Building a Legacy
For parents, leaving a legacy may mean offering their children an inheritance. For entrepreneurs, leaving a legacy often means passing a business down to the next generation. The founders of Midwest Health Management Inc., however, see their legacy in a much broader scope. Jim Klausman and Butch Eaton hope to help invigorate growth in Topeka so it remains a place where their children and grandchildren will want to live and prosper.
Building a partnership
Ask a couple of business partners who have worked together for 40 years the secret to a lasting relationship, and you will probably hear the words: compromise, respect and determination. After all, being in any type of a relationship for 40 years takes work and commitment.
Jim and Butch have been business partners since 1977, when they leased their first nursing home and created Midwest Health.
Jim was born in Kansas City, Missouri, raised in Milwaukee and transplanted to Kansas when he was in eighth grade. His grandfather owned a nursing home in Easton, Kansas, and his parents had purchased one in Valley Falls. Jim worked at that facility all through high school and then moved to Lawrence for two years to attend the University of Kansas. He transferred to Washburn University to finish his degree, and began working at Sears Automotive part time.
There he met Butch, who hailed from Iowa. Butch was working full time at Sears while also attending Washburn University. The two soon became the best of friends.
Jim graduated a year or two ahead of Butch and began working with his father at the nursing home in Valley Falls. In Early 1977, when Jim was offered the opportunity to lease Woodland Health Center in Topeka, he knew he needed a business partner to make it happen. He immediately thought of Butch.
Unlike Jim, who had grown up in the nursing home business, Butch’s experience with senior care facilities hadn’t been positive. However, because it was Jim who was asking, and the strength of their friendship he felt could survive a business partnership, Butch decided to give it a try.
“Even though I wasn’t keen on the idea of being in the nursing home business,” Butch said, “I fell in love with the people who lived there.”
The two men grew the business slowly over the next several years. They added more facilities in Kansas, and then, because Butch wanted to do a project closer to his roots, they opened some facilities in Iowa.
Over the next decade, the nursing home business changed dramatically. Back in 1977, the only options for seniors were the hospital or a nursing home. Then in the late 1980s that all changed when assisted living options came into being.
“We saw assisted living as being a much better alternative to being in a skilled nursing facility,” Jim said. “We were one of the first companies to build an assisted living facility—Rolling Hills.”
Now Midwest Health has 52 facilities in four states (the newest is about to open in Osage Beach, Missouri). The majority of the business has become assisted and independent living.
Building a conglomerate
As the company grew, so did the partnership. Jim and Butch had created a successful legacy built on trust and friendship. They decided to test that bond by embarking on additional business ventures together. The two men didn’t have to search too far for viable opportunities.
As the company grew, so did the partnership. Jim and Butch had created a successful legacy built on trust and friendship. They decided to test that bond by embarking on additional business ventures together. The two men didn’t have to search too far for viable opportunities. Several ancillary business ventures presented themselves within the medical arena. Medical equipment and supplies was a natural fit. After all, they used them every day inside their own senior care facilities. They opened Breathe Oxygen & Medical Supply in 2002. The company, which provides oxygen equipment and supplies, respiratory equipment and supplies, and durable medical equipment such as wheelchairs, walkers, rollators, and medical beds, has locations in Topeka and Lawrence.
Another natural fit for their existing business was the home health services industry. Jim and Butch opened Caregivers Home Health, a home care provider that allows seniors to remain safely in their own home while receiving medical care or assistance with personal care and other daily tasks.
Other ancillary business ventures include a partnership with Grace Hospice and an institutional pharmacy, Senior Rx Care, which provides all of the medications for the Midwest Health facilities and other medical facilities.
That pharmacy venture opened up an entirely different aspect of business for Jim and Butch. To house the new pharmacy, in 2008 they renovated the old Dibble’s grocery building at 121 SE 6th St. in downtown Topeka at a cost of almost $600,000.
“We always had an interest in downtown,” Jim said. “It was fun to repurpose a building into something useful again.”
Building a community
It seems Jim and Butch are looking to have a little more fun. Multiple business entities created by the pair have drawn in additional investors that have recently purchased several properties downtown in anticipation of a resurgence of business in the area. The two now own the US Bank Building, with two floors occupied by the bank and two floors leased by Westar. Tenants for the top two floors are still undetermined.
The two men, along with some additional investors, also own the old Ray Beers building at SW 8th and Kansas, which formerly housed Tucker’s Bar and Grill. While they don’t have specific plans for this building yet, they hope to possibly bring in a new restaurant/brewery and some retail shops.
“Downtown wasn’t ready for a restaurant in that location before,” Jim said. “But the timing looks pretty good right now.”
Last year a group of investors that included Jim and Butch bought the Kansan Towers, which they plan to renovate to offer several floors of office space and several floors of residential space. Several other buildings that they own in the downtown area are either under negotiations with potential tenants or in “wait and see” mode based on what Topekans would like to have downtown.
While Jim and Butch don’t always agree on what should go into some of their investment property locations, if Butch gets his way, some of those ventures will include entertainment and retail venues.
“A vibrant downtown must entertain people,” Butch said. “You can get them to come for the restaurants, but you need to give them a reason to stay.”
Downtown isn’t the only location that Jim and Butch have their fingers in. They are partial owners in the Blue Moose restaurant and will be opening the new Starbucks next door in August.
They also purchased the 14-acre tract at SW 29th and Fairlawn, which they hope to turn into a mixed-use development called Wheatfield Village. Depending on the results of negotiations with the City of Topeka and KDOT to allow them to build an entrance off of 29th Street, they hope to break ground as early as next year.
Jim and Butch have a little history with this location—it was actually where the first Midwest Health office was located.
“We think it’s a great location,” Jim said. “That’s why we bought the land.”
Building a future
For both Jim and Butch, the business partnership has never been in question. They admit they don’t always see eye to eye on everything, but they are committed to continuing the partnership, even across generational boundaries. Jim’s son, Brett, and Butch’s son, Lee, have both joined the business.
“My son is the fourth generation in the senior care business,” Jim said. “It is part of who we are.”
Butch has a little different take on working with his son.
“When I asked Lee if he wanted to join the business, I thought he would say no,” Butch said. “He surprised me, but it was a good surprise.”
While most successful businessmen who have poured their entire lives into growing business so that they can someday quit and reap their rewards, this partnership that has been going strong for four decades doesn’t show any signs of slowing down.
“I’m 70 years old,” Butch said. “I say ‘this is probably stupid’ for almost everything I get involved with these days. But that doesn’t stop me from going ahead and doing it.”
Jim and Butch each admit that it hasn’t always been a smooth road. As with any two people who have been together for so long, they have had their share of disagreements.
"Jim and I look at things completely different,” Butch said. “But I think that’s good.”
They complement each other and provide a sort of checks and balances to the business relationship. If one of them is really excited about a specific project or idea, he will bounce it off of the other. Sometimes having someone tell you ‘that is a stupid idea’ helps puts things in clearer perspective.
Now that they have built such a successful business, Jim and Butch have another goal in mind—to help make Topeka the best place in the world to work and live. Investing in multiple business ventures and helping revitalize downtown is just one avenue to achieving this goal. The other is giving back to the community. Recently, Midwest Health donated $1 million to Shawnee County Parks and Recreation to help fund the Midwest Health Aquatic Center that will feature numerous water slides, a zip line, a rock climbing wall, kids play structures, a lily pad crossing and a bowtie wave pool, which is believed to be the first of its kind in the nation. The new aquatic center is slated to open this summer.
“We like Topeka. It’s our home. We want to make our home a better place to live,” Jim said.
Forty years into their relationship, the two men are still business partners and still the best of friends.