September 10. 1985-Annette Strauss, mayor pro tern, punches a button and the new InterFirst Plaza building is instantaneously illuminated, seventy-two stories of blinding, vertical, green neon.
The long green-the splendid, perfeet metaphor for downtown Dallas and all that it represents. Inside the structure that now dominates the skyline, a conventional assembly of civic-spirited patrons chip in more than 100 grand for the Dallas symphony.
Nearby, in the West End saloon district, the proletariat experiences the light and trembles in reverence, like Toto and the Tin Man at the feet of the almighty Oz.
October 1985-Midnight at the oasis. Sheik Yamani finishes off a heaping platter of Coat McNuggets and suddenly decides that the price of oil should be determined by the dictates of a free and open market, so that Saudi Arabia and OPEC! can maintain their market share. Back in Emerald City, U.S.A.. the news is greeted with a collective gulp and a question: “What does this mean?”
February 19, 1986-Night cometh. But the InterFirst Plaza building is shrouded in shadow. Another night passes and the long green neon remains missing in action. The following day, Gayden Scott, spokesperson for Bramalea Limited, managing developer of the InterFirst Plaza tower, announces that the long green will be absent from the Dallas business district for months and months to come. Unforeseen difficulties. “The glow was fading ” she says. “and some of the tubes were flickering and dying.”
What timing. Such irony.
Months earlier downtown Mexico City had been devastated by a massive earthquake. But when the price of a barrel of oil plunged from twenty-eight dollars to fifteen dollars to eleven dollars, the general effect on downtown Dallas was almost as cataclysmic, if less publicized than the Mexico City destruction.
The only significant difference was that all the rubble and all of the heartbreak weren’t out there in the streets. In Dallas, at least at first, the disaster zone was confined to the balance sheets of major lending institutions. Gradually, though, the news began to surface.
Dallas had been blindsided by an earthquake, all right, and it registered a perfect ten on the financial Richter scale.
The most immediate casualties came from a regiment of local oil and gas boys. Prosperous from forty-dollar oil and secure in the belief that the price was preordained to rise to ninety dollars, they borrowed heavily and diversified into other areas, such as commercial real estate.
With oil hanging at twenty-eight dollars through late 1985, most were surviving, though tiptoeing along a precarious tightrope.
Then came the thud. A Dallas investor who admits to being a ninety-dollar-a-barrel dreamer and who, like most of the people interviewed for this article, requested not to be identified, described the crash this way: “It was like you’re walking down the street naked . . and then all of a sudden the cops drive up.”
Suddenly, words such as bankruptcy and foreclosure became by words of the Dallas upper crust argot. The aftershocks of the Great Dallas Quake of ’86 were relentless.
You could feel them at the Cattle Baron’s Ball last June, when Ray Wylie Hubbard, working as backup entertainment for Alabama, came on a little too cynical for the tastes of the $600-a-pop crowd, which was noticeably more somber and less self-congratulatory than in better times. Hubbard had been requested to hype the $100 chances on the new Mercedes that was being raffled. Ticket sales were sluggish. “What’s the matter?” drawled the progressive hillbilly entertainer in sarcastic tones. “Don’t any of y’all need another Mur-say-dees?”
“I don’t think I’m gonna be invited back to the Cattle Baron’s next year,” he later was heard to mutter. That’s a foregone conclusion, Ray Wylie. If the current economic climate prevails, Deena the Chimp will be the headline attraction at the Cattie Baron’s, while the Cattle Barons themselves will be out chasing rustlers and eating Ranch Style Beans out of a can. The Crystal Charity Ball, in the meantime, will take on a new format: the Zircon Pot Luck Picnic, held in the parking lot at the Bronco Bowl.
Bicycle polo will be the new rage at Willow Bend. Members of Dallas Country Club will be making discreet inquiries as to how much it costs to join the Lions Club.
Make way for the emerging new social force in Dallas: the Nouveau Broke.
The practiced eye can spot them. Notice the well-tanned young woman from the high-cheekbone set as she shops at Marty’s. Notice that little white area around her left wrist. That’s where the Rolex used to be. Notice also that she leaves the store with a bottle of the best that Ernest and Julio, the proud Gallo brothers, have to offer.
There are those who will tell you that there are no hard times in Dallas, and that all these tales of doom and gloom are simply another product of the imaginations of the wicked media. “Bankruptcy. What’s that, after all. but just a piece of paper?” a leading Dallas socialite was heard to scoff recently.
However, there are many, many others who are not afraid to step forward and freely admit that around Dallas these days, things aren’t worth a damn.
Scott Fickling owns St. Martin’s on Greenville Avenue, an establishment that falls into the stylish bistro category. “My business is off maybe 10 or 15 percent at St. Martin’s and I’ll bet it’s higher than that at the pricier spots, like the French Room,” Fickling says. “I’ll guarantee it’s down 25 and 30 percent. The fur coat crowd doesn’t seem to be getting out like they used to. Well, they might be getting out, but they’ve also developed an affinity for the lower-dollar entrée.”
Fickling. though, is fortunate in that he also owns the nearby San Francisco Rose, a more affordable four-dollar burger establishment and the type of place where the Nouveau Broke now congregate. “A lot of my old customers from St. Martin’s are turning up more and more at the Rose, particularly for the free happy hour buffet,” Fickling says.
Fickling is quick to dispute the significance of the missing Rolex. “The Rolex is still on the arm,” he says. “The furs, however, are gone.”
Dub Cornelius is sales manager at Overseas Motors, where they sell Jaguars, the car that he describes as “the new Preppie-mobile.” Cornelius says that his business is down “by a good 20 to 25 percent” on new Jags, which carry a window sticker price that ranges from $37,000 to $45,000.
“You’ve got a certain percentage of people who might have lost millions in the oil crash, but for them, it’s like a ripple in the lake, and they’ll come in here and pick up a big-ticket item for their children’s birthdays,” Cornelius says. “But where we’re losing business is more the marginal group, on the fringe of a situation where they could afford a $40,000 car. They’ll still come in here and look, but they tell you up front that they can’t afford the car. But when they leave, they say. “One of these days, we’ll be back.1 We’ve had some down dips before, like when interest rates skyrocketed during the Carter days. I’ve never experienced a slump like this one, though.”
ALTHOUGH WILLIAM KUGLE HAS NEVER REMINDED ANYBODY of Atticus Finch, or Abraham Lincoln for that matter, he definitely qualifies for the role of backwoods lawyer and philosopher on matters concerning the human spirit.
Every weekday, Kugle wakes up early- waters his okra patch, shoos several dogs from the cab of his pickup truck, and drives about twenty miles into Athens, Texas. The town square in Athens provides as much exposure to urbanization as Kugle’s sixty-one-year-old system will tolerate. He is reminded of this on the rare occasions that the direst of professional necessities force him to come to Dallas. The most recent such visit was last September, when, despite his customary apprehensions, Kugle was totally unprepared for the spectacle he would encounter while representing a client in a bankruptcy proceeding in the Earle Cabell Federal Building on Commerce Street.
Of course, bankruptcy courts provide the ultimate barometer for the economic well being, or lack of same, of a city. In Dallas lately, bankruptcy court has been an arena of frenetic activity, where everyone from the three Hunt brothers to Luigi, the humble shoemaker, have come to have legal last rites read over the corpse of their financial lives. Courthouse regulars are getting used to bankruptcy on the mass production scale. But for an outsider like Kugle, who had been insulated from the desperation of the current situation, it was shock time.
“I had handled about nine or ten bankruptcy cases in my career and all of those took place at the federal courthouse in Tyler,” William Kugle says. “And those proceedings were about as routine and mundane as going to the courthouse to buy automobile license tags.”
The setting in Judge Harold Abramson’s court on the fourteenth floor of the Federal Building was more akin to the Continental Trailways station on the Friday night before Christmas. The sheer numbers of bankruptcy cases overwhelmed Kugle. “I’m not exactly sure how to characterize the scene in there, except that I’ve never encountered anything like it in umpteen years of practicing law and a few years in the Texas Legislature prior to that,” he says.
“Each case is assigned to a group, so the eleven ociock group goes and sits behind the 10:45 group and so forth. The judge [Abramson] was pretty irascible, eating lawyers out right and left. I can’t say that I blame him.”
Each group of persons filing for bankruptcy is called before the judge en masse when their moment comes. They proceed to the bench and take the plunge into protected penury all at once (“sort of like being sworn into the army at the recruiting office”). Fortunately for Kugle, he was able to get his case done without incurring the wrath of the judge. Other attorneys have indicated that dealing with Abramson these days is about as delightful as going after a copperhead that’s trapped under the house.
And who’s to blame the judge? Abramson is one of two bankruptcy judges in Dallas, the other being Robert McGuire, and their caseloads have increased spectacularly during the past year. In 1984. Dallas had 2,043 bankruptcy filings; in 1985. 3.396. The projections for 1986 are for well over 5,000, with a record 578 for the month of August alone.
Meanwhile, “Gimme Shelter” has been adopted as the official marching song at the federal building in Dallas. It’s almost as if the bankruptcy court is where the swinging “in” crowd is hanging out these days. Everybody knows everybody.
“Well. I’d hardly describe the atmosphere as festive.” says Kugle. “But the people there are nicely dressed, nice-looking people. They certainly don’t appear to be a bunch of deadbeats in there trying to screw their creditors.
“Everyone seems to be under a terrific burden. I guess that says a lot about the times in Dallas right now.”
OFFICE EQUIPMENT OF EVERY DESCRIPTION. .. DESKS. FILING cabinets, and all forms of electric business machines, are arranged on a vacant lot near Bachman Lake. Perhaps seventy-five persons are prowling the premises, poking through the merchandise.
This spectacle, a foreclosure auction, is something else happening new more than before, another sign of changing times.
A representative of the constable’s office is here along with a hard-eyed woman lawyer who represents the creditor.
But the man in the spotlight is Lonnie Gordon of Mesquite. He’s the auctioneer, one of those professionals who prosper during difficult financial times. “A lot of auctions are not conducted because of financial distress, but, yes. most of the auctions I conduct are of the liquidation variety, on behalf of a lending institution or maybe the Small Business Administration,” says Gordon, who works for a straight percentage of whatever he can coax from the bargain hunters on hand. “It’s hard for me to believe that Dallas and Texas in general is hurting as bad as people say it is, but business for me has never been better. Definitely. In the past month or so, I’ve auctioned off everything from old plow bolts to a Cessna airplane.”
The inventory in the vacant lot on this occasion is not very promising. The key item is a large computer system that, when brand new, was worth something in the neighborhood of seventy or eighty big ones. Gordon is saving the computer for last.
The desks, chairs, and filing cabinets are auctioned off in groups and are dispensed with rapidly. Men in trucks buy the stuff and haul it away. This same merchandise will be offered for sale shortly in the classifieds and the new owner will part with it for 15 percent more than what he paid at the auction.
Gordon auctions off the typewriters and calculators individually. Most of the stuff is pretty beat up. A man bought about forty chairs for four dollars apiece.
Finally, the computer is offered. Gordon coaxes, cajoles, and begs, but the bidding finally stops at less than $2,000. The buyers at the auction had done their homework and knew that something was haywire with it.
The take for the entire stock in the vacant lot is less than $10,000. Gordon is a little bit disappointed about the final score, but still seems to have enjoyed the whole thing immensely. And while the $10,000 wasn’t one of his belter days, he can always look forward lo the occasional three-quarter-of-a-million-dollar afternoon like he had recently at a sale just north of Dallas at Princeton.
“Mostly, that was a lot of oil field equipment. Drilling rigs and so forth. People come from all over the United States to get in on those,” Gordon says. “I understand that most of the buying was being done by people representing Chinese markets.”
Gordon realizes that to a certain extent, his livelihood is coming from someone else’s misfortune. “I feel a lot of sympathy for some people, particularly the true farmer who went under with a farm that had been in his family for several generations,” he says. “But you also run across a lot of high rollers who went broke mostly because of an extravagant lifestyle, always running off to the Bahamas or wherever and not paying attention to business. I find it hard to feel too sorry for those folks. But that was one of the first things the old Colonel taught me at auctioneer school, that long cars and long-neck bottles will start you on a downhill slide and eventually bury you under the hill.”
THE COMPELLING QUESTION AROUND DALLAS NOW IS THIS: how did so many high-dollar heavyweights manage to get themselves into so much difficulty in Dallas, the Daddy Warbucks of civic enterprise? Dallas, the city that works? Dallas, the city with no limits’ Suddenly, the whole tapestry of affluent Dallas seems to be unraveling taster than a teenage marriage.
A well-placed Dallas business source, who prefers to remain anonymous and shall be referred to as Cheap Throat, believes his situation is typical of what has happened to so many in the Dallas business community. Cheap Throat speaks in the tone of a man who was involved in a nasty auto accident and is trying to tell his side of it to the traffic officer.
“I guess it all slarted back in 1979 when the price of oil was at forty dollars a barrel and we were all so confident that it was destined to rise to ninety dollars,” he says. “I remember one promoter came to me and said it was my “patriotic obligation’ to invest in one of his drilling operations. Even though we realized that oil was, after all, a commodity, we never dreamed that the price was destined to fall.”
Cheap Throat says that life was still manageable when oil dropped to twenty-eight dollars a barrel. “Well, in my case it still provided aoout $28,OOO a month, which sus-tained a second home in Aspen and some other items. Then the income fell from $28,000 to $11,000. It was liquidation time.”
Of course, the plunge of oil prices couldn’t have been more ill-timed for Dallas. The commercial real estate market, which had made millionaires of untold dozens of young turks, was seriously bloated and beginning to rupture.
’”Well, the tax laws made it so advantageous to invest in commercial real estate ventures, and the savings and loan institutions were so willing to provide the funding, that a glut situation in the market was inevitable.” says Oliver Mattingly. a real estate analyst for M/PF Research. “Tax laws and S&Ls. These turned out to be the ingredients fora helluva cocktail that was pretty explosive,” Mattingly says.
Mattingly has a simple explanation for the slowdown. He believes that “75 to 80 percent11 of the commercial projects in Dallas should never have made it off the drawing board. “They were ill-advised and begun with no substantive pre-leasing,” he says.
Thus the glut. Mattingly indicates that the market in Oak Lawn will recover (“at least, in my lifetime,” he adds, throwing in the kicker). “Of course, up there on LBJ. from the Parkway heading east, that might be another matter.
“I was at a meeting with a group of architects the other day,” Mattingly says. “I had just turned sixty and most of them were probably under thirty and weren’t old enough to remember that Dallas went through a slump like this in the Sixties and again in the Seventies. The irony is that a lot of the real estate developers in bankruptcy now are the same guys who were in trouble in the Seventies and many of them are using the same banker they did when they went broke the first time. Who’s the dummy now?
“Anyway, the young architects are all saying ’What are we gonna do?” Well, my answer is that you don’t do much of anything for a while, tighten your belt, and hope things change for the better.”
In times like these, the membership of Nouveau Broke Society is not timitcd. Everybody joins the ranks of the walking wounded-especially the “little guy’-the salaried worker at the oil company or the real estate company, the software company or the City of Dallas.
For these people. Chapter 11 is not the escape hatch. The salaried worker is turning to something that to many would have been unthinkable a couple of years ago: collecting unemployment benefits.
A HEFTY PERCENTAGE OF DALLAS’S NOU veau Broke are headquartered out on Camp-bell Road in Richardson. This is where the Texas Employment Commission, sometimes known as the welfare office, is located, and if business gets any better they may have to construct an upper deck. If you’re planning to visit this office on official business, eat a big breakfast and come early. The wait will be several hours, and a sign inside the facility indicates that consumption of sack lunches is frowned upon. In June, the Campbell Road office’s list of unemployed people claiming benefits went over 10,000-a new record. For July, the number had climbed over 12,000. “We’re seeing more and more people who are out of work for the first time since they were in college, highly trained professional people who had the same job tor twenty years. They come in here in a state of shock. Eventually they become sullen, depressed, somber, and scared,” says Joanna Parker, a claims supervisor.
And with good reason, since so many of them are in one hell of a fix.
“The problem for highly educated professionals is that they are the sort that many potential employers are reluctant to hire,” Parker says. “The person who is overqualified tor a job will also be looking around for something better, and as soon as they find it. they’ll leave.”
According to Parker, more and more of these types are leaving this area. Her office deals with growing numbers of people who register for the $210 a week maximum unemployment benefit in Dallas and then file their claims through offices in other states.
Rick Steadman has watched his once-handsome oil royalty checks turn into ugly, pitiful little things that he could probably cash on a DART bus. He owns a shopping center north of Dallas, at one time a potential gold mine that is now a tax write-off that he doesn’t need. Rick’s been trying to sell the center for a year, but so far, no takers.
The $2 million redecorating project on his house was finished in the summer of 1985. “It probably looks pretty nice. I don’t know. I’ve been out of the house for a long time now,” he says.
Steadman is going through a hotly contested divorce and is now living in an apartment on Cedar Springs. The only people he talks to regularly are his accountant and his wife’s lawyer. If anybody in Dallas qualifies for the title of Mr. Nouveau Broke Dallas, 1986, it is Rick Steadman. And as he contemplates a future of Life Under Chapter 11, Steadman looks at the bright side.
“Well, for one thing, unlike a couple of guys I know, I haven’t borrowed any money from gangsters, or loan sharks, as they are sometimes known,” he says. “When you’re filing for bankruptcy, these are not the kind of creditors that you list with the courts.”
Steadman says that the most troubling aspect of being Nouveau Broke is not the material loss. “I’11 tell you what goes out the window with the big car and lake house,” he says. “What goes is most of the people you thought were your friends.
“I guess that’s the thing that hurts worst.”
ON OCTOBER 24. 1986, THE LONG GREEN neon of InterFirst Plaza is scheduled to reappear on the Dallas skyline. Cosmetically, the city will make a comeback. But how soon the laughter will return to what used to be the enchanted land of finance remains uncertain.
“I’ve seen too many cycles come and go to think this is the end,” says A.C. Greene, the author, lecturer, and historian who has chronicled the mood shifts of Dallas for almost three decades. Greene has always been quick on the draw when it comes to offering assessments of Dallas that are not entirely flattering to (he civic ego, He refers, for instance, to the grandiose parties pitched by the well-to-do as “social diseases.”
Greene surveys the current situation in Dallas-brought on. he says, by “bankers making all those stupid loans’-and expresses hope that as Dallas struggles back to its feel, some much-needed humility and humanity may materialize.
“If you’re regarded as a ’leader” in Dallas, then that’s based 100 percent on how much money you have,” Greene says. “In Dallas, it doesn’t matter how you got it just as long as you have it. We put our value on the people who buy the art. not the people who make it.”
Greene believes that the financial glitter will return to the city. He’d like to see Dallas stop taking itself quite so seriously.
“Cities like Austin and Fort Worth and San Antonio are very secure in their own identities and have a lot freer attitude about life,” Greene says. “Dallas has always been too concerned with trying to be something that it’s not. When the Republicans came to town in 1984, all the stories in the papers dealt with what the delegates from the various parts of the country all thought about Dallas. Can you imagine the San Antonio papers sending flocks of reporters out to interview people and ask them what they thought of San Antonio? That’s why I like places like San Antonio and New Orleans. They’re kind of like your drunk uncle. Sometimes you wish he wouldn’t come over at 3 a.m. and bust up all the furniture, but you’re still glad to have him around.
“I wish Dallas was more like that. Really, our self-image is not very good. Dallas is like a teenage girl. She’s beautiful, but she spends ail her lime standing in front of a mirror trying to find a zit. Maybe if some of those Nouveau Broke people can learn to laugh at themselves a little bit, that situation could change.”
September 10. 1985-Annette Strauss, mayor pro tern, punches a button and the new InterFirst Plaza building is instantaneously illuminated, seventy-two stories of blinding, vertical, green neon.