Handing Down the Family Farm: Branching Out

By Kate Campbell

Managers of Leavens Ranches, from left, David Schwabauer, Leslie Leavens-Crowe, Paul Leavens Jr. and Link Leavens.

In the afternoons wind blows in from the Pacific Ocean and across Ventura County. It rattles the leaves in the lemon and avocado groves of Leavens Ranches. Then it sweeps up the Santa Clara River Valley and into the canyons, crackling the native grasses, dissipating in the chaparral.

In the valley, whispering leaves recall happy childhood memories for Leslie Leavens-Crowe as she looks out her office window at the lush groves surround the headquarters of Leavens Family Ranches.

She sits in a restored Victorian that her grandparents once called home and talks about why she's partial to avocado trees and what they—and the peskier lemon trees—mean to her family.

"This is where we had every Sunday dinner," she explained of her surroundings. "We ate in the dining room, where my brother, Link, has his office now. Christmas was always here in the living room, where I have my desk.

"When I was growing up, this ranch was planted half in avocados and half in lemons. My sister Heather and I used to go out and climb the trees. We had our favorite climbing trees. Avocados are great because the branches are inviting and you can find comfy places. We used to bring books to read, like Nancy Drew mysteries, and peel back the shoots of new growth to taste the licorice flavor."

Leavens-Crowe said that being surrounded by those trees—with their strong branches and big leaves—always made her feel safe and protected.

"As I was growing up, I didn't realize how special these trees were or how beautiful this valley is," she said. "We didn't have an understanding of any other place. Our social life was church, school and each other."

The family's groves are part of a vibrant farming area that produces a major share of the $176.3 million lemon and $124.6 million avocado crops grown in Ventura County. The Saticoy Lemon Association, the world's largest lemon cooperative, is located near the Leavens Ranches' headquarters and family members serve on the association's board of directors.

The Leavens family has owned farm ground in Ventura County since 1910 and has produced lemons and avocados since the 1950s. In 1990, they expanded their operation into Monterey County.

Today the family has more than 1,000 acres in production, and a new generation of Leavens family farmers—the nine-member "cousin generation"—is in the process of taking responsibility for governing and managing their increasingly complex farming and ranching activities. They represent the third generation to actively farm the family's land.

They understand that only about one business in 10 successfully survives the ownership transition to the third generation. And as baby boomers, they recognize that the shift of their family's assets is part of a larger generational transfer of wealth going on across the United States.

This transfer is conservatively estimated at more than $26 trillion. Experts say it's the largest transfer of wealth in world history.

The challenge of multigenerational owners
What's unusual about the Leavens family is that they've decided to keep the ranches together and in operation rather than sell—and they've developed a comprehensive, multigenerational plan to remain in farming.

They've come together during the past decade to hammer out relationships and mutual understandings that go beyond the business of producing beautiful fruit. They've been creating the roots that will secure and hold the family tree together for generations to come.

Along with the Leavens parents, there are nine cousins who own Leavens Ranches. Three of them—Leslie Leavens-Crowe, Link Leavens and David Schwabauer—operate the ranches day to day. The other cousins represent myriad occupations, from owning an art gallery to practicing international diplomacy, and they provide oversight and accountability.

Schwabauer, whose mother was among the generation of four siblings who greatly expanded the Leavens Ranches' operation in the 1950s, said, "The bigger issue for us is the challenge of having multigenerational owners. You have to make sure there's a climate where the generations agree on a strategy to move the business forward before you go to an attorney to draw up documents."

To do that, the Leavens family comes together at least once a year—all 50 or so extended family members—to make sure everyone is heard and their interests considered. The gathering includes the current farm owners (World War II generation), the management generation (baby boomers/cousins) and their spouses, followed by the new generations of children and grandchildren.

Every summer they come to Ventura from all over the nation and a few foreign countries. The family plans a week of fun, financial analysis and business seminars. The teenagers have their own activities aimed at helping them increase their understanding of what the family business is about and how the ranches operate, as well as an appreciation for farm work. The new generations participate in organized play on the ranches through an informal day camp program.

"To make these gatherings work, you need someone to help facilitate a family meeting," said Schwabauer, who is a director of the California Farm Bureau Federation and former president of Ventura County Farm Bureau. "That's why we work with consultants, like Caroline Berry at Next Step in Dinuba, to make sure everyone feels heard and there's buy-in for our business plans.

"What we want to achieve is a shared vision for the ranches," he continued. "We knew if we couldn't do that, we would be forced to break up the base of what makes our farming operation viable. Gaining that shared vision takes a long time. We've been working on this issue for about 10 years.

"What we came to realize is that the ranches are a vehicle for bringing our family together. They allow us to stay together at a time when other families aren't doing that. We discovered how important the ranches are for our family."

'Building the bridge as they walk on it'
Pat Lattore, a visiting professor at the University of Southern California School of Medicine, is an expert on business leadership and organizational change dynamics. He also serves as a core faculty member of the California Agricultural Leadership Program and consults with a diverse group of career professionals in the fields of medicine, agriculture, theology, education and business.

Lattore has worked with the Leavens family for several years to help them understand both the business issues and family dynamics that impact the success and ownership of Leavens Ranches.

"Based on my experience, there seems to be a keen interest in information and techniques for passing down the family farm," Lattore said. "Estate planning professionals say that estate plans often are mechanical—developed within current tax and property law.

"They say if property owners want their assets to continue to the next generation, they have to decide what they want—liquidate and divide, form a partnership with key members of the next generation, form a family corporation. Basically they have to design a succession plan."

Lattore said those types of decisions must be made before accountants, investment advisors and lawyers can develop an estate plan to help realize the owner's vision for handing down the family farm. He said there are experts on estate planning and the legal aspects of succession planning, but there are very few people skilled in the human dimension of succession planning that helps a family business survive.

"That's where you deal—not with the facts of the business plan—but with the idiosyncratic issues of personality, family history and dynamics and what you might call multiple, competing personal interests," he said. "Understanding that aspect is an important process. You can't make it to the next generation until you can solve the problems of this generation."

The Leavens family is doing what Lattore calls "frontier work" in organizational planning and development.

"They're building the bridge as they walk on it. They took what is known about organizational development and individual leadership development and some of the stuff known about families, whether they own a business or not, and developed the foundation for an organizational plan.

"This is cutting-edge stuff. There are consultants who came in for different pieces of their plan, and I was one," Lattore said. "There really isn't a single source of guidance for what the Leavens family is doing."

What they're doing, family members say, is consciously planning the future transfer of assets and the continuation of farming on their land for at least two generations beyond the current cousin level, or potentially they're designing a roadmap for 150 years out.

Planting love and understanding
One of the Leavens family avocado ranches sits on a hillside overlooking the Salinas Valley near Gonzales. Last summer one group of teenagers planted new trees while another painted them to prevent sunburn. A third group set drip sprinklers to make sure the newly planted trees would be properly watered.

They look like any clean-cut bunch of teens, but there's more to their story. They're second and third cousins—the next generation that will make decisions about the Leavens family ranches. To prepare them, the family has developed a paid summer internship program that gets the teens involved in day-to-day ranch work.

"I'm out here to spend time with my cousins, but it's not just for fun," said Elly Nicholson, 17, who lives with her family in Bellevue, Wash. "It's a learning experience and it gives me a chance to develop relationships that will become even more important as we become adults."

Elly, the daughter of Helen (cousin level) and Paul, said her parents have helped her prepare for a future that will include oversight of the Leavens Ranches. For example, she explained that her parents placed her in a Spanish language immersion program at school so she will be bilingual.

"I've been to Mexico, Honduras and Costa Rica," Elly said. "Being able to speak Spanish has helped us make friends here on the ranch and I expect to speak Spanish a lot as I become older.

"Being fluent allows for a better understanding of how things work here. Link (cousin level), who is the general manager of Leavens Ranches, speaks Spanish on the ranches and we see that a lot of our farming activities are conducted in that language."

Elly's cousin, Carl Cook, 18, said he has participated in the ranches' internship program for the past couple of years because he wants to earn extra money, but added that the experience has helped him "put things in perspective."

Carl, who lives in Chicago, said, "I've been coming to the ranches all my life, but had never seen the working side of things—how the ranches are laid out and what it takes to make them work. It's important for me to understand how things work from the ground up."

Carl will be attending St. Lawrence University in New York in the fall and wants to go on to medical school after that.

"The ranches allow us to be together as family and I hope that my kids and my grandkids will have some relationship with this land and that we'll be able to continue to farm," he said. "I'm at the learning stage right now, but I hope that when the time comes, I'll be able to make the big decisions about the ranches that my parents are making now."

(Kate Campbell is a reporter for Ag Alert. She may be contacted at kcampbell@cfbf.com.)

Reprint with credit to California Farm Bureau. For image use, email agalert@cfbf.com