At an age when most entrepreneurs are winding down their careers, Irving Kipnes is cranking his up.

The 68-year-old Calgary native holds the reins of two flourishing Edmonton businesses while still making time to give back to his community as a philanthropist.

Kipnes is president and owner of one of Edmonton's most prominent real estate developers, Delcon Development Group, which he founded in 1962, and is also president and CEO of a thriving new public company, Liquor Stores Income Fund, Alberta's largest liquor store operator.

And, with Alberta's economy on a roll, Kipnes is pleased as punch to be doubling his pleasure in business.

Jack Dagley, Business Edge
Liquor Stores Income Fund CEO Irv Kipnes displays stock at Liquor Depot at 109th Street and Jasper Avenue.

1. What were your aspirations growing up in Calgary?

"When I was growing up in Calgary, it never occurred to me that I would not be in my own business. That's just the way things were. My dad (Harry) had a couple of small grocery stores that were about the size of a kitchen and all his friends were pharmacists or cattle buyers who basically made their own way in small businesses. So, growing up, I guess I got the impression that was the way things were supposed to be."

2. How did you get your start in business?

"While I was working at Imperial Oil (as a systems analyst at an Edmonton refinery), I was in business with a fellow named Peter Oluk and we were building warehouses and apartment buildings. I met Peter at Imperial Oil and we both were looking to supplement our incomes. Eventually, I quit Imperial Oil to go into business full time. Since I left Imperial Oil (in 1963), I've only ever held what I would call a 'job' job, a job that wasn't my own stuff, for about six weeks. I always wanted to have the freedom to do things that I wanted. The first building we ever built was a 10,000-sq.-ft. warehouse that cost about $80,000 to build. That building today would probably cost about $500,000 to $600,000."

3. How did you finance that first project?

"I was able to borrow the money privately from my mother-in-law because we couldn't get any banker or anybody to give us any money. But we were able to mortgage it out and pay her back. I've often said that, if I had been smart enough to understand the risks that I was taking in those days, I don't know if I could have taken them."

4. How did your real estate development business fare through the difficult years such as the 1980s?

"We were operating North West Trust (as president and CEO in the 1980s) for about five years until it was one of the 14 or 15 Western Canadian financial institutions that were put under, taken over by the government or whatever. In this particular case, the Alberta government (through Alberta Treasury Branches) took over North West Trust, which was ultimately sold to Canadian Western Bank. When we bought the trust company (1982), there was one foreclosure. A year later, there were 104 foreclosures. With the foreclosures, you generally ended up writing off a whole bunch of equity and you ended up with the trust company being undercapitalized."

5. How difficult was that period for you personally?

"Those were very stressful years in that one had to run fast enough to keep ahead of the falling real estate market. We could have faced personal bankruptcy, but we were able to avoid that by making sure that our creditors were taken care of. Then, we basically took a deep breath and started all over again."

6. How did you initially get into the liquor business?

"We applied to have a beer store (in Edmonton) in the spring of 1993 before privatization (of liquor stores, then government-owned). As we were drawing up plans for that beer store, we started hearing rumours that there may be privatization. In early September, when the government announced privatization, we were in the middle of building the beer store and at that point we translated it into a liquor store. Then, we started looking at other opportunities. We were the first to get a liquor store licence in Alberta outside of a hotel. It was good timing because at that time there was a recession-type of mentality and there just wasn't a lot going on."

7. To what do you attribute the success of your liquor business?

"One of my business associates said it best. He said that, with the closing of the ALCB (Alberta Liquor Control Board) stores, the liquor business has gone from a destination business to a convenience business. In other words, if you're at the right location, you're going to get the business. He was dead right. We realized that we are a convenience store, much the same way as Mac's or 7-Eleven are."

8. Was it an easy decision to take your liquor business public as an income trust last year?

"We always looked at that as the route we would ultimately go. After we built up our business to 28 stores (under the Liquor Depot banner), we tested the waters to see if we could do an income trust and found that we were far too small in size. We started gearing ourselves up (for going public) by looking around for more acquisitions and thinking about a merger partner that fit with us. We found that merger partner in Liquor World and that's when we were able to go public."

9. What's your growth strategy for the Liquor Stores Income Fund?

"We had 50 stores (when the company went public) and at that time we said our horizon over the next three to five years was to double the size of the business.

That's basically quite consistent with what we've been doing although we took a big bite this spring when we increased our number of stores by 30 per cent. We now have 65 stores. We have three stores under contract to build in Alberta and we will probably buy several stores in Alberta before the end of the year to keep on our projected growth path. We're just now opening our third store in B.C. but it's tough to get into (that province). Yet, once you get in, the business is very good because there is only about one store for 4,000 to 5,000 people in B.C., whereas in Alberta it's one store for about every 3,000 people or less."

10. How much of your time is spent on the Liquor Stores business compared to your real estate business (Delcon Development Group)?

"I'm probably spending about 70 per cent of my time on liquor-related things. I've got very good management on both sides of the equation. From a liquor perspective, so much of my time is spent on making sure we've got all our governance issues in order. In the last few years, with problems with Enron and so on, there have been so many more guidelines for corporate governance. There has been a lot of time taken on that and more than I expected.

"I remember someone saying to us before we went public, 'You're going to love going public, you're going to hate being public.' " 11. What's your view of the new rules surrounding corporate governance?

"Certainly, there has been overreaction. The accountants like Arthur Andersen have paid a big price for whatever was hung on them for responsibility in some of the failures. But the flipside is that the remaining accounting firms are making a very, very large return on the additional enforcement issues with the major, major sources of work now. So the accountants have come out of it very well. Whether or not it'll do anything to solve the Enron-type problems from ever happening again, I doubt it. Yet, I think it has been healthy because it has forced public companies to stop being management's fiefdom and made them responsible to the shareholders and to the board. The CEO today is very responsible to the board whereas before, board members were usually pals of the CEO and external directors were sort of there but not having any force or effect. Today, you run your company to make sure the board of directors is comfortable."

12. How is your real estate business faring?

"It has been very good. The market for our (residential) subdivisions is very strong. To a smaller degree, we're also involved in developing shopping centres. We're trying to keep up our inventory of land for subdivisions and when we see opportunities to add on to what we have, we do that. But now is not a wonderful time to be buying on speculative basis. Because prices are so high on real estate, you basically have to be able to use the property in order to make sure that you're comfortable buying it."

13. What's your longer-term outlook for the real estate market in Alberta?

"It's very positive. I think the influence of the oilsands, northern initiatives and other things in Alberta will drive long-term growth. There are very positive signs at every turn. I can't see any diminution of oilsands activities and related things for many years. The spinoff in the Edmonton area will be more demand for commercial, warehouse and residential (real estate)."

14. You're at an age (68) where many are retired, yet you're running two companies. Why is that?

"(Laughing) I need the money ... actually, I need the jobs - for my mental health. I am working harder today than I had expected at this time but I can see an end to that. I should be back to some type of normality before too long. I'm organizing and planning to be doing less hands-on stuff myself."

15. What's the most valuable lesson you've learned in business?

"Probably, it's to always look at the worst-case scenario when we're doing anything. If the worst-case scenario isn't so bad, then it gives you comfort to go ahead. It's really a matter of keeping a focus on the horizon to see the things that are going to influence the outcome. You don't want to be the person who bought all the machinery for nylon stockings when pantyhose was just evolving. If you can live with the worst-case scenario, then making decisions to go ahead is pretty easy."

16. What's your proudest achievement in business?

"I think the IPO (initial public offering of Liquor Stores Income Fund) was probably the neatest thing that we've been involved with. There have been a few peaks and valleys, but right now the timing to be doing business in Alberta cannot be better. It was not always (that way). From 1980 until about 1997 or 1998, we basically had a depression in real estate. The market has come out of that very nicely in the past seven or eight years and, as it turned out, we were well positioned when things did start to turn around."

17. What does your role as a philanthropist do for you personally?

"It's very satisfying. I really feel strongly that people have to give back to their communities. You have to give back. My wife (Dianne) and myself like to go into things where we're giving people money to help themselves, as opposed to just charity. There are a couple of youth groups in Edmonton that we're giving some support to. For instance, there's a restaurant in city hall in Edmonton that is being run by street kids so they can go out and get a job somewhere. We've also been involved in the relocation and funding of the veterans' centre in Edmonton (to the Dianne and Irving Kipnes Centre for Veterans)."

18. What's the best advice you'd give a young entrepreneur?

"When my (four) kids were younger - and they're not involved in my business - I gave each of them a challenge. They all wanted to get involved in the real estate business. I said to them, 'I'll help you buy a lot, but you go build a duplex and learn how to do it.' I told them, 'Don't wait for someone to hand you something.' So the best advice is to get involved. Don't stand on the sidelines and watch. Get involved."

19. What's your favourite pastime?

"Actually, probably my best pastime is my business. I thoroughly enjoy the mental challenge of keeping stuff organized and making sure stuff is happening. That gives me as much satisfaction as anything."

20. So retirement isn't a word in your vocabulary?

"I talk about it a lot, but I'm not saying it's a goal of mine. I had dinner with a friend from Toronto a couple of nights ago who is a couple of years older than me. The only difference between he and I is that he rides a bicycle a lot, going on bicycle trips around the world. He doesn't think the word retirement is ever going to be in his vocabulary either and I think that way, too."

IN PROFILE: IRV KINES

* Titles: President/CEO, Liquor Stores Income Fund; president/owner, Delcon Development Group.

* Born/Raised/Age: Calgary/68.

* Family: Wife Dianne Kipnes, four children.

* Education: University of Alberta, bachelor of science, chemical engineering.

* First Job: Systems analyst, Imperial Oil (1959-63).

* Career: Kipnes founded Delcon Development Group in 1962, which he now operates along with Liquor Stores Income Fund. Other business interests have included Alpine Development Group, Chateau Developments and North West Trust.

* Community: Kipnes is chairman of the Dianne and Irving Kipnes Foundation. Dianne and Irv Kipnes have raised and donated $2 million for the relocation of the Mewburn Veterans Centre in Edmonton.

THE COMPANY: LIQUOR STORES INCOME FUND

* Profile: The income fund, which derives income from a network of liquor stores in Alberta and B.C. under the Liquor World and Liquor Depot banners, was formed through an initial public offering on Sept. 28, 2004.

* Unit Price/52-Week Range (TSX: LIQ.UN): $16.95 ($12.05-$17.46).

* Website: www.liquorstoresgp.ca

* Head Office: Suite 1120, 10235 101 St., Edmonton, T5J 3G1.

* Phone/Fax: 780-949-9994/ 702-1999.

THE COMPANY: DELCON DEVELOPMENT CORP.

* Profile: Delcon, founded in 1962, is a commercial and residential developer of residential subdivisions and shopping centres primarily in the Edmonton and area market.

* Website: www.delcongroup.com

* Head Office: Suite 800, 10235 101 St., Edmonton, T5J 3G1.

* Phone/Fax: 780-497-3250/ 429-4778.

(Gyle Konotopetz can be reached at gyle@businessedge.ca)