33

Frisco Explodes
By George Purefoy

33a Purefoy

For years, it appeared that Frisco was located on the wrong side of State Highway 121. While its neighbors to the south flourished, Frisco had stalled. Families new to the area—many of them priced out of Plano and elsewhere—were starting to move to the city in the 1990s, but commercial development was slow to follow. Not from lack of effort: there is a story, possibly apocryphal, about the mayor hiring someone to bulldoze a field to create the illusion that things were happening. (Depending on whom you believe, he was actually driving the bulldozer.) But such theatrics were no longer necessary by the time Stonebriar Centre opened in August 2000. The city was well on its way to becoming a dominant economic engine in the region.

33b Stonebriar Centre photography by Elizabeth Lavin

When I started as Frisco’s first city manager on November 1, 1987, Frisco’s population was approximately 5,000, and the city had adopted its home rule charter in May of that year calling for a council-manager form of local government. I had just come from Columbus, Texas, a town of 4,000, which is located approximately 70 miles west of Houston.

Much like today’s economy, the stock market had just taken a huge tumble in October 1987, and the economy around Houston at that time was in a complete freefall. Within a few days of starting work in Frisco, a local real estate agent took me on a tour and pointed out two fairly large subdivisions being developed (Plantation Resort and Preston Vineyards), along with the Frisco Jetport. Compared to what had been happening in Columbus, Frisco looked like the promised land.

Within a year or so, Plantation Resort and the Frisco Jetport both ran into financial trouble. Though Plantation Resort would ultimately be developed out, the Frisco Jetport was never completed and eventually went away. So, though I was initially impressed that Frisco had the looks of immediately taking off, it became apparent that the impetus for development would go away as the Resolution Trust Corporation started taking over property after property.

In the early 1990s, the economy started coming back, and the biggest issue facing Frisco was to get major development to cross the State Highway 121 barrier. It seemed at the time that an invisible wall had gone up along the north right-of-way line of the roadway. The first crack in the wall occurred in 1995 when the Collin County Community College District Preston Ridge campus in Frisco opened.

The wall was completely torn down when Stonebriar Centre mall opened in August 2000. Though Frisco had been growing during the 1990s, the opening of Stonebriar Centre appeared to be the catalyst to confirm that Frisco had indeed arrived as a major player in the Dallas economy.

Though I have a difficult time identifying only one event that destined Frisco’s growth, there is no doubt that Frisco’s success has been built upon a combination of being in the right location and having elected leadership with the patience it took not to settle for anything that happened to come our way, but instead demanding quality growth.

The result has been that Frisco is today a city of more than 97,000 with the sixth-largest tax base in North Texas and is in the top 20 in sales tax receipts in the state.

George Purefoy has been the city manager of Frisco since 1987.

34

Hicks & Haas Devours the Soft Drink Industry
By Tom Hicks

34 Hicks photography courtesy of Getty

In 1984, Tom Hicks and Robert Haas formed Hicks & Haas with $250,000. They made their first killing in the soft drink business. In four years, they converted a $55 million equity investment in Dr Pepper and 7Up into a $1.2 billion payout for the original investors. The success—and that of other leveraged-buyout firms that could trace their DNA back to Hicks & Haas—helped make Dallas a major player in the investment world.

You don’t get many opportunities to restructure an entire industry. That’s what happened in 1985 and 1986. It culminated when Dr Pepper Company, 7Up Company, A&W Root Beer, and some Dr Pepper bottling plants came under control of what the New York Times at the time called “a small Dallas investment firm.” That firm, Hicks & Haas, had just transformed itself into a substantial force in the soft drink industry. But the deal almost didn’t happen.

Bobby Haas and I began the firm with a commitment to a few important principles. One of those was to “buy and build” great companies. We also knew the importance of strong, effective management. At that time, the soft drink industry didn’t necessarily run itself with those strategies and tactics.

Jim Turner introduced us to the industry. He was running Dr Pepper’s bottling operations in Dallas, Fort Worth, and Waco, and the parent company wanted to sell his division. We knew nothing about the business, but after one conversation, it was clear that Jim was an expert. He envisioned changes that would make the bottling business more efficient and profitable. We purchased those Dr Pepper bottling operations in partnership with Jim and later acquired Dr Pepper’s Houston bottling operations.

Jim also introduced us to A&W Root Beer, which was for sale. That deal got done in May of 1986, but there was more to do to become a player. The other soft drink company that had been on the market was Dr Pepper. But Coca-Cola earlier had announced its intent to purchase the company while PepsiCo made a similar announcement to buy 7Up.

The Federal Trade Commission had different ideas.

In June, the FTC ruled against a Coca-Cola takeover of Dr Pepper and a PepsiCo acquisition of 7Up, saying such a move would be anticompetitive. Still, Coca-Cola kept Dr Pepper off the market because it had an exclusivity agreement, which was in place until August. That window gave us time to secure financing and prepare an offer for Dr Pepper.

In August, we successfully bought our hometown company, Dr Pepper, for $416 million. I remember telling my father before the bid was accepted, “My life may be about to change forever.” That was an understatement.

The Dr Pepper purchase delivered the late John Albers, Dr Pepper’s chief executive and a brilliant strategist, to our team. During a breakfast meeting at the Mansion, John sketched a plan on a napkin to purchase 7Up. John also presented plans to consolidate operations and cost centers between Dr Pepper and 7Up. A day later, we decided to go for it, but we were about to experience one of the most bizarre weekends of our lives.

Our soft-drink competitors now knew about Hicks & Haas. For 7Up, we planned to partner with the same investors, including Shearson Lehman Brothers and Cadbury Schweppes, that participated in the Dr Pepper purchase. Behind the scenes, Coca-Cola pressured them to withdraw from the deal, and they both did exactly that one day before scheduled New York presentations to 7Up’s owner, Philip Morris.

Normally, these financial commitments take weeks to finalize. We had one day, but we immediately went to Solomon Brothers and shook hands on an agreement at 3 am on Friday. In Texas, a handshake symbolizes a done deal. That was not the case in New York City. Having received the same heavy-handedness delivered to Shearson and Schweppes, Solomon withdrew from the team just hours before the Philip Morris presentation.
Normally, I am even tempered. Those are not the words that could be used to describe me that Friday afternoon. I learned an important personal principle and conviction: never give up.

Philip Morris didn’t give up on us; they changed the presentation deadline to Monday, still a seemingly unrealistic deadline to raise, for the third time, $245 million dollars. Our base of operations was at the Helmsley Palace Hotel. I remember calling one of the DLJ Merchant Banking Partners and asking, “What are you doing this weekend?” He said he was about to get in his whirlpool tub with his wife and have a glass of wine. “Guess again,” I said.

We worked 24/7 that weekend and secured backing from DLJ, which, at the time, was little known in the industry, as well as Bankers Trust and Citicorp Trust Bank. The details got finalized, but I do remember that John Albers spent most of the weekend at Saint Patrick’s Cathedral in prayer.
Monday, we presented our new financial commitment of $245 million for 7Up. Upon acceptance, we became the third-largest soft drink company in the United States. The key acquisitions that led to the designation occurred within a 90-day period.

We applied the “buy and build” philosophy to the companies. No LBO firm had ever done that. Some called us the “uncola” company because we stayed out of the cola wars between PepsiCo and Coca-Cola. We focused on the other soft drink choices. By keeping key leaders and managers (and in some cases, investor partners) in place at these businesses, we were able to reverse their histories of financial losses and create profits for them within two years.

Ultimately, that deal became a huge success story. It also transformed Hicks & Haas into a national LBO firm, and we joke that our graduates (H&H employees as well as my later firm, Hicks, Muse, Tate and Furst) occupy a good bit of the Crescent. I do believe that deal helped establish the city of Dallas as a powerful player in the investment world.

I also know and tell myself every day, even when times are tough, “Never, ever give up.”

Tom Hicks is founder, chairman, and CEO of Hicks Holdings.

35

Dallas Desegregates Its Schools
By Sam Tasby

35a Tasby

Dallas had the largest segregated school system in the South until 1961. That was supposed to change with the introduction of the Stairstep Plan that year, and Dallas ISD announced in 1967 that it was fully desegregated. The declaration proved to be premature. Fighting segregation in Dallas ISD’s schools was more complicated than it was in other cities, if only because those who opposed segregation didn’t have a definable opponent. There wasn’t one person loudly making the case for the status quo. There were only whispers. The whispers turned into threatening phone calls when Sam Tasby filed his landmark lawsuit on October 6, 1970. But Tasby, a World War II veteran, pressed on, even after it cost him his job.

Things have changed so much. Not always for the better, but you take the good with the bad. We still have problems. We always will, I suppose. I was in the Army, as a quartermaster back in 1943, and they sent me to France. We were good enough for Uncle Sam, but not good enough to work and fight alongside the white soldiers.

35b

Even after they integrated the Army, we still had to ride in the back of the bus. All that changed. My whole lawsuit started after we could ride anywhere on the buses that we pleased but we didn’t have a school in the community where my kids could go. People just didn’t want the black kids in school with their kids. They were subtle about it, but it was clear.

That’s one of the things that made it harder to fight. There wasn’t any one man you could point to, like that governor standing in the schoolhouse door in Alabama. This was almost everyone, and no one said it out loud, but they just talked around it. That’s why I knew I had to take it to the courts. We had some good lawyers.

Was I worried? Well, if people can go and kill the president here, they could take a shot at me. They’d call on the phone and threaten, but I never talked to them because I was at work—at least until I lost my job at the plumbing company in Garland when they found out what I was doing. My wife and kids caught most of the nasty calls. But we never had a thought of backing down. Not me and not my family. I had a lawyer ready to stand with me, and I knew we were doing what was right.

For a long time, it felt like we’d never see the end, and it wears you down some. When we finally got a judge (the late Judge Barefoot Sanders) who heard what we were saying, understood what we were trying to do, and was in our corner, we knew it was all worth it.

A lot of white people started running off rather than sending their kids to the black schools. That hurt the Dallas schools, and they were the ones who would have gotten the most out of spending some time with other people. I think those who stayed understood. It wasn’t perfect, but it was what was right. For all that and all the trouble, I’d do it all again if I had to.

There’s been quite a bit of change. There’s more coming. I’m 87 years old, so I’ve seen a long piece of it. People are different now than back when I had my lawsuit. Different from the back-of-the-bus days and even when I was serving in the Army in the war. They’ll keep on being different. The kids of these kids won’t even know what busing was, or white flight, just like they couldn’t understand the Army being segregated, except in history books.

Sam Tasby’s lawsuit initiated in 1970 led to more than 30 years of judicial oversight of Dallas ISD, as it strived to comply with federal desegregation requirements. Tasby is retired and living in Dallas.

Plus: Special Bonus Moment!

D Magazine Is Not Named The Dallasonian
By Jerrie Smith

In 1974, a bunch of upstart kids in Dallas had an idea for a magazine. But first they needed a name.

We were all pretty pleased with our concept: a city magazine for the city we all loved. For months we had shared ideas, discarded many, defined our philosophy, talked to city leaders in their offices and homes, and tried to figure out how to raise money to make it happen without losing control. Now we were almost ready to publish our first issue, but what should we be called?

I had had a lot of experience naming children (we have five), so when the day came to name our new magazine, I thought I could be helpful. Wick Allison, Jim Atkinson, a couple of creative graphics sorts, and I were sitting in our living room, all eager to come up with the right name.

The obvious quickly came to mind: Big D, The Dallasite, The Dallasonian, Dallas Monthly, Dallas, DallasScope, and the Dallas Texan. Someone even suggested using a different elaborate font for each month, a real challenge for the design team trying to come up with a cohesive look. Nothing had quite the right ring.

Remembering what architect Ludwig Mies van der Rohe had said years ago, on another subject, that less is more, I said, “D.” 

Thus our magazine was named.

Jerrie Smith is Stanley Marcus’ daughter and one of the original investors in this magazine.


Return to the 35th anniversary issue table of contents.

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