Inc.

Headquarters: Matthews President: Stephen Benson Employees: 14 Year Founded: 1980 Projected 1997 Revenue: $14.7 million Business: Self-storage

Cashing in when its customers cache out, Morningstar shines as Small Business of the Year.

At the wheel of his Chevy Suburban, David Benson negotiates rows of blue and gray buildings south of Charlotte, noting, among other things, a folded tangle of wire mesh and metal framing, stacked nearly as tall as the rooftops. "That belongs to the wrestling federation." He nods without stopping. "They use it for their Rage in the Cage."

Around another corner, he rolls up to a building, parks and hoists a metal garage door. Staring out is a gleaming 1940s American LaFrance fire truck, flanked by an equally polished 1954 Mack with black helmets lined along its side. "My dad collects these things," says Benson, 30, with a grin. "The joke around our house is that this is why we got into the storage business."

Not likely. Seventeen years after Stephen Benson, now 58, decided to apply a serious, button-down approach to the rag-mop self-storage industry, Morningstar Group Inc. is the largest storage chain in North Carolina and fourth-largest independent one in the nation.

Few Tar Heels know Benson, but many know his whimsical humor. A fresh example appears every Monday on Morningstar reader-board signs at its storage sites, nuggets such as "Help Stamp Out Soft Cookies" or, after Charlotte cops arrested a religious charlatan, "We Bagged The Baghwan!" The quips began as a marketing gimmick, he says, and to inject a sense of fun. Cardinal rule: "We never talk about ourselves."

Guided by a small corps of executives - among them Benson's old friend from South Africa, Neville Christie, a collector, too, whose 1942 military halftrack shares a bay with the fire engines - Morningstar Group Inc. has built a record that entitles Benson to indulge a whim or two. Revenues through September were 18.8% ahead of last year's and should exceed $14 million this year. In some towns, notably Lexington and Monroe, Morningstar is the attic away from home for fully 2% of the population.

Benson, who was initially "turned down by the best banks in town," now turns away financial suitors. Among them have been two of the four giant, national self-storage real-estate investment trusts that, riding Wall Street's sudden fondness for self-storage, raised $1.5 billion last year to shop for companies like Morningstar.

For such reasons, Morningstar Group wins BUSINESS NORTH CAROLINA's second annual North Carolina Small Business of the Year award, sponsored by Greensboro-based United HealthCare of North Carolina. The judges were John A. Allison IV, chairman and CEO of Winston-Salem-based BB&T Corp.; Bill Moore, chairman of the managing committee of last year's winner, Raleigh-based Trident Financial Corp.; Michael Murphy, a managing director of Trident; and BNC Editor and Publisher David Kinney.

Headquartered in Matthews, east of Charlotte, the 14-employee Morningstar Group is a management company. Its principal operating division is Morningstar MiniStorage, which has about 40 ministorage warehouses, each operated by a full-time manager. The division has 200 employees in all, two-thirds of whom are part time.

"Morningstar is amazing," says Hardy Good, president of MiniCo Inc., an Arizona trade-journal publisher that recently chose a Morningstar site in Pineville as the best ministorage operation in the country. "The way their facilities are constructed is superior to most in the self-storage world, and the professionalism of their people exceeds just about everybody in the business."

The company, adds Robert Brown, director of the 1,700-member National SelfStorage Association in Cincinnati, has relied on innovative management and fresh ideas to prosper in an industry that, when Benson started, was known for dingy back lots, gravel roads and offices that smelled like yesterday's lasagna. Really. Managers, usually couples, typically lived on site, and it wasn't unusual for customers to be greeted by housewives in curlers or husbands who couldn't fill out leases. "When we came into this, we didn't like what we saw," Benson says. "The only way we wanted to be involved in the business was to change it."

Morningstar, which operates exclusively in the Carolinas, has grown to 2.7 million square feet of storage space in 20,288 units. Charlotte has 10 locations, the most, but others are scattered from Winston-Salem to Greensboro to Raleigh to Wilmington to Charleston to Spartanburg. The company wants to double in size in five years. "That's a big order, but we'd like to have a total of 80 sites," says David Benson, vice...

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