WORDS AND PHRASES USED IN AMEGY’S ADVERTISING 199 1993 ad—It Ain’t Bragging if You Can Do It We Are Bringing Hometown Banking Back to Our Town Enduring Relationships Tangible Results Everything Counts Everyone’s a Prospect Community Services Are A Responsibility Headlines and ad concepts focus on the customer experience and how Amegy supports the local community.
200 AN AMAZING LIFE Knowledge + Passion = Results Capital + Commitment = Meaning for Success Technology + Diligence = Real Time Solutions Depth + Proximity = Measurable Growth Ability + Dedication = Enduring Relationships Resources + Vision = Positive Impact Expertise + Creativity = Tangible Results We used a series of “plus/equals” phrases to communicate our key values and commitment to customers. Amegy Bank has always been an active member of the communities we serve.
WORDS AND PHRASES USED IN AMEGY’S ADVERTISING 201 Videos and commercials provide insights into how we help clients to grow their businesses.
A CRITICAL TIME—WORKING WITH THE FEDERAL RESERVE 203 A Critical Time— Working with the Federal Reserve Lending Credibility to Southwest Bank I n January 1992, Southwest Bank was two years old, when I was appointed to the Board of Directors of the Dallas Federal Reserve, Houston Branch. The Federal Reserve System, set up in 1913, has 12 Federal Reserve districts with a regional bank for each district. These twelve banks, along with the Board of Governors in Washington, D.C. make up the nation’s central bank, overseeing monetary policy as well as supervising and regulating banks. They also provide financial services to the banks in the district as well as the U.S. government and foreign official institutions. The Federal Reserve Bank of Dallas is in the 11th Federal Reserve District, which includes Texas, northern Louisiana, and southern New Mexico. The Dallas Fed is the only one where all external branches reside in the same state; those branch offices are El Paso, Houston and San Antonio. The Houston branch is located on Allen Parkway in the Fourth Ward of Houston. The 297,000-square-foot building, completed just as I was appointed to the board, was constructed of brick and blue structural glazed tile. It included the second largest currency vault in the country. I was chosen for this six-year term because I was at the only bank starting from the ashes of the banking disaster. I had been at “ground zero” in working with the business community and could respond with some degree of knowledge and experience to the Fed’s questions. I had over 30 years of banking experience and knew the challenges that small businesses were facing. The year 1992 was one of the busiest and most productive in the history of the Dallas Fed. The District’s economy was still on the rebound from the sharp contraction of the late 1980s but had managed to avoid the recession plaguing the rest of the country. It was, however, impacted by the sluggish recovery. Bank lending stabilized in 1992 for the first time since 1985 but the credit crunch continued to impede job growth in small
204 AN AMAZING LIFE and medium-sized businesses that relied on banks for credit. In spite of the constraints, however, these businesses were leading the economy in the creation of new jobs in the 1990s.7 My good friend and customer Leo Linbeck became Chairman of the Fed Board in Dallas, during my tenure. I was able to provide some critical intelligence at one time to Federal Chairman Alan Greenspan. Greenspan actually lost interest in a very expensive recovery idea he and Leo Linbeck had after I assured them the market was no longer declining and in fact was on a vigorous upward path. Being on the Federal Reserve Board was interesting and very timely because it substantially boosted the integrity of our start up bank in the midst of a banking crisis. Bob Smith was President of the Houston Branch, and he wrote a wonderful letter that was important at the time for the bank’s credibility. 7 “President’s Message,” Federal Reserve Bank of Dallas Reprint from 1992 Annual Report. https://www.dallasfed.org/fed/~/media/documents/fed/ annual/1999/ar92.pdf
A CRITICAL TIME—WORKING WITH THE FEDERAL RESERVE 205 Federal Reserve Bank of Dallas recognition
206 AN AMAZING LIFE Amegy Tower is striking at night. A view from 610 Freeway.
THE ULTIMATE TRIUMPH— BUILDING AMEGY TOWER 207 The Ultimate Triumph— Building Amegy Tower If you build it, they will come. —Ray Kinsella (Kevin Costner) Field of Dreams (1989) I n 2012, Amegy was rapidly outgrowing its available space and we had to consider constructing our own facility. This is the story of how Amegy Tower became our new corporate home. Five Post Oak Park Facility I n what seems like many years ago now, Amegy swapped places with Ned Holmes’ bank, Heritage Bank. He was in the lobby of the Five Post Oak Park building in the Post Oak Park business park and we were across the street using 5,000 square feet in the 57,000- square feet three-story ICA Center owned by the Insurance Corporation of North America. His bank was not growing and we were growing like a weed. We needed to be in Ned’s building with 500,000 square feet where we could grow, and grow, and grow. After Amegy moved to Five Post Oak Park in 1996, we initially occupied about 20,000-square-feet. In my Post Oak office with Yvonne
208 AN AMAZING LIFE Time to Move I n approximately 2012, we were notified that our building had sold to Shorenstein, a real estate investment management company from New York, and the rent was going to double. We had negotiated at a very cheap rate when the market was depressed several years earlier so we had a pretty decent rate. By this time, we had grown to 175,000-square-feet, and Shorenstein was not sure that the building could accommodate us in the future. We commissioned Scott Wegmann and Tim Relyea of Cushman & Wakefield, a commercial real estate company headquartered in Chicago, Illinois, to determine the feasibility of finding space nearby that we could lease or, in the worst case scenario, build our own building, which wasn’t our first choice. They soon determined that our best plan of action was to build our own building. Acquiring the Micro Center Property Then we had to discuss the feasibility and logistics of constructing our own building. A three-minute walk from 5 Post Oak, on 610 Frontage, was a five-acre tract owned by a computer store called Micro Center. It would be absolutely a perfect location—near the bustling Galleria Area and Uptown District, with high visibility for Amegy Bank. It was on the same side of the freeway as River Oaks with a much better traffic pattern than crossing the freeway to the west side of Loop 610. There was only one problem. This Micro Center property was not for sale. Early discussions with the owner determined it would never be for sale. But they had never met anyone like Scott McLean, our CEO, one of the most tenacious individuals I know. I still remember when Scott was visiting Yvonne and me in Durango, Colorado, where I had in recent years built a summer home. It was a Sunday night and the Micro Center owner called Scott to say we had a deal. No doubt the owner just got tired and gave up. I am sure Scott just wore him down. We were so thrilled! Now we had an incredible location—five full acres—just two minutes from our existing location, and on the most visible spot on Texas’ busiest freeway. We were amazingly lucky… again thanks to “Mr. Tenacious!—Scott McLean. Vision for the Future The plan was to build a Bank Tower for our offices but to also build it big enough that we could have some tenants on a ten-year lease. That would assure us of future growth space. The extra acreage on this property
THE ULTIMATE TRIUMPH— BUILDING AMEGY TOWER 209 would also give us additional land for a future tower if needed. Our vision was to build one of Houston’s most beautiful buildings in one of the most prominent locations with the highest traffic pattern of any location in the entire city or maybe Texas. The challenge would be to design a building we could afford… and we did. Hiring a Fee Developer To build the building, we felt it best to have a key fee developer with the expertise to guide us in all decisions as well as oversee the project. We had five very capable customers that we felt could do the job, so we set up a series of interviews and asked them to make presentations. The last group to be interviewed were the leaders of Gerald D. Hines Interests. The Hines presentation to our group was almost comical. It began with their bold statement that they would be the most expensive team we would select. I remember Scott asking them why we should pick them and they had a great answer. They said that they had built 1,500 buildings and had already made every mistake there was to make so they would not make a mistake on ours. And in the end, they would be the most cost-effective choice. And sure enough, they were right. Gerald D. Hines Interests is a privately owned global real estate investment, development and management firm founded in 1957 by Gerald D. Hines. They manage, or have managed, over $100 billion in assets in approximately 200 cities in 24 countries. They also have a very deep bench of professionals on their team that are expert in absolutely every facet of construction development (whether it was lighting, parking, engineering, windows, or any other detail of the building). They were just phenomenal to work with—extremely organized, efficient and professional. Selecting an Architect We then invited a number of renowned architects, suggested by Hines, to make proposals for the building design. Only one did we find to be incredible, in my opinion, and that was Jon Pickard of Pickard Chilton, a highly regarded international architecture studio based in New Haven, Connecticut. He would be the building design architect while Gensler Architecture and Design of Houston was the interiors architect. The building we ultimately designed would be a 400,000-square-feet, 24-story structure with Amegy using 11 of the 24 floors. We would lease out the other five floors, while eight floors would be dedicated to parking. It
210 AN AMAZING LIFE would cost $223 million, which was exactly what the cost of rent at our old Shorenstein location would be for the next 13 years. Of course, we had two big risks that we were assuming with this project: 1) Construction always carries a risk of being able to deliver the building on time and on budget. 2) We were taking a risk as to whether we could lease five floors (125,000 square feet) for a minimum of 10 years, and for a target price that was at the very top of the market. Luckily, we accomplished both goals. If we were finishing our building today in the midst of the coronavirus, when the city is experiencing 20% vacancy rates, the results would not be so rosy. Executing Amegy’s Vision Scott and Steve Stephens asked me to lead the project, since I had the most time available and probably the most expertise. I had been through some of the process of a commercial building project once, many years ago when we built a similar building for Allied Bank. My early team, dealing with the most critical aspects of getting started, consisted of Scott, my chairman; Steve, our CEO; Randy Meyer, our CFO; and Kelly Forman, the manager of all Amegy facilities. For the subcontractors, we contracted with local companies and clients whenever we could. We gave Hines an extensive list of customers that we felt should be involved as subcontractors on the many phases of a $200 million job but left it to Hines to qualify them. As a result, over 70% of the building was built by customers! Fortunately, Dave Harvey, of Houstonbased D.E. Harvey Builders, Inc. won the construction contract. Harvey is one of the very, very best. As a matter of fact, thanks to Our team watching crane tower being erected.
THE ULTIMATE TRIUMPH— BUILDING AMEGY TOWER 211 The new landmark is almost finished. Concrete being poured for the foundation. Steve Stephens, Kelly Foreman, Walter, Scott McLean and Randy Meyer
212 AN AMAZING LIFE Hines’ high standards, we had the best of the best on every single aspect of the building, including Kendall Heaton Associates, architecture; I.A. Naman, mechanical and electrical; Walter P. Moore, structural; and Clark Condon, landscaping. Construction began in November 2014 and concluded in the fall of 2016, on time and on budget. A “Cadillac” System I consider one of my specialties to be HVAC, as I have spent many hours on the subject. In my opinion, HVAC is the HEART and LUNGS of a building and I wanted a “Cadillac” of a system. I had come to consider Trane to have the best systems on the market. Hines’ HVAC in-house expert was Thomas Bay and he had incredible knowledge concerning all elements of HVAC. We spent a lot of time together. Prospects had to set up complete units in temporary rooms to test many elements of concern. Ultimately, instead of Trane, I selected Steve Nailor’s company, Thermal Corporation, to design, build and install Amegy Tower’s HVAC system. Comparing it to some of the most popular units was like comparing a Maserati to a 1957 Volkswagen. I had banked the Nailor brothers since 1982. Then they were a very small company with a total of 50,000 square feet of facilities and about $6 million in sales. Now their facility has grown to 1.2 million square feet and their sales have grown to $150 million. My original Walter, Steve Stephens and Scott McLean with wives celebrating the Amegy Tower’s grand opening in the Founder’s Room.
THE ULTIMATE TRIUMPH— BUILDING AMEGY TOWER 213 1982 $60,000 loan helped create an awesome company! I have no doubt that they installed the finest system in the world and as a result of my selecting Nailor as the subcontractor, they are now on Hines’ approved vendor list. Amegy’s HVAC system provides, basically, a separate system for every floor, with under floor air that comes across your feet and then straight to the ceiling before it circulates again—12 times an hour! Then on top of that we have UV lights in every unit to kill bacteria, germs, and pollen. This system filters out VOCs (volatile organic chemicals), like the formaldehyde that is in all carpets, as well as about 30 other such chemicals. This $2 million extra expense, based on my study, will have a three- to seven-year payback (depending on which study we believe). At the least, we will have happier employees because the air feels different and there will be less allergies and colds. This is just one example of the quality that was put into the construction of Amegy Tower. There are so many other examples of quality, too numerous to mention. We also designed the building to have very strong security throughout, including iron gates to secure parking and card restrictions on elevators and doors. In the world we live in today, this has become an important feature to have. It gives our Amegy employees as well as our tenants peace of mind and security. We also have a camera system for security that is really over the top. Stairways We wanted generously s i z e d s t a i r w ay s between the floors, and also wanted them to be bright and inviting. We created graphics throughout the staircases to be pleasing, not only enhancing the senses but inspiring the mind as well. Magnificent staircase connecting 10th Floor conference rooms with Yvonne’s Café on 9th Floor
214 AN AMAZING LIFE Amegy Tower Opens I n 2017, after two years of construction, Amegy Bank opened its $220 million 24-story glass-clad tower at 1717 West Loop South in Houston. It is pretty amazing how smooth everything went and from the foundation to the art we get incredible comments from everyone that sees the tower. The bank’s corporate offices and Galleria banking center occupy the majority of the new building, with 800 of the bank’s 1,200 employees housed there. We actually have over 2,000 members of the Amegy family but today 1,000 wear the Zions hat and many of those office in our 1801 Main Tower we purchased downtown in the late 1990s when the building was going through bankruptcy. Public interior and exterior spaces provide magnificent views of the city. The tower’s gently curved glass facades maximize views of downtown Houston and the Galleria. A coordinated exterior light show occasionally attracts the attention of motorists on the West Loop at night. W it h i n t he t owe r a re eight levels of parking with an eight-story podium extension providing 1,160 parking spaces. A mechanical penthouse and The Galleria reflecting off Amegy Tower There is hardly a spot in the building without a wonderful view that allows mountains of light to brighten the space.
THE ULTIMATE TRIUMPH— BUILDING AMEGY TOWER 215 building maintenance unit at the top of the tower are concealed by cladding supported by a sloped steel ‘crown’ which peaks at 70” above the roof level. A podium on the 9th floor garage roof accommodates a 10,000-square-foot conference pavilion set amidst a landscaped garden. Motivating Sayings in the Garage We also added motivating sayings on plaques at all garage elevators, enlightening an otherwise obscure environment. T he ent i re desig n wa s d e ve l o p e d t o pr ov id e a n amazing amount of natural light throughout the building. Almost all the interior walls are clear glass and from any elevator bank, the view is to the outside, either to the north or south. The tower is accessed through a double height daylight filled lobby, elegantly detailed with natural surfaces of wood and stone. The high-performance enclosure with 10-foot floor-to-ceiling insulated Every elevator garage lobby has a motivating phrase as do our many expansive stairwells. Walter touring the Forte dei Marmi quarry in Italy where the building marble was being mined.
216 AN AMAZING LIFE glass introduces natural light deep within the offices. The building also has a three-story tall cable net wall at the main lobby to create a striking entrance. Our lobby floor is very special. Randy, Kelly, and I found the stone, a limestone called “Midnight Fossil” from Spain. It is so interesting because we walk on fossils that are millions of years old. The walls are a bluet marble from a quarry in Italy which we actually visited and observed the mining. It was interesting to learn that stone from all over the world, even from the US, is shipped to Italy to be processed. The marble has what is called a leather finish which is produced by an extremely high-pressure wash. It feels good just to touch it. Selecting stone in Italy for all floors and countertops in the building. The lobby view is striking with the “Midnight Fossil” floor from Spain and the curved wall marble from Italy.
THE ULTIMATE TRIUMPH— BUILDING AMEGY TOWER 217 10th Floor Reception At the top exterior of the building is a massive Amegy sign. The “A” alone is 26 feet tall and can be seen for miles.
218 AN AMAZING LIFE Yvonne’s Café One of the highlights of the building is the beautiful café we built for the employees and tenants. The Amegy staff named it Yvonne’s Café after my wife, since she is really the Mother of the bank and has been an integral part of the bank since day one. She is still working as my assistant of 30 years at the age of 82. Our tenants and staff are as enthusiastic about Yvonne’s Café as much as any amenity we have provided. It seats nearly 150 people and was designed by Chris Pappas whose family also runs Luby’s. We wanted the café to be bright and airy with lots of color—and we accomplished our goal! Our food is really good, very reasonably priced, and we have a wide daily offering. The café also caters all events for our conference center and our many conference rooms.
THE ULTIMATE TRIUMPH— BUILDING AMEGY TOWER 219 The Founder’s Room The Walter Johnson Founder’s Room is a library containing bank history, scrapbooks, Amegy trophies, along with the collection of Carey Gray’s wood carvings—as well as Walter’s own wood carvings. This table in the Founder’s Room is an incredible slab of art made of volcanic red onyx from Pakistan. Walter with some of his trophies in the Founder’s Room.
220 AN AMAZING LIFE The Art in Amegy Tower The Amegy Tower interior space has lots and lots of art. It is not expensive at all but it is fun, interesting, colorful and sets a very pleasant and pleasing tone throughout our workspaces. Stainless steel sculpture designed for our bank’s elevator lobby Wood sculpture commission for bank’s lobby wall Throughout the building all the wood is Louisiana red gum tree. This wood was treated in Germany with a chemical process that highlights the grain pattern magnificently.
THE ULTIMATE TRIUMPH— BUILDING AMEGY TOWER 221 Walter E. Johnson Conference Center I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel. —Maya Angelou Amegy Tower also features a two-story 400-seat Walter E. Johnson Conference Center, used by the bank as well as the community for various conferences, events and social gatherings. I did not name the conference room. The officers selected the name Walter E. Johnson Conference Center. The room can be subdivided into four smaller rooms with drop-down soundproof walls. The Center is surrounded outside by a patio and landscaped garden of flowers, even though it is on the ninth floor. There are 14 significant conference rooms on one floor, each themed with wall art that is really unique and creative. On the walls are beautiful actual photographs of local landmarks such as the Houston Livestock and Rodeo, the Port of Houston, and the Astrodome. There are also photographs of charities, like the Boy Scouts; local landscapes of oil wells or ranches with wildlife; and our impressive university campuses. And the list goes on. As a result, we get a lot of “lookers.” The conference room floor was designed to be especially appealing and the designated place for all customer interaction, rather than permitting customers to visit any office floors. These conference rooms are very high tech with state-of-the-art video conferencing capability and for visual presentations. A Marketing Tool We built the Walter E. Johnson Conference Center with the idea that we would make it available to charities all over our city. That has worked very well. We continually have groups using our conference rooms and the attendees at those meetings are quite often local businesspeople
222 AN AMAZING LIFE from all walks of life who just happen to be serving on a charitable board. When I first took the idea of a conference center to CEO Steve Stephens, I suggested that certain criteria should be met by community organizations before approving their use of the facility: 1. If a charity wants to use our room, they have to fax us a list of their Board of Directors. 2. There should be a brief description of what the charity does. 3. The charity should permit us to call on some of their directors to tell them more about Amegy Bank to find out how we can serve them as well as their charity. If a businessman has been in our building to see how beautiful it is and realizes that we are supporting their charity, this is a great door opener for us when we are making a cold call. This is better than a cold call. I would call it a warm call. They are not going to tell us, “No, we don’t want you to come see us.” I wonder how many prospects we could generate in a year from people who have already been in our building and know a little bit about us. Steve thought these suggestions were a great idea and planned on putting it into action. The first year Amegy Tower was open, we recorded 750 events held at the conference center and Yvonne’s Café catered them as well as many events including social gatherings in the evenings. A section of our 400-seat conference center.
THE ULTIMATE TRIUMPH— BUILDING AMEGY TOWER 223 The Tenants of Amegy Tower Earlier I mentioned the risk of finding tenants willing to pay our price of space but this too went according to plan. The other 25,000- square foot floors are leased to five great tenants on long-term leases. Two of these tenants are strategic to the business of Amegy Bank—Charter Title Company and Martha Turner-Sotheby’s International Realty, one of the leading realtors in the city. In my opinion, one of the best title companies in Houston is Charter Title. They occupy an entire floor. Martha TurnerSotheby’s leases a floor and a half. Higman Marine Services, Inc., and Platform Partners, LLC also lease space. Centaurus, the family office of John and Laura Arnold Foundation, occupies a floor and a half as well. One of my favorite leasing stories involves John Arnold. One morning, early in the day, Yvonne put the Houston Business Journal on my desk, and on the front page was a picture of John Arnold. I had to read the story because he was a famous guy, “incredibly successful,” and I had never met him. The headlines said that he was worth over $3 billion. I tried to find someone in our organization who knew John, and no one did. I cannot remember how I got John’s cell phone, but I called him. The conversation went like this: “John, this is Walter Johnson, Senior Chairman and Founder of Amegy Bank, and I was just reading the new issue of Houston Business Journal this morning and wanted to compliment you on the success you have enjoyed at such a young age. But John, I have some good news, and some bad news. Actually, the bad news is worse than bad. Have you got a minute for me?” John then asked, “Sure, what’s the news?” I then explained, “John, first of all the good news is, you are very, very, rich for a young man and have enjoyed amazing success and I want to congratulate you. But the bad news is, everybody in the world today has your picture and can see your success, your net worth. And it is easy to find out where you live. I know that Laura works with you in your office and your kids are there often. And, I know that your offices are not secure, and the building has no security whatsoever for your parking or your staff. John, I am building Amegy Tower at the corner of San Felipe and 610. I am sure you have seen the cranes and the construction going on. I would like to visit with you, show you what we are building and explain why you should move your offices to the Amegy Tower. Would you please come in and let me show you what we are doing?”
224 AN AMAZING LIFE John acknowledged I had a point and agreed, saying, “OK, I could do that.” In a few days, John came to my office where I had displays, floor plans, and all the information a potential tenant would need. After maybe an hour of discussion, we got down to pricing. John thanked me for my interest in him and said he would think about it and get back to me in a few days. That night, John sent me an email thanking me again and said he had considered my proposal already and he simply could not afford to pay that much money for rent. I sent John an email reply which said, “John, in my fifty-five years of banking I’ve never met anyone who had their priorities as screwed up as you do. You and I both know you can afford it. Now what is the reason to do it? It is to protect you and your family. After you saw all the security we have for your parking, your elevators, for your floor, and everything else, you must admit this is important to you, and price is not the determining factor in the decision where you establish your offices.” We also talked about Yvonne’s Café and how convenient it would be for all his employees to have a wonderful place to eat right there in the building. John said he would think about it some more. I think it was the next day when he called back and wanted a tour of the building that was under construction. We took that tour and just a few days later, John called to say he wanted to take a whole floor. He has since expanded and taken another half of a floor. We love having John and his family as tenants. It puts a smile on my face very often when I meet the tenants in the café, in the lobby or elsewhere in the building. They cannot stop dishing out compliments on the building, the café, parking, the location, etc. They also are pleased that their clients and employees are extremely happy there. The Icing on the Cake J ohn and his wife, Laura, are both amazing people, wealthy yet humble, gracious and charitable. I soon learned just how generous they were. Soon after John and Laura moved into their new space, I asked John to join me for lunch with Steve Stephens. As CEO, Steve really needed to know John, so we lunched at River Oaks. As usual, at lunch I told John about Star of Hope Women and Children’s Shelter, which I feel like I am almost the founder of since 1986 (during Houston’s biggest crisis). At the time of our lunch, Star of Hope had just consolidated all their facilities into a new facility costing $55 million and they were short of funds
THE ULTIMATE TRIUMPH— BUILDING AMEGY TOWER 225 by $15 million. They asked me if I would raise money to close the gap and I agreed, stating that I could probably do it in 90 days. However, just as I was nearing 50%, the energy market crashed again and I had to abandon my prospect list with still $7 million to go. I told this story to John as we ate lunch. John called me the following day and said that Laura would be interested in touring the Star of Hope facilities, which we did very soon after the call. Laura was amazingly inquisitive and though I have conducted hundreds of tours over the past 35 years, I have never seen anyone who can dig deeper than Laura. A few days after our tour, John dropped a $3.5 million check on my desk—50% of what I still needed to accomplish my goal. As long as I live, I will never forget the joy of seeing that check. I did finish my $15 million challenge soon enough. Equally rewarding is that the Arnold family has really taken to Star of Hope and their eight-year-old (apparently as brilliant as she is lovely) has been writing and publishing books of poetry and donating all the proceeds to Star of Hope family shelter. I have never been very successful in building a team to raise money and almost all of my efforts have basically been one-on-one. I have also found it very rewarding to receive so many compliments from those who I solicit for funds. Regardless of what the prospect gives me, and sometimes of course, it is nothing, they still express admiration for my willingness to raise money for charity. Mission Accomplished We have the most beautiful 24-story building in the city, in the best location with five great tenants, but the real reward is the financial success of the development. The building was finished on time and on budget. We would have paid $225 million in rent at our previous location over 13 years, but our new tower’s total cost was $223 million. Walter in the Café
226 AN AMAZING LIFE The Founder’s Room at Amegy Tower
THE ULTIMATE TRIUMPH— BUILDING AMEGY TOWER 227
Part VII People, Colleagues, Customers and Friends
BOB McNAIR 231 Bob McNair Some people arrive and make such a beautiful impact on your life, you can barely remember what life was like without them. —Anna Taylor The life of Bob McNair is an incredible story, one of entrepreneurship and success, of bankruptcy and starting over. This is a story of a man who died at the age of 81 with a net worth of $3.8 billion, the story of one of my best friends, a man with whom I boated and hunted. Bob was my friend for over 40 years. I first met him around 1963 when I was a trainee at the old Bank of the Southwest. At the time, Bob was a customer. He had his own company, leasing cars, when he was only 25. He had a line of credit that was guaranteed by a Houston friend and investor. Even then, he was my idol. We were just acquaintances back then, however. I did not really get to know him until he moved his banking to my bank, Allied Bank of Texas. He was good friends with one of our key bankers, Charlie Meeks. Of course, in hindsight, it seems we were meant to cross paths. In the late 70s, Bob came to tell me about his new company, McNair Truck Leasing, to see if I wanted to invest. At the time, income tax rates were 70%, but there were a lot of tax deductions available for investors. The plan was, if I gave Bob $50,000 for equity, he would buy a big rig truck, and I would get intangible tax credit that year and would have the benefit of the depreciation on a $300,000 rig he would purchase. Bob planned to operate the rigs for five years, then sell them, and the investor would get all of his investment back. All the while, the investor would be doing very well with all the tax advantages, a sweetheart deal on paper. So, I told Bob I would do one rig now and another in 90 days, which would be the following year. However, only at the end of the five years, business was horrible. Consequently, Bob could not sell because there was no demand for big rigs.
232 AN AMAZING LIFE He was the victim of the deregulation of the trucking industry and had endured a viscous labor strike on top of that. Long story short, nine years from founding McNair Truck Leasing, the company filed for bankruptcy. I chalked up the loss, but all the tax benefits actually made me whole. However, maybe three years after this, Bob came back to see me and said he wanted financing to start a new company called Cogen Technology. It would build an electric generation power plant in Bayonne, New Jersey, and sell the heat generated as a byproduct to several companies while providing electrical power to New Jersey. Unfortunately, it looked impossible. I explained to Bob that as a result of his recent bankruptcy and the fact that he no financial resources at all, it would be impossible for him to borrow money. I told him if he were really committed to this project, he could raise some equity by selling his large acreage in Tomball, near Houston, which was probably worth more than $1 million. Bob shook his head. I could tell by his look he did not like the idea. He did not want to sell the property because Janice, his wife, loved their 100-year-old house and her horses. Nevertheless, he agreed it was the only option. Maybe another three years passed, around seven years after McNair Leasing had gone bankrupt, and Bob came in again to ask for several millions in working capital because the company, while still very young, needed to finance receivables and expenses. Our loan committee consented but agreed that this was the hardest loan we had ever made. Around this time, I remember receiving a letter in the mail with a note payable to me for $100,000. In the envelope was a letter that said this was to pay me back from the failed investment of the trucking company. The note, he wrote, would be good and payable if Cogen became a successful company. I shook my head and called Bob immediately to explain that he could not just give me money, that we could both go to jail. Furthermore, I insisted my $100,000 was an investment in the trucking company, not a loan. Simply put, there was no debt to repay. Bob, however, was not so easily deterred. He explained that he had given every investor and every creditor the same letter, the same note paying them in full. He wanted to do this so he could rest assured that no one took a loss on him. In other words, while he had absolutely no existing liability, he felt morally obligated to do this. This, he insisted, would clear his conscience, so I needed to figure out how to accept it. I was not sure what to do. To my knowledge, no one had ever done this. In any case, I thought it over, then brought it up to the board of directors
BOB McNAIR 233 and they approved it. They all knew Bob. We also informed the regulators, and all of them not only approved it, but they were amazed at the integrity of Bob McNair. I still am. Fast-forward some years, after Cogen Technology had become enormously successful, Bob sold part of the company to Enron for a billion dollars cash. As most of the readers of this book know, Bob paid $700 million to bring football back to Houston. Bob and his companies have been among Amegy Bank’s largest and most prestigious customers over the years. Bob was also an early director of Amegy Bank for a short period prior to being appointed to the Federal Reserve board which, by law, required him to leave our board. At one time, in any case, I remember Bob owning over $65 million in Amegy Stock. He really believed in our future. However, he was not just a wise businessman. Bob’s charitable foundation has been an incredible resource for me because I am one of Houston’s major fund raisers for charity, and Bob was always the first call I made. It is no exaggeration to say that he never turned me down. For this reason and countless others, I have such a special place in my heart for Bob. I have so many memories that I will never forget. He was like a brother. Shortly before Bob died, he and I played in the Star of Hope annual golf tournament, and then the two of us attended the dinner and auction. In the auction, a nice painting was up for bid, and Bob asked if I would put it in the new bank tower that Amegy had under construction if he bought it. “Of course,” I said. Next thing I knew, Bob was raising his hand. In the end, Bob paid $20,000 for the painting, which now hangs just outside Amegy’s Board Room. Almost daily, I look at it, always with the fondest of memories.
BERDON LAWRENCE 235 Berdon Lawrence Good friends are like stars. You don’t always see them, but you know they’re always there. —Unknown Berdon Lawrence has been a strategic partner all my life. He is six years younger and someone I consider to be a best friend as well as a customer, a confidant, and an advisor concerning the marine business. He has been doing that for 50 years. He has also been a great referral source for new business. Berdon, Bob McNair and I had numerous opportunities to hunt, fish, and boat together. As a matter of fact, in 1995 Bob invited the two of us and our wives to join him and Janice on the maiden voyage of his 85-foot boat in the Bahamas. We enjoyed three days of paradise. The sad thing is that one year later I reminded Bob it was time for a reunion to start his second year on his new boat. Sadly, Bob replied, “I have not seen that boat since the maiden voyage, because I’m too busy.” Berdon was introduced to me in 1970 when he was just 29 years old— but already an entrepreneur. He was in the barge business, operating three totally broken-down barges that his dad had decided to scrap because they were worthless and barely seaworthy. His dad had used them for years to barge oil out of the Louisiana swamps, where he had a few oil wells. Unfortunately, the wells played out about the same time the barges did. So Berdon asked his dad if he could have the barges to see if he could make money hauling oil for others… and, amazingly, he was successful. The barges, however, were not really safe because they could have become an environmental hazard any day. When a friend of his introduced Berdon to me, Berdon had no credit capacity to speak of. Nonetheless, CIT agreed to finance three new barges for him if he could find a partial guarantor, which is where I came into the picture. As guarantor, I received part of the profits on one of the barges for
236 AN AMAZING LIFE nearly 50 years. This worked out to be a very nice sum of money. Over the years, Berdon became a major customer, as he built one of the largest fleets of push boats and barges in the USA. In 1999, he sold the business for $325 million to Kirby Corporation, a public company, to become the biggest marine company in the USA. Berdon became Chairman of the Board. I was appointed to the Board of Directors. All these years, Berdon and I have been invaluable to each other, as both of my banks—Allied Bank and Amegy—loaned him many millions to grow his company in this 50-year period. At the same time, he was a confidant regarding our interests making loans to anyone in the marine business. During this time, there were a couple of very bad down cycles in which we wound up repossessing barges or even companies, and in every case Berdon worked our problem out. We never had a loss. For 30 years, I would not let any officer finance marine barges or boats without calling Berdon to determine the proper values, the maintenance, or the reputation of the owners. The couple of times we had loan problems with barges, Berdon was also our go-to guy to get our money back. Great customer, right? I remember a very large loan that tanked, and we were under water. We made a deal with Berdon to operate the fleet we had financed until we got our money back to a point he would buy the loan. Another time, John Klein, my loan officer, called Berdon and explained he was going to loan a company $5 million. He just wanted Berdon’s opinion, he said. Berdon told him that they were good guys. However, if things went bad, John would lose $2 million. John stomped to my office, angry, because he knew I would not approve a loan unless Berdon had blessed it. Ultimately, John went back to Berdon and said he wanted to only loan $4 million now because a partner was going to put up a $1 million deposit as additional collateral. Berdon then told him, “Well, John, I suppose that’s a much better loan. I mean, now you’re only set to lose $1 million.” To his credit, Berdon was correct. Ultimately, another bank made the loan, and sure enough, at the first downturn, the company failed, and Berdon picked up their equipment at a huge discount. Everything’s Bigger in Texas Of course, Berdon is not just a businessman. For one, he is the ultimate quail and dove hunter I know. The two of us have spent an amazing number of weekends hunting and fishing together. Berdon was always one of my major referral sources because he and I and his friends all shared the
BERDON LAWRENCE 237 same common interest. You get to know a lot about an individual if you spend time with them outdoors. In addition to being an outdoorsman, Berdon is the ultimate entertainer. Everyone loves him—at least, I cannot think of anyone who does not—and I speculate that he has more friends than any 100 friends I know combined. Berdon has entertained all the top brass at every major company on the Gulf Coast, any company that would have a reason to move product on the intercostal waters from Mexico to any place on the Mississippi. Unfortunately, we do not see Berdon and Rolanette as much on the Bay as in the past, even though we share adjoining properties. Now they spend most of their time around their ranch and camp. He calls the place Hollywood Camp after his company named Hollywood Marine (before it merged with Kirby Marine). Hollywood Camp had about 60,000 acres under lease in Falfurrias and Hebbronville, which happens to be the best bird country in Texas. The place is a dream. The camp would sleep over 25 people in private rooms. Connected to the camp is his personal 12,000- acre ranch and a stunning house that Rolanette, Berdon’s wife, designed and decorated. I doubt anyone in Texas manages their quail ranches like Berdon. We always had a guide on each truck. There would be two or three outriders on horses scooting around finding quail, and they had radios in order to notify the truck. We never shot more than three birds per covey, and the ranch was mapped out so that each truck had a section to roam, and that section would not be hunted more than four times a year. Fortunately, Rolanette loves to hunt deer and shoot birds as much as Berdon. Bedsides the ranch, Berdon had 20,000 acres in Louisiana just outside of Vinton, Louisiana, which was an amazing duck and goose place. Both of my boys joined me there hunting numerous times. We have all spent some good times there. As good as Vinton was, it played second fiddle to our trips to shoot the huge Greater Canadian Geese that fed in the Snow Pea fields next to the Peace River, which is about 300 miles north east of Vancouver, Canada. Often when ducks or geese fly over my bay home in the fall I am reminded of the good times we have spent. My Favorite Berdon Story Being around Berdon was so entertaining and I have at least 100 great stories about him growing up in Louisiana and being an avid hunter
238 AN AMAZING LIFE with his Dad on the 20,000-acre marsh the family leased for most of Berdon’s life. Berdon was vastly more affluent, compared to my life, and hunted incessantly from the time he could hold a shotgun. My very favorite Berdon story, that has been told so many times—and many times by me—can best be appreciated by duck hunters. But I think my non-duck hunter readers will enjoy it as well. So, Berdon’s Dad was taking a small group of his best customers shooting in the family’s marsh one weekend where they would all stay on the houseboat that I have been on so many times. Berdon and his lifelong best friend, Jimmy Beresford, were both teenagers and Dad agreed that they could also come hunt that weekend—but they had to sleep with the guides in their shack and Berdon had to stay away from the guests. He and Jimmy had to hunt in a distant pond that was difficult to get to and even required dragging the Pirogue part of the way over the marsh. It all sounded fine to the two boys. On the way down, Berdon and Jimmy passed a roadside vegetable stand that had a sign giving away free sweet potatoes. So out of curiosity, they stopped and asked why they would give away free sweet potatoes. The answer was that the sweet potatoes were getting rotten and the stand owners thought it might create some goodwill with customers if they gave the rotten potatoes away to put around duck blinds to attract ducks. The owner said every hunter knows how to do that—even though it is not exactly legal. Berdon and Jimmy thought it was a magnificent idea and filled up the trunk of the car with the sweet potatoes. They could not wait to put out their duck food so that very night, they made the trip to their blind and loaded the pond with sweet potatoes. At their age, the sight of alligators everywhere was nothing they worried about. The next morning, Mr. Lawrence and his guests were really excited about going out because they had never seen as many ducks as they had witnessed when they arrived the evening before. All the guests settled into their separate blinds and they soon saw hundreds of ducks circling. The hunters had their guns ready for the ducks that were about to dive right in front of their blind. But it did not happen. No ducks came. Instead the ducks all made a bee-line for another pond just about 500 yards away. Over and over, the ducks landed just out of reach—at the very same place. Finally, the hunters all tramped back to the lodge emptyhanded, about the same time Berdon and Jimmy arrived carrying about 10 times their limits of ducks.
BERDON LAWRENCE 239 The hunters were stunned and bit upset that Mr. Lawrence had put them in such poor blinds yet let his son literally shoot everyone’s limit of ducks. So, the next morning, Mr. Lawrence sent his hunters out again with guides and told Berdon that he was going to hunt with them. They begged him not to do so, coming up with all sorts of reasons why he should not go with them. It was a long way they claimed. It was almost impossible to pull their boat over the salt grass. The alligators were aggressive and were everywhere. The boys and Dad made it to the pond, paddled out to the blind, and at the crack of dawn, they all got their limits in 10 minutes. Berdon told Dad, “OK, we have got to go now and get you back to your guests.” But Dad insisted they wait because he did not know that he had a pond cluttered with so much ‘stuff’ floating on top and the smell was not pleasant. The story ends with a stern reprimand from Dad and a complete weekend of two boys retrieving and bagging sweet potatoes and then digging a hole so they could bury them.
CAREY GRAY—AN INCREDIBLE ARTIST 241 Carey Gray— An Incredible Artist A man who works with his hands is a laborer. a man who works with his hands and his brain is a craftsman. But a man who works with his hands and his brain and his heart is an artist. —Louis Nizer, Attorney Phillips, Nizer, Benjamin, Krim & Ballon Wood carvings of wildlife—many being replicas of birds and fish I have caught—make Carey Gray’s work very special. They bring back fond memories of wonderful trips with customers, prospects and friends. Carey was not your everyday wood carver—he was a world class craftsman and won the World Championship with a replica of my most beautiful Great Blue Heron which is displayed in the Founders Room, near my office. He began as a taxidermist and moved from that to wood carvings. I have been told that my collection would be worth in excess of $200,000… but my cost is far less. I discovered Carey around 1980 when several of my friends and customers put on an exhibition at our country club and invited everyone to bring their works for exhibit. I could not believe it. I was stunned at the amazing zoo in our country club, with the most beautiful birds, fish, flowers Carey Gray’s Great Blue Heron which earned him a world championship trophy for wood carvings.
242 AN AMAZING LIFE and other such art. They appeared so real yet were supposedly wood. From the exhibit, I learned that Carey lived very close to my Bay home so I made a surprise visit to him one day and found him in his garage working on another Great Blue Heron. I was in complete shock. Carey himself was amazing because he would pass for a Houston Texan lineman, or maybe even a ditch digger. He had big, tough hands even though he was no taller than me. The biggest shock of all however was his workstation in his garage. The bird he was painting was on a very small table, and above it was a pull-down light bulb. Carey had about three feet of working space under the very poor lighting. He could have had more room, but the boat stored there was filled with water hoses, broken bicycles, a few lawn chairs and who knows what else that seemingly had first priority. I really liked Carey immediately and we became longtime friends because we each had a very strong passion for the same things—the outdoors, nature, birds, hunting, and fishing. Naturally, we became fishing partners in Galveston Bay. One fishing trip I will never forget was on a cold day in January. At the time, I was often going about 150 miles from my Bay home to fish in the ocean. I only had a 28-foot boat at the time, but for a small boat it was amazingly sea-worthy—and I often put it to the rough sea’s test. It was equipped with twin Volvo inboard Diesel engines, deep sides, a V bunk bed in the cabin and a tiny kitchen. Friends, employees and families joined me for some amazing experiences on that little boat. Fishing 100 miles off the coast of Galveston is some of the finest fishing there is for tuna, sails, Carey Gray’s replicate of a tarpon that Walter caught off the Galveston coast. Carey Gray’s replicate of a trout Walter caught in Galveston Bay.
CAREY GRAY—AN INCREDIBLE ARTIST 243 grouper, snapper and many others, so this is where Carey and I were headed for a three-day weekend. As we were navigating the Houston ship channel toward Galveston, I stepped out of the cabin and said, “Carey, why are you so stupid? Sitting there on the back deck freezing to death, getting wet, to smoke those stinking cigarettes that are only going to kill you. Come inside with me where it is warm.” But the cigarettes won out and he continued to sit out in the weather. Nevertheless, we had a successful weekend, we caught our share of fish, and for most of the trip I had the cabin to myself. Carey Gray’s Bald Eagle •There is no replacement for hard work. There isn’t an Eagle Scout out there who didn’t work hard. —Ryan Zinke Secretary of the Interior Throughout my years with Carey, he brought many of his carving to my office for display and sale if a customer wanted one, which happened often. But, one day Carey brought in a massive bald eagle he had carved. This four-foot high life-size Bald Eagle was to be entered in the World Wood Carving Contest. It weighed well over a hundred pounds and its wings were slightly spread. It looked so real. He did not win and so he wanted to sell it. While this Bald Eagle was really beautiful, it was also ostentatious. Carey asked if we would put it in our lobby and put a for sale sign on it. No one loves eagles like Yvonne does, but this eagle was so big and intimidating, constantly staring at Yvonne all day. Hopefully, somebody would buy it. I know I could not… Carey started out asking $15,000 for it. I agreed to help him find a buyer. Every few weeks, he would call me to see if I had any prospects and upon hearing my negative report, he would lower the price. Finally, one day he called and said, “Walter, I badly need $5,000 and would take that for the eagle if you could find someone who wants it.” This gave me an opportunity to do something that Carey really deserved—to contribute to his legacy by donating it to the Boy Scouts. This would ensure that his unique contributions and abilities would never be forgotten.
244 AN AMAZING LIFE That is when I said, “Carey, come and see me! I have a $5,000 check for you. But I want you to take the bird and deliver it to the new, beautiful Boy Scout building that I recently raised $12 million to build, because nothing would be more appropriate than have this huge Bald Eagle in their lobby. It would be perfect for their huge lobby especially since the highest rank any Scout can accomplish is to become an Eagle Scout. That is where it belongs.” I wanted a plaque with his name on it as carver/artist of this gift to the Boy Scouts. This was a great tribute to my friend Carey. I am glad I did this for him. Then, because we could not keep the kids’ hands off the bird, we commissioned a glass dome that would go over the carving to protect it. That bird will be there for all future generations to come, and I am proud to have been a part of it. • Less than a year later, my friend Carey called to tell me he had some good news and some bad news. The good news was he had given up cigarettes and would never smoke again. The bad news was that he was at MD Anderson with lung cancer and had fewer than 30 days to live. Sure enough, the doctors were right and Carey died soon after. The amazing thing is that following Carey’s death his daughter called me to see if she could come and take pictures of my great collection. It seems that Carey never made a carving for her, or for his wife. There were no examples of his skilled work in his own home—such a tragedy. Carey’s wood carvings may be the only art I own that exceeds the collection of Berdon Lawrence or Bob McNair, who also have a lot. I have Carey Gray’s Bald Eagle carved for Yvonne.
CAREY GRAY—AN INCREDIBLE ARTIST 245 some of everything Carey ever made, including an eagle he made for Yvonne and the magnificent Great Blue Heron and Snowy White Egret, both of which are three feet tall and exact replicas of the birds I see every weekend on my pier at the Bay house. But I also have carvings of pelicans, seagulls, green-backed egrets, quail, dove, fish and delicate hibiscus flowers with a hummingbird attached only by its beak. Few people would appreciate Carey’s carvings as much as I do because I have been carving ducks and geese for years. I still have a half dozen but have given away twice that many to customers and friends. (See these in the Craftsmanship chapter.) Carey’s carvings, as well as my own, are in the Founders Room in Amegy Tower where they will be long after I am gone. Carey’s birds must be kept behind glass because visitors simply cannot keep their hands off of them to see if I am fibbing about the feathers really being made of wood. Carey is a friend I truly miss… Carey Gray’s life size Snowy White Egret. Carey Gray’s seagull picking a minnow from the bay.
246 AN AMAZING LIFE Carey Gray’s Bobwhite Quail, which are found mostly in West Texas. Walter’s carving of a Canadian goose decoy. Mourning Doves
CAREY GRAY—AN INCREDIBLE ARTIST 247 Carey Gray’s Green-back Egret. Carey Gray’s replica of 23 lb Peacock Bass that was caught by Walter in the Amazon River, Brazil.
248 AN AMAZING LIFE