Articles

He Likes Being Alarming

By Adam Stone, October 2002

Kenneth Gross could have quit in 1989 at just 36 years of age. At that time, the founder of Tri-State Alarm had labored for a dozen years to build up a 25,000-strong client base and then sold out to a larger national firm, walking away with a payoff in the $20 million range.

No: He did not buy an island. Instead he kept on working. He invested in real estate and in a bagel franchise, among other ventures. As owner of the Atlantic City Seagulls, a minor-league basketball team, he lost $500,000 a year from 1997 to 1999, but also won the championship in each of those years. "It was an expensive hobby," he said.

By 1999 his former firm had changed hands a couple more times and eventually been wrapped up into the large national home-security brand ADT. So Gross did what any other 46-year-old multimillionaire would do. He got back into the security business at ground zero. He reclaimed his firm's old name, hired back many of the people who had worked for him at the start, and went out to create a client base from scratch.

"Even though I had money to invest, I knew this business better than I knew the other things that I was doing," he said.

Apparently so.
 

In just three and a half years, the reincarnated Tri-State Alarm on West Chester Pike in Broomall has signed some 20,000 accounts. This year the firm will gross some $7 million, in spite of the fact that the home-security business underwent a profound revolution in the years that Gross was away.

"In 1989, my average customer paid $1,500 to have the alarm system installed and then $20 a month for monitoring," he said. "Today the average customer pays nothing for installation, and $29 a month for monitoring."

Once the large national firms started giving away their alarm systems for free in order to land the monitoring contracts, smaller players like Tri-State had to follow suit. In some ways it is a plus, since it means that Gross can target the entire middle class, rather than just a select upper-echelon clientele.

On the down side, handing out equipment for free does require a vendor to have rather deep pockets.

Thus in December 2001, Gross sold 55 percent of the firm to two venture-capital firms. Hunt Capital owns the majority of that share; Merchants Capital owns the remainder.

Industry insiders say it made sense for Gross to tie himself to outside investors.

"The capital is very important when you are involved in free-system selling," said Ivan Scharer, immediate past president of First Alert, the home security product line of Syosset, N.Y.-based Ademco. "In this kind of environment it is very good to have the kind of partners that he has. It helps you to ensure your customers that you are going to be here for the future."

The venture investments also have helped Gross to secure his own little nest egg, which at age 50 he is eager to do again. "We had to borrow a lot of money to put in some 15,000 alarm systems for free, and the venture money has allowed me to take some pretty significant chips off the table and put that money in my own pocket," he said.

Under the terms of the venture arrangement, Gross expects to serve as president for another three to five years, and then to sell out his remaining interest.

When he does, there will be people at Tri-State who are sorry to see him go. Glenn Chumley, for example, worked for Gross in the early days of Tri-State, and when his old boss re-launched the company, Chumley commuted daily from Annapolis, Md., to serve as the Philadelphia firm's vice president of sales and marketing.

"Ken's a unique guy," said Chumley. "There are some pretty good marketers out there, but most people don't understand how to keep a viable program going in terms of working with investors and all the other aspects that it takes to make a business succeed. Ken is a great marketer, but he also is a smart businessman with a natural ability to put a company together, and that is a recipe for success."

That kind of employee loyalty helped convince Pete Stein of Hunt Capital that Tri-State would be a sound investment.

"Ken works amazingly long hours, and at the same time he has a cohesive team that has been together for a really long time," said Stein, a partner in Hunt Capital. "Plus, he has great industry contacts, which is always important."

Gross plans to give up those contacts sometime in the next few years, but he still intends to keep busy.

He serves on numerous nonprofit boards including Bloomsburg University, Lankanau Hospital, Cerebral Palsy of Delaware County and the Lower Merion Scholarship Fund. His gifts have helped to establish a perpetual scholarship fund for single parents at Bloomsburg, and to create at Swarthmore a cerebral palsy facility. He also is involved with http://www.netwish.org, a Web-based charity group.

"I like to give back, I really believe in that," said Gross of his philanthropic activities. "I feel blessed. I feel lucky that I was successful."

Former Dropout Now The Toast Of Bloomsburg

By Bill Frischling, Inquirer Correspondent, December 1993

BRYN MAWR — Back when he was at Bloomsburg University in the 1970s, Kenneth S. Gross joked recently, if he had asked to see the school's president, he would have been thrown out.

Last month, Gross returned to his alma mater and received a hero's welcome from Bloomsburg's president and others. Gross and his wife led the homecoming parade. He attended a concert given in his honor and starring Academy Award- winning composer Marvin Hamlisch.

Gross even had an 800-seat auditorium named after him. "It was a fun weekend," Gross, 41, said modestly. The school, on homecoming weekend, threw a party to celebrate Gross' success, and his generosity to the 154-year-old state university. To date, he has donated $200,000 to the school, which was called Bloomsburg State College when he attended.

"We think the world of Ken Gross, because he has helped a number of students with scholarships by making a significant contribution to an endowment here," said Anthony M. Ianiero, interim vice president for university advancement and the executive director of the Bloomsburg University Foundation.

"Then we talked with him about helping us with the renovation of the 800- seat auditorium. Without his contribution, we never would have been ever to make it."



 

A scholarship Gross established in 1990 funds the education of four single parents at the university. Gross said he decided to help that particular group because those students would find it most difficult to return to school.

"I gave them a gift to establish the scholarship fund, and they wanted to give it to the smartest students. I said, 'If they were that smart, they can figure it out themselves how to pay for school,' " he said.

Gross also made the first donation toward the restoration of the auditorium in Carver Hall, one of the oldest buildings on campus.

A 1970 graduate of Nether Providence High School, Gross attended Bloomsburg through 1974 as a biology major. He left school a few credits shy of graduation to take a job with the Chester Health Department.

In 1977, he went into business with his brother, founding the Tri-State Alarm Co. In 12 years, Gross helped expand the company to a $25 million-per- year operation with 500 employees.

Gross sold the business in 1989, planning to retire at 36. But, shortly thereafter, he said, his wife, Kris, told him to "get a job."

 

He now is president of the Kenneth S. Gross Investment Group in Ardmore. He owns commercial real estate and does philanthropic work on the side. His work also led him to finish his degree at Bloomsburg in 1990.

Gross sits on the boards of directors of the university's foundation, the National Bank of the Main Line, United Cerebral Palsy and the Ardmore Business District Authority.

Gross said he got involved with United Cerebral Palsy after his sister, Linda Joy, died of the disease in 1990.  Gross helped fund a new child-development center for UCP. The center was named in his sister's memory.well on almost every site.

What a Legacy

By Arne Green, For the Press Correspondent, June 1999

Seagulls become the first USBL team to win three titles in a row.

Basketball: Adrian Griffin, who went to high school in Kansas, celebrates his homecoming by sealing Atlantic City's win with a basket with 16 seconds left en route to scoring 25 points and earning Most Valuable Player honors. 

SALINA, Kan. For the better part of the second half Monday night, the Connecticut Skyhawks ran slashed and cut two-time defending champion At- lantic City down to size. But they had no answer SEAGULLS 83 for Adrian Griffin. Griffin, a former Wichita East High School standout, SKYHAWKS 77 buried a fallaway 15-foot jumper from the right base- line with 16 seconds left to put the final dagger in Connecticut's heart as the Seagulls escaped with an 83-77 victory in the USBL Postseason Festival at the Bicentennial Center. 
 

"In the end, Adrian Griffin was the difference," said Atlantic City coach Kevin Mackey, who led the Seagulls to their third title in as many years, the only USBL team to do so. 

"That fallaway shot was just the best I've ever seen."


The Seagulls, whose owner, Ken Gross, recently announced plans to sell or disband the team after the playoffs, will be honored 10 a.m. Wednesday in a parade starting at New Jersey Avenue on the Boardwalk. 

Underdog Connecticut, with most of the an nounced crowd of 1,867 offering its support, had erased a 17-point first-half deficit to take a two-point lead into the fourth quarter. But after Marshall Grier's runner in the lane with 4:25 left put the Skyhawks in front 77-73, the Atlantic City defense slammed the door.


That was all the opening Griffin and point guard LaMarr Greer needed as they combined for the next nine points. Brent Dabbs added a free throw with 2.8 seconds left for the final margin.


It comes down to making big plays at the end," said Griffin, who finished with 25 points, nine rebounds and was voted the tour nament's most valuable player.

 

"That's how you win games and championships."

Griffin, who played at Seton Hall University, was surrounded by friends and family who made the trip from Wichita.

 

"It's special any time you win a championship," he said with a smile, "But winning in Salina is definitely icing on the cake."

 

It was Griffin who tied the game at 77 with 3:05 left on an off balance jumper in the lane Greer, who had 21 points and 11 assists, then gave the Seagulls the lead for good with a three point play at the 2:25 mark.

 

Griffin delivered the final blow with the shot clock winding down and Atlantic City still clinging to its three-point lead. Turning to ward the basket on the right baseline, he was forced back ward out of bounds by a Connecticut defender and swished the shot as he fell to the floor.

"I knew the shot clock was go ing off," Griffin said. "I wanted to concentrate and shoot the ball not just throw it up there."

When it dropped, so did Connecticut's hearts, said Skyhawks coach Ray Hodge.  

"That Griffin baseline jump shot with 16 seconds on the game clock just deflated us," he said. "When that shot fell, you could see the body language of our guys on the floor just fell."

"Not that we didn't have our opportunities."



They did a terrific job with their screens up top and Curt Smith got hot," Mackey said of Connecticut's rally from a 47-36 halftime deficit. "It was a great game for the fans. Both teams re- ally wanted it."

Connecticut twice trailed by as many as 17 points in the second quarter, but scored the last six points of the half to get within striking distance.

The Skyhawks finished the third quarter with a 10-2 run to take the lead on Smith's basket with 5.1 seconds left.

Dabbs, a member of all three Atlantic City championship teams, dominated early in the low post, scoring 16 points in the first half.

"I was focused and knew I had a smaller player on men," Dabbs said. "I got my shot off and it felt good from the beginning."    
 

In addition to Griffin and Greer, Dabbs had 23 points and 12 rebounds for Atlantic City, which had a 54-32 advantage on the boards. Mike Lloyd, the Seagulls' leading scor- er for the season, was limited to two points.

Curt Smith, who along with Grier led Connecticut's second- half resurgence, finished with 20 points and six assists. Grier had 16 points 15 in the second half and six rebounds while Danny Johnson added 15 points.

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