TrammellCrow: Benefactoror opportunist?

TRAMMELL CROW’s head is slumpec and his eyes are squinted shut, hiding behind his bushy red brows. His shoulder; are hunched forward and his right hand, resting in his lap, twitches slightly. He looks pained. In fact, he is pondering an answer to a routine question about the city’s arts district.

“We have kept a rather low profile until recently and I regret losing it,” he says, in a soft, tired voice. “Don’t make me news. I’m not news.”

Well, even Trammell Crow has to be wrong sometimes. He has starred in headlines such as “City says Crow changing stands on arts district,” and “Crow 1, City 0,” and “Crow rethinking arts donation.” All of which, he says, have left him “with some lingering hurt over the criticism that was leveled against me, which was unjustified, by Mr. Suhm.”

Mr. Vic Suhm, assistant Dallas city manager, also has some lingering hurts, though probably nothing that could not be cured by a long-term, no-cut contract. He touched off the arts district powder keg with a March 9 memorandum to his boss, City Manager Charles Anderson, that was somehow intercepted by Frank Clifford of the Dallas Times Herald. When Suhm talks about that memo he sweats just a bit and acts, on the whole, like a man who has had three too many cups of coffee.

Had Suhm been writing about any other man or any other development project, his memo might have been ignored. It caused a fury for two reasons: First, it strongly criticized a position held by one of the city’s patron saints, and second, it had a ring of truth. It raised what, in the news business, is a very sexy question: “Tram-mell Crow: benefactor or opportunist?”

As most informed, literate Dallasites know by now, the dispute started when the city planning department announced that it would ask City Council to officially define the boundaries of the arts district. Under the city’s proposal, the district would have included some 9.5 acres of land held by Crow’s daughter, Lucy Bill-ingsley, east of Routh and between Central Expressway and Woodall Rodgers Freeway. The Billingsley property had been included in conceptual drawings of the arts district since 1979, before Tram-mell sold his holdings to Lucy. Suhm and Jack Schoop, head of the city’s planning department, thought it would be no big deal.

It was a big deal if you owned the land. Lucy Billingsley’s investment might easily be worth $41 million under its current zoning, which allows construction of just about anything. An official “arts district” could carry with it restrictions on the height, size and appearance of buildings. Say those restrictions reduced the property value by 10 percent – that’s $4 million of Lucy Billingsley’s money. Lucy did not grow up in Trammell Crow’s house without learning a few things about business.

She decided against including her land in the district, and says her father might not have made the same decision but could understand her reasoning. “I got my father involved in this dispute, and he just backed me up,” she says. “I take a much more aggressive stand than he does.

“I think there’s a potential that restrictions could be placed on the land that would be so burdensome that they would ruin the value of my investment,” she explains. “I think the concept of the arts district is just great… but I want to know what restrictions I’m committed to before I am committed to anything.” In other words, she won’t sign a blank check.

The city’s position, stated in separate memos by Schoop and Suhm, sounded equally reasonable.

Crow had presented the city with a plan in May 1979 that called for an arts district stretching through the land he owned then, and later sold to his daughter, Schoop noted. On March 13, 1980, the Crows attended a city-sponsored meeting of “all people in the proposed district [including all land east of Routh].” And in October 1981 the city vacated certain streets in the Crow holdings east of Routh “on the basis of (1) ’buy-back’ provision for portion of Flora that might eventually be bought by city for a cultural facility at that location and (2) Mr. Crow stating intention to develop in support of the arts district.”

If Crow were allowed to “buck,” Schoop said, why couldn’t other developers? If there were no arts facility on the Crow holdings at the east end of Flora Street, the pedestrian mall connecting the Dallas Museum of Fine Arts and the proposed Concert Hall, at the west end of the district and in its center, respectively, would have “no destination and no apparent justification.” And Schoop wondered whether other developers should “be required to build a district at Crow’s front door to Crow’s benefit without Crow’s comparable ’investment.’ “

Suhm sent that memo to Anderson, after attaching a cover letter of his own.

Changing the district’s boundaries, Suhm wrote, would be a “grave mistake.” It would tell other developers “that Crow, not the city, is in charge.” It would weaken the hand of the new arts district coordinator, Dr. Philip Montgomery.

“Trammell Crow was verbally supportive of the arts district throughout his efforts to secure public right-of-way abandonments needed for his land assemblage east of Routh Street; his tentative . . . plans for development of this land have consistently indicated a close relationship with the arts district,” Suhm wrote. “It appears that Mr. Crow desires all the spinoff benefits of the arts district without assuming any of the responsibilities associated with creating and maintaining a quality district.” (Later, Suhm explained that when he said “appears,” he meant “would appear to the public”)

The memos “didn’t say anything that wasn’t the truth,” according to Dr. Montgomery, but the overall impact of Suhm’s memo – perhaps because its author never meant for it to become public – was unfair. First, it assumed that Trammell controlled Lucy’s land. By saying Crow had been “verbally supportive,” it implied that his support extended only to verbiage. And it equated “responsibilities” with agreeing to legislative control over the land, as opposed to voluntarily building a quality development.

Naturally, Trammell Crow picked up on those hidden, perhaps unintentional, barbs. Mayor Jack Evans, who presumably saw things from the city’s perspective, says he was “appalled” when the memorandum was publicized. “I called him and apologized,” the mayor recalls.

Crow took it hard, nonetheless. He has built a reputation on being as good as his word, and his skin, on matters of good intentions and civic duty, is rice-paper thin. “I’ve been amazed at how this has affected him,” says Lucy. “It came at a bad time, when he was really trying to help the city.”

Her father, she says, “has mellowed. He no longer builds buildings for the dollars and cents.” Indeed, he hardly has to, except to protect the livelihoods of his partners and employees. Trammell Crow is 68. In the early Seventies, Fortune magazine estimated his family’s net worth at approximately $100 million. He is one of the largest-if not the largest -of America’s developers. He has more than proved himself as a businessman, and Ms. Billingsley says he wants to be known as a “contributor to Dallas.”

Ironically enough, one of Crow’s initial reactions to the Times Herald story was to say that the bad publicity might well cause him to cancel his plans to contribute to a $10 million donation for the arts. In an interview with Lyn Dunsavage of the Downtown News, Crow said that good friends of his who are fund-raisers for the Dallas Symphony Orchestra advised him that such a contribution “would be viewed as my buying off” arts supporters. “They’ve advised me to forget it,” the Downtown News quoted him as saying, and it added that Crow was “reconsidering” and thought his friends “may be right.”

If Crow was trying to get someone’s attention, he succeeded. Symphony Executive Director Leonard Stone said he had “no idea” Crow was considering making such a huge donation, and quickly added that Crow has been “extremely generous” to the symphony in the past. The association’s board chairman, Richard 1. Gal-land, said, “Of course we wouldn’t be offended by any offer of money.”

Crow’s declaration was greeted with smirks in some quarters of the arts community, where it was viewed as a peevish, rather clumsy way of not donating $10 million to charity, on grounds of moral scruples. “I saw that and I thought, ’Hey, I’d like to try that,’ ” says one of the city’s premiere arts supporters. Even one member of Crow’s immediate family was surprised. “I was stunned twice,” says Lucy – first that her father was considering such a donation (“I wasn’t aware of any conversations”) and second that he would discuss it with a reporter. “I think it was completely off the record, and I still don’t know how credible it was, anyway,” she says. “I don’t know if Dad had been thinking about that, and to what extent.”

Another Crow intimate, however, says he knows for certain that Trammell and a friend, a long-time supporter of the symphony, were thinking about giving $5 million each to the orchestra. After the news came out, he says, the friend called Trammell and told him, “I’m still giving my $5 million, but you can’t give yours.”

It seems unlikely that Crow would deliberately plant a story about his cancellation of a donation, or any of his charitable plans. The news could only lead to resentment, or to other groups making more claims on his time and generosity. Ms. Dunsavage says the comment arose while Crow was lamenting the effects of what he saw as inaccurate attacks on himself-one effect being his inability to carry through with the gift -and that the conversation hopped on and off the record. Crow “could have a reason to think” that the remark was not to be printed, she says.

Crow evidently did think the remark was private. “I didn’t expect it to be printed, and it wasn’t exactly accurately reported,” he says. “But more than that, I don’t want to say. 1 want that forgotten.”

Will he give a donation, then? “Of course we’ll give a donation. I don’t know what, but certainly we will. We always do and always will.”

Almost always. George Charlton, chairman of the board of the Dallas Museum of Fine Arts, says that more than 20 donors contributed $500,000 or more to the construction or endowment funds for the city’s new museum. Trammell Crow, he says, was not among them. More than 1,500 donors contributed something to the museum’s efforts, which netted $21.5 million. Charlton and Irvin Levy, president of the DMFA Board, say Trammell Crow was not among them, either.

But the museum may not be a fair measuring stick, for there was bad blood between it and Crow by the time fund-raising for the new building got into high gear.

Before the 1978 bond issue for arts facilities was rejected by city voters, the museum had owned options on several blocks in the proposed arts district, including the entire city block east of Har-wood at Ross, opposite the museum’s designated site. The museum’s option on that property lapsed after the bond issue failed.

Before the option could be renewed, Crow bought the land at about $20 a square foot. It was a very shrewd move; the property is now worth $125 a square foot, thanks to the growth of the Central Business District. Crow correctly saw that the Ross-Harwood area was just ahead of the downtown development wave, and he thought that an office project was the only sensible use for the land.

Museum supporters, however, thought the only sensible thing to do was put the symphony hall, or a park, or some sort of cultural facility, on the land. They wanted to protect their investment, which was the museum. And they felt that, in a sense, Crow had walked away with their land. Things got pretty emotional. Crow had a meeting with Levy and several other arts leaders and, Levy recalls, “expressed his view that this was an ideal site for an office tower and commercial development and that a park would block the natural growth of the city and would not be in the best interests of the city.”

Indeed, there was a brief panic when museum leaders heard a rumor that a land broker was trying to buy options on the museum’s own block, saying he was “working for Trammell Crow.” But Crow says he “backed off any efforts to acquire that land after learning of the museum’s plans.

At any rate, the land fight left some bad feelings, and one could excuse Crow for not standing in line at the museum’s deposit window.

Lucy Billingsley says her father has not been a “patron of the arts” in the same multimillion-dollar style as, say, the Eugene McDermotts, but that he has been a steady contributor to several cultural activities. “He has been all his life,” she says. “1 can remember as a kid going to something where he had paid for the scenery. And he loves those things… I have never understood opera; I always felt that when I was an adult, I would. But my father happens to love those things. He would come home and listen to an opera on the radio.”

So. Benefactor or opportunist?

Crow’s major dealings with the symphony suggest that he is both. Mayor Evans, who was instrumental in the eventual hatching of the arts district, says that Crow has, through the years, tried to engineer deals beneficial to the city and to himself. “He’s a tough-minded businessman, but a lot of people have not given him as much credit for what he has done for the city as he deserves,” Evans says. “He has given much more than he has taken.”

’Hell, we offered the city free land for a symphony hall, and they turned us down,” says Harlan Crow, Trammell’s son. “It happened about three different times.”

The first time was around 1978, according to Philip R. Jonsson, who at the time led the symphony board. Crow had purchased the P.C. Cobb Stadium and offered to build a hall which he would give to the city. The symphony would use it at night, and Crow would retain the right to use it in the daytime for his nearby Market Center. “It wouldn’t have been a grand building, like the one I.M. Pei is going to build, but it would have been a good, functional, usable building,” Crow says.

Jonsson, however, says the symphony did not pursue the idea because it never could “establish what quality of hall was going to be built. He [Crow] made it absolutely clear that he would be in charge of the design and the construction… He was saying at the time, curiously enough, that he could build it for $10 million.” The planned symphony hall will cost at least $40 million, and symphony officers have said through the years that they did not want a new hall unless it was of the highest acoustical quality. “I have no criticism about it; it was just something we were not wildly enthusiastic about,” Jonsson says.

In May 1979, six months before the symphony’s land-purchasing funds were approved in a city-wide bond referendum, Crow made another offer. The symphony could build its hall on several acres of land that he owned at Routh Street just east of Flora – the site Ms. Billingsley now owns. Around the hall, in a crescent of property also owned by Crow, would be acres of residential development.

Philip Jonsson says the symphony did not accept the offer because “it was so far from the museum that a number of our biggest supporters did not like it at all,” and because Crow envisioned patrons of the hall and residents of his apartments or condominiums using the same parking facilities.

“How could the symphony be assured that it would have parking.. .and that the residents of the apartments would move their cars when we had concerts? That question was never resolved to my knowledge,” he says. Neither, he adds, was the price of the land. Crow recalls offering the land at his original cost – which would have been about $5 a square foot, a real bargain – while Jonsson remembers Crow promising that if the city bought some land for the hall, he would donate other acreage, the amount of which was never specified. “We never did get that close to a deal,” Jonsson says by way of explaining the ambiguity.

“I think there might have been a little emotion involved,” he adds, referring to the fallout from the museum land battle. Some members of the symphony board thought Crow might be trying to feather his own nest, using them as the centerpiece for a luxury condominium project. Harlan Crow calls that attitude “small-minded,” and notes that the land would get steadily more valuable with or without the symphony hall. The presence of a hall would not increase the value of office property in the area, and would have only slight impact on the price of residential land, he says.

Lucy says she does not know what she will build on the property, and Harlan says the market for downtown condominiums is weak. But their father did plan to build luxury housing units near the hall, and a principal in the LWFW consulting group, which researched arts district economics for the symphony, says, “He was very far-sighted. The data we’ve seen suggest that he was very smart.”

Despite the rebuff in 1979, Crow renewed his offer last summer, when the symphony was on the verge of giving up its search for a site within the proposed arts district. “Trammell and Lucy came to us and offered to make land in that general area available to us at fair market cost and to make a very generous contribution along with that,” Stone says.

How big a contribution? “Whatever it was, it was a very substantial gift,” says Dick Galland. But, he adds, Crow’s land “was not the first choice of the site committee, and frankly the gift we got from the Borden people [of land closer to the museum] was more attractive to us, and we accepted it.”

Trammell Crow has made his fortune by seizing opportunities and striking deals. Might the symphony donations also have been opportunities? Would Crow be likely to mix a little business with charity? “I think,” says Mayor Evans, “that that is a very good analysis.”

It is not an analysis that makes the Crows look bad, nor should it raise fears of their taking advantage of the arts. Lucy, after all, is on the symphony association’s board. Her brother, Tram-mell S. Crow, is a member of the committee that is helping to move the DMFA from its old quarters to the new arts district facility. Lucy and Harlan were the first -and as of early April the only- landowners to contribute their share of $20,000 each to cover the cost of planning the arts district. Harlan says he will give up a substantial portion of his development rights in order to create a park or plaza in front of the Museum of Fine Arts. Lucy may or may not want to enter the arts district once she knows what that would mean to her.

Which brings us back to the memorandum and why it was unfair. Crow has not arbitrarily changed his mind about whether Lucy’s land should be part of the arts district. Rather, time has changed the circumstances under which he offered the property.

In all his talks with the symphony, Crow was offering a quid for a quo. If the symphony located near his property, his land would develop more rapidly and, to some extent, would be more desirable for luxury condominium buyers. In return, Crow was willing to donate land or sell it at cost or give a cash gift. He was, in other words, offering a business deal.

Once the symphony moved three blocks west of his holdings, Lucy had little to gain from any “arts district,” and a lot to lose from the district’s attendant zoning restrictions. So Trammell opposed including Lucy’s land in the district. He had not reneged on his word; the deal was, quite simply, off.

Trammell Crow did not get where he is by letting people walk all over him. When he supports the arts district, as he says he will, he will support it on his own terms.