S.E.C. Chronicle

Last year, I was awarded the Weaver Award for a project that Ted Blank, Marilee Anderson and I put together in Mansfield, TX. Two S.E.C. formulas were a huge part of the success of this project.

The overall project was much larger and more complicated than what was submitted for Weaver; it was actually two projects that were assembled to form over one mile of highway frontage that we “sliced and diced” into pad sites. The time to completely acquire and dispose of the portion that was submitted for Weaver spanned twelve years.

First, having Ted and Marilee as a part of this venture was instrumental because I could brainstorm with them and work through opportunities (the Society teaches us that problems are really opportunities). Ted was especially valuable as Marilee moved to Switzerland during the venture and I still have not gotten that time zone difference down, which is evidenced by the fact that I called her one day and it was 11:00 PM over there. But having Ted available, even though he is in CO and the project was in Texas, worked well. So, I would say that the first S.E.C. principal used is that we should team up together. One plus one can equal more than two if each of the participants brings value and skills to the venture. Sometimes I get so wound up in the development tasks of the venture than I forget the overall goal and Ted is good at counseling me and keeping my mind open.

The second S.E.C. principal that was used was one of the fundamental counseling formulas: never ask closed ended questions (a question that can be answered with “yes” or “no”). In our Counseling courses, we are taught to ask “Under what conditions might you…?” instead of “Will you…?” The Texas Department of Transportation was a hard entity to counsel, but the decision makers at TXDOT never knew I was working them. The land we acquired fronted a very busy state highway. It was originally acquired as a speculative land play because of the demographics in Mansfield, an upper income city that was experiencing phenomenal growth. In Texas, unlike many other states, we have “service roads,” which provide limited access to the highway because we will put a secondary roadway along the highway itself. This gives one the best of two worlds: you get safety from the limited ingress and egress to the much faster traffic on the highway, but the visibility for the retailers is great. We purchased the tracts knowing that we could never use the land until we had access and utilities. And TXDOT had publically stated that it would not even consider installing this roadway for many years because of a lack of funding.

However, TXDOT allowed Ross Perot, Jr. to build a state highway in far north Fort Worth to access his Alliance Texas project. Ross and I have some things in common: we are both native Texans, we are both developers, and we are about the same age. But there are about ten billion differences also – mainly in dollars. As far as I know, the first time TXDOT allowed a private developer to build a state highway service road was the Alliance project. I knew that TXDOT would not trust Bill Stonaker to have the financial means to insure the project, which was estimated at several million dollars, to be completed. And we know that governmental employees are not risk takers.

So, I brainstormed with our civil engineer and found out that the main engineer for highway construction at TXDOT had just gone into private practice at Carter Burgess, a huge engineering firm that TXDOT regularly used to design highway projects for the state.

Ah ha – maybe there was an opportunity here!

The City of Mansfield and I formed a plan to lobby TXDOT to allow the service road to be built under a public private partnership. I urged the city to allow me to take a part in the direct discussions with TXDOT officials. When we met with the TXDOT engineer that was responsible for the West Texas area, the first thing we did was congratulate him for his promotion to head of construction in our region. The second thing we did was tell him that we had talked to his predecessor at Carter Burgess and he wished his replacement well. Then we asked, “Under what conditions might you agree to allow this to be a private public project?” He stated that this could not be done. So, we reminded him that Carter Burgess often did work for TXDOT and that the man previously in charge of approving projects was now in private practice. Instead of taking no as the answer, our next question was “Under what conditions could this project be moved forward by a partnership of public entities between the City of Mansfield, Tarrant County and TXDOT?” In that cities and counties often must contribute funds to state projects, he could not answer no.

TXDOT did not care where the money came from. When you think about it, city and county funds are not government funds anyway; government does not create anything – all they do is take money from private citizens. So the fact that we were funding the construction made no difference to the state.

The agreement allowed us to fund the engineering from Carter Burgess. The County contributed the labor and machinery and we reimbursed Tarrant County for materials (asphalt, pipe, etc.) at Tarrant County’s cost with no sales tax (the private entity, our partnership, was never going to own anything). Mansfield performed construction inspection oversight and approvals during construction with TXDOT inspections only at periodic key events.

We finished the construction in record time and at about 25% of the normal cost of a TXDOT roadway. The City of Mansfield installed much of the utilities under another agreement with us. And we wound up with fully developed pad sites to begin our development.

So, in summary, my two formulas in this deal were partnering up with someone that would counsel me and counseling the entities we were working with. I guess it could all be summed up in one formula – Counseling.

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