27

Routh Street Cafe Opens
By Stephan Pyles

27a Pyles photography by Kevin Hunter Marple

Who knows what would have happened to the Dallas culinary scene if Stephan Pyles had taken a postcollege adventure trip to Cancún instead of France. Thankfully, after studying music at East Texas State University, he headed to Paris, where he was infected by the spirit of French cuisine. He returned to Dallas and was chef at the Bronx, still a popular spot on Oak Lawn. But his travels continued and the influences of the great culinary minds of the ’70s and ’80s—Alice Waters, Julia Child, Paul Bocuse—fueled his passion. On November 27, 1983, Pyles rocked the Dallas dining scene by opening Routh Street Cafe, home to a new and exciting culinary trend sweeping the nation—New American cuisine, which eventually morphed into Southwestern cuisine. At a time when most folks were happy eating steak, Pyles soon had the same diners swooning over catfish mousse with crayfish sauce. A gastronomic miracle.

As a fifth-generation West Texan born to a family in the restaurant business, I should have known that I wouldn’t stray too far from my roots. Temporarily sidetracked from my culinary destiny with a stint at East Texas State University studying music, I reconnected with my gastronomic fate during a fortuitous trip to Europe after college. The seeds for La Grande Cuisine were planted as I strolled through the markets of Paris and dined in (inexpensive) bistros and brasseries.

Upon return from my “maiden voyage” to France, I took a job at a restaurant called Jimmy and Eddy’s, which houses the present-day Shinsei. I did an apprenticeship with a French chef named Françoise, who would teach me basic technique and instill even more French spirit into me. It was there I perfected beef bourguignon and coq au vin and learned “kitchen French.” She was later hired at a little neighborhood cafe called the Bronx, which at the time was in a seedy part of town (some would say it still is). I followed her there and worked as her assistant. I was also a waiter and part-time pastry chef.

Françoise eventually left, and I became the executive chef. During this time, an old college roommate who had also become a chef helped me land a prize job as chef’s assistant at the Great Chefs of France Cooking School at the Mondavi Winery. The owner of the Bronx was kind enough to let me be gone for two-week intervals, four times a year. At the Mondavi Winery, I was immersed in gastronomic nirvana with the culinary giants of the day: Jean and Pierre Troisgros, Michel Guerard, Paul Bocuse, and the inimitable Julia Child.

27b Routh Street Cafe photography courtesy of Stephan Pyles

These chefs, with the exception of Julia, were the masters of the hottest style of cooking on the planet at the time. They were the revered masters of French Nouvelle cuisine and were indeed the rock stars of their day, both in France and in growing food circles in the United States. What I was witnessing in the Napa Valley and Bay Area in the early ’80s was history in the making and would end up changing my world forever. With Alice Waters bringing her freshly foraged mushrooms into the kitchens at Mondavi, and Marion Cunningham and Julia Child preparing red flannel hash for the Troisgros brothers, I was observing the early stages of the renaissance of American cooking.

While at the Bronx, a good friend of mine, Sharron Sadacca, introduced me to friends of hers, John and Arlene Dayton, who became clients in my budding catering business. After doing several parties for the Daytons at their home, John asked if I might be interested in owning my own restaurant someday. I said I would, but was currently content working on my own as a caterer.

It soon became clear that John, an attorney at the prestigious Thompson & Knight law firm, was eager to “retire” from the legal world and begin a new profession. What John lacked in actual restaurant experience, he made up for in intuition, creativity, foresight, business acumen, and wine palate. Routh Street Cafe would have never happened without the brilliant guidance of John Dayton. We were a perfect complement to each other. Though I chose the modern style of the design, it was his dazzling pieces of art by Jasper Johns and David Hockney that adorned the walls. It was my insistence on having a wine list with only American wines and his love of the grape and dizzying pursuit of excellence that led to the many awards the list won.

When we opened RSC on November 27, 1983, neither of us had any idea that the restaurant would become the icon that it did. It was an almost giddy time in Dallas, and we seemed poised to be the next great American city. Real estate was trading at an all-time high, and it seemed everyone was profiting from something. Our first summer after opening, we hosted Ronald Reagan’s Republican National Convention and there was an immediate international spotlight on Dallas and its culture. Being featured in the New York Times was almost surreal.

Although I had been trained in French technique and philosophy, I wanted to be a part of an exciting new energy that I predicted was about to sweep the country—a style of cooking called New American. Emanating from California, it was beginning to take hold in a few other cities, most notably in New York as practiced by Larry Forgione at An American Place; Jasper White at Jasper’s in Boston; and in New Orleans at Paul Prudhomme’s K-Paul’s Louisiana Kitchen.

When I told folks that the new restaurant I was opening would be serving New American cuisine, I usually got a blank stare. A few confused people would ask, “What is that, fancy meatloaf?” In reality, New American cuisine was actually nothing more than la nouvelle cuisine of France being prepared with American ingredients. Just as with our wine list, I wanted all the ingredients in my recipes to be grown and produced in America—not the easiest proposition considering the lack of quality in American food products at the time.

I was smitten with the perfect specialty produce and impeccable seafood I had been exposed to in California, but it was next to impossible to find such products in Texas. When I first opened Routh Street Cafe, I was flying in “exotic produce” such as baby carrots and yellow bell peppers from Southern California. It would be years before we would see a market in Texas for these ingredients.

In 1983, the Dallas restaurant scene was controlled by the “French culinary mafia.” Every serious kitchen in town was headed by a Pierre, Jean-Claude, Guy, or Henri. Dean Fearing and I were the leaders of the American Culinary Brat Pack and not taken very seriously at all by the French elite of the day. But this was our time, and we were about to reclaim the cooking of our American heritage.

On my first menus at Routh Street, I featured such dishes as catfish mousse with crayfish sauce and Colorado lamb with Texas pecans and garlic. As I began to explore ingredients even closer to home, I began experimenting with recipes that were French in appearance but were laced with chiles, tomatillos, and all the other ingredients that I grew up eating—indeed the ingredients on the menu at my family’s truck stop cafe.

But this was not your father’s truck stop fare, as I was serving such dishes as Texas black buck antelope with pasilla-tamarind sauce and sweet potato tamales. Around 1984 or 1985, Anne Lindsay Greer, a cookbook author and devotee of Southwestern regional cooking, found that several of us chefs in town were cooking with Texas regional ingredients with a “certain style” and got us together for dinner. Dean Fearing (who was then at the Anatole), Avner Samuel of the Mansion on Turtle Creek, and Robert Del Grande from Houston began meeting and cooking together regularly with Anne and me, and before we knew it, our little Gang of Five had become the new darlings of the food press. We didn’t even have a name for our style of cooking, but the media soon named it: Southwestern cuisine.

Over the next five years, it seemed all culinary media eyes were on Dallas and this hot new culinary trend. Dallas had come from being a gastronomic wasteland to a city that was exporting food trends. Arizona 206, a Southwestern cuisine restaurant with Brendan Walsh as its chef, was suddenly the hottest place in New York. About the same time, the now-famous Bobby Flay came to Dallas to work at Routh Street Cafe and Baby Routh for a while before opening his Mesa Grill.

During its run, Routh Street Cafe was on most lists for the top 25 restaurants in America. At one point, Courvoisier’s Book of the Best named it the United States’ fifth-best restaurant. In 1990, while at Routh Street Cafe, I received the first ever James Beard Award for Best Chef: Southwest. The month before we closed, Food and Wine magazine profiled us in a feature that listed their top 20 American restaurants, and a six-page feature in Gourmet magazine scheduled to run the month after we closed had to be scrapped.

Yes, even though we were a casualty of a recession (and substantial overhead), we went out in style. The 1980s were heady times in Dallas, and Routh Street Cafe was an exemplary symbol of that impetuous era.

Stephan Pyles is chef and owner of Stephan Pyles and Samar restaurants in downtown Dallas.  

28

Gerald Turner Takes the reins at SMU
By Gerald Ford

28a Ford

SMU is the academic home of the Dallas Establishment, and for decades that was not a good thing. The establishment was business-oriented, parochial, and almost childishly anti-intellectual. But as cities grow up, so do its elites. A new generation knew Dallas needed a real university, a place that would be a hotbed of ideas, that would attract the best talent, and that would be capable of leading the city in a global economy. In 1987, they recruited Kenneth Pye, chancellor of Duke University. His untimely death in 1994 left a gaping hole. After a national search, trustees turned to Gerald Turner, chancellor of Ole Miss. Installed as SMU’s president in 1995, Turner surprised even his most ardent early supporters. Using a natural affability and charm to disguise an almost ruthless determination, Turner raised more than $1 billion to remake the campus, recruit new deans, and launch new programs, while stiffening standards and bringing new rigor to every discipline. Early in his tenure, Turner answered a question about which university the SMU he envisioned could be compared to. “I don’t want to be the Harvard of the South, or the USC of the East, or the Emory of the West,” he answered. “I want SMU to be the university for Dallas.” A mere 15 years later—warp speed in academic time—SMU has become that, and more.  

28b illustration by Eric Palma

Ken Pye was very sick at the time, and he had done a good job for the university as president. I was one of several members on the search committee to find his successor, and in that process we had a professional recruiter who developed a list. Of the four or five who were finalists, Gerald Turner was remarkable.

Throughout the process, from the first meeting to the last meeting, we were convinced that he was the person we were going to get. During the first interview with the full search committee, it became very clear in that interview—I don’t remember if it lasted 30 minutes or an hour—that he was the candidate we wanted.

You’re looking for somebody who can lead the academic mission, who can have the abilities to be an effective fundraiser for the university, and somebody who just can deal with the various constituencies: alumni, faculty, students, parents, and the business community.

And he was looking at us just as much as we were looking at him. He was interested in coming here. He’s from Texas. He knew SMU and Dallas. This is a situation when he wanted to feel comfortable with SMU and the board, and we felt the same from our different perspectives. He’s turned out better than any of us could have hoped for. Gerald is a transformational president for SMU.

He has changed SMU academically, and he’s changed the campus—the look of the campus, the facilities of the campus. He’s been instrumental in the presidential center that’s coming here. I think he’s got more work to do and more of it that he will do. If you look at the students, our students in terms of test scores have improved dramatically.

By any measure of the university, he’s just been transformational.

Gerald Ford is a member of SMU’s board of trustees.

29

The 1980s Banking Crash Humbles Dallas
By Jody Grant

29a Grant

In 1986, Dallas was considered a banking powerhouse. Oil was flowing, money was being spent, and all was well. Then the world came crashing down. Oil prices plummeted and the Tax Reform Act of 1986 left banks with massive loans. By 1992, 506 commercial banks had been closed. Businesses moved out of their downtown offices, creating a wasteland. Today, the city is still recovering.

As the sun rose on January 1, 1986, Dallas possessed the 17th, 20th, and 25th largest banking companies in the United States: First RepublicBank Corporation, MCorp, and InterFirst Corporation. They were also the three largest banking companies in Texas, with combined assets of $63.4 billion.
Four short years later, as the sun set on the decade, Dallas didn’t have a single home-based bank with more than $1 billion in assets. Dallas had been transformed from one of the nation’s great banking powers to a financial wasteland. The financial landscape had permanently changed, and with it Dallas lost the engine of growth that built one of America’s greatest cities.

29b illustration by Sean McCabe

The story of their demise is a tortured Greek tragedy that should never have happened and that can’t be completely told or understood unless you lived at the heart of the story.

The decade of the 1980s began during an oil boom that started with the Arab oil embargo of 1973 and pushed the Texas real estate and energy economies to giddy heights. Money poured into the state, resulting in prosperity and a spending binge that was unparalleled in Texas—and perhaps in U.S. history.

Unfortunately, boom was followed by bust, creating an economic tidal wave that swept over the state, catching Dallas in its vortex. The beginning of the end occurred in the first quarter of 1986, when the price of oil plummeted from $35 per barrel to $9.75 per barrel in three calamitous months. This was quickly followed by the passage of the Tax Reform Act of 1986, which removed most of the tax incentives for individuals and businesses to own real estate, leaving the Texas and Dallas banks, which were laden with real estate loans, vulnerable to the following devaluation of real estate.

Against this background, Congress had deregulated the nation’s savings and loan industry, creating an atmosphere in which every crooked fox in Dallas found a fertile and lucrative henhouse to plunder. A small band of thieves built and ravaged Empire Savings, Vernon Savings, Sunbelt Savings, and Western Savings. These organizations grew in aggregate from a few hundred million to more than $5 billion in assets in less than four years as a result of loose and illegal lending practices, “hot shop” deposit soliciting call centers, and self dealing.

One of the most ludicrous and unsound loans was made by Sunbelt Savings, aka “Gunbelt Savings,” to a real estate investor in Dallas to buy 84 Rolls Royce automobiles for $3 million from the Bhagwan Shree Rajneesh of the commune Rancho Rajneesh, Oregon. Thirty-six of these cars were hand-painted by the Bhagwan’s staff with peacocks and geese in flight. Not surprisingly, the loan went sour. All of the above mentioned S&Ls were closed by federal regulators, and their CEOs were all convicted of fraud and sentenced to lengthy prison sentences.

Unfortunately, the S&L crisis, the abuses at Penn Square Bank in Oklahoma City, and its subsequent failure in 1982, created a vindictive and punishing atmosphere among politicians and regulators in Washington. Federal regulators closed 225 of the 279 S&Ls existing in Texas on January 1, 1988, including 94 of the largest 100 in the state. From 1983 to 1992, regulators closed 506 commercial banks, which was approximately one-third of all commercial banks in Texas—and 25 percent of the total closed in the United States. Of the 10 largest banks in Texas, nine were either forced to merge with larger out-of-state institutions or were declared insolvent.

Were the regulators too hard on Texas? In an interview with the Dallas Morning News on April 5, 1992, Bill Taylor, chairman of the Federal Deposit Insurance Corporation and the successor to Bill Seidman, who presided over the agency during the Texas financial crisis, said, “The person who says things got a little aggressive in Texas probably isn’t all wrong.” That is a startling statement from a regulator.

To Dallas, the undisputed banking and financial center of Texas, the impact was devastating. Dallas was left with fewer banking alternatives, and decisions once made locally were subsequently made by executives located in faraway places. The financial engine that drove the commercialization and industrialization of Dallas and provided the early entrepreneurs with the seed money to build some of the leading businesses was gone.

With the centralization of authority in the headquarters of the institutions that were built on the carcasses of our leading banks, we lost major power bases as well as the institutional incubators that in the past spawned so many of our city’s leaders. Importantly, with the demise of the major banks, and other major institutional employers, downtown Dallas was left bereft of tenants for its office buildings, and during most of the ensuing years we had one of the top five highest vacancy rates in the central city of any major city in the country. We are still in the process of recovering after nearly two decades.

In speaking to a group of private investors and financial executives in Dallas on October 24, 2009, Bill Isaac, chairman of the FDIC from 1981 to 1985, said that in his opinion, the nation’s financial crisis of the 1980s and early 1990s was far more serious with potentially greater downside consequences than the current crisis. He cited the 3,000 bank failures in the country, which far exceeds what we are facing today with 115 in the current crisis, and perhaps as many as another 300 or so in jeopardy. He further stated that had the sovereign debt of foreign nations on the books of our largest money center banks been “marked to market,” most would have been declared insolvent, creating a far more serious crisis than that of today.

When a vacuum is created, it is filled by others. Fortunately, the large banks that replaced those that failed have played a major role in meeting the borrowing needs of our citizens and businesses. Additionally, many once-small community banks have grown to play a major role, and dozens of new banks have been formed to fill the vacuum. Private equity today plays a major role in financing our entrepreneurs and emerging businesses, as do other specialty lenders.

Jody Grant is the author of The Great Texas Banking Crash—an Insider’s Account. He is the principal founder of Texas Capital Bank and the founding partner of BankCap Partners, a private equity firm.


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