Sherwood Blount’s First Million
Poor Texas boys used to get rich running cattle or drilling for oil. Now they get rich doing real estate deals out on the urban frontier. And those deals all start with someone deciding he doesn’t want to be poor—ever again.
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In the reception room an immaculately dressed, suntanned young man with a neatly trimmed black moustache was talking on the phone. “No,” he was saying, “you’re confused. I’m not talking about my four-well deal in West Texas, I’m talking about my nine-well deal in West Texas.”
The man with the neat moustache was Melvin W. Jackson, Jr., whose business empire (oil and gas and real estate development) Sherwood had just entered. He hung up and shook hands. “Sherwood, hi,” he said. “Come over here and meet somebody.” He led Sherwood down a hallway to a desk behind which stood a tall, gangly, shy blond-haired kid wearing jeans and sneakers and a T-shirt. “This is David Piehler. He’s starting next fall in the basketball program at SMU and he’s here for the summer on an intern basis, just to get a feel for the business world. David, I think Sherwood can tell you that one benefit of involvement in the SMU athletic program is a real good future in the Dallas business community.” David looked down at his sneakers, mortified at this attention.
“Now let’s go on into my office. Let me just buzz Ron.” He pushed a button on his telephone and in walked Ron Williams, a tall, thin, perpetually grinning man with a scraggly mop of black hair and a moustache and wearing an open-necked shirt and a gold chain around his neck. Williams was new to MWJ Corporation, hired because of his reputation for having excellent contacts with wealthy foreign investors.
“Now let’s talk about trailer parks,” said Jackson. “I think what I want to do is buy one for myself first and see how I like it. Then I’ll think about what to do next. We might get some of our Germans to put up the money.”
“You get the right location and these things can be cash-generating mothers,” said Williams.
Jackson nodded. “No curbs, no sewers, and they can’t move in till they buy the trailers from us. We’ll finance ‘em. Think you can find us one, Sherwood?”
“We’ll sure start looking for you today.”
Sherwood went back to the office and gathered up Tim Black, and together they took off in the Cadillac for Carrollton, northwest of Dallas, an old town now quickly being transformed into a suburb. They pulled up in front of a fading brick hardware store and walked inside. Not much was going on. A couple of sleepy clerks sat behind cash registers and back in a corner the owner, Milburn Gravley, a country businessman in his fifties, sat at a rickety wooden desk. Sherwood and Tim sat down next to Gravley, and Sherwood pulled out a contract for the sale of 122.21 acres of Gravley land for $1,833,150, or $15,000 an acre.
Gravley flipped through the contract, stroking his chin. “Well,” he said, “I think your arithmetic is pretty good. I don’t have much trouble with it.”
“Fine,” said Sherwood. “You have until five o’clock Monday to give us an answer. That’s when the contract expires.”
Gravley gave Sherwood a sharp look. “Wait a minute. I won’t accept a contract for another month. I want to see what some other bidders come up with.”
“Are you saying to met that you want to get all the contracts in at one time?”
“That’s right.”
Sherwood’s face hardened and his jaw muscles bunched up. This was quickly turning into a real estate broker’s nightmare—a bidding war in which a broker couldn’t get a quick yes-or-no answer and had to keep making annoying trips back to his prospective buyer to ask for a higher price. “Well,” he said, “quite frankly, that’s not what I expected.” He clenched and unclenched his firsts, then picked up a paper clip, unbent it, and twirled it between his fingers.
“Look,” said Gravley patiently, “I’m not a developer. I own a hardware store. I just happen to have some land. And I know the suburbs are coming out here and I know it’s a hot piece of property now and I know it’s time to sell it. I just want to get the best price I can, that’s all.”
“I know how you feel. And I’m asking you to name your price.”
Gravley looked a little puzzled at the attitude of these young men in their three-piece suits who wanted to do everything very fast and who seemed to take great offense over the slightest setback. “I never said I’d do that, Sherwood.”
“Damn,” said Sherwood, when he and Tim were back in the car.
“I was afraid of something like that,” said Tim.
“He’s gonna prostitute himself, is what he’s gonna do.”
“That’s right. He’s gonna get five or ten offers”—Tim had contempt in his voice, as if he were talking about sexual promiscuity—“and he’s gonna go through each one of them before he makes up his mind.”
They drove in silence for a time.
“Well,” said Tim, “you did a heck of a job pitching him.”
“Yeah,” said Sherwood, “but the only real value of pitching is winning.”
After a while they came to an empty field that had been freshly bulldozed, the future site of an apartment deal that Sherwood had consummated. In the front of the field was Sherwood’s least favorite sight, a Sherwood Blount and Company sign that had fallen down so that passers-by could no longer see it. In the field, a couple of construction workers sat on top of a bulldozer, watching the world go by.
“Look at those old boys out there,” said Sherwood. “Think they’re worried about the price of Milburn Gravley’s land?”
“All they’ve got to worry about is the price of watermelons and new cars,” said Tim.
“And when it’s gonna be five o’clock. Hell, at five o’clock we’re just starting.” Sherwood got out of the car and tried to prop the sign back up. He held it for a moment against the pale blue summer sky, straining against his vest, and the, disgusted, let it fall back on his face. Then he got back in the Cadillac, drove it straight over the curb, and took off bumping across the rough field toward the bulldozer, intending to have a stern talk with whoever it was that had let his sign fall down.
The Counteroffer
On Tuesday morning, June 26, Sherwood drove out to Stiles’ office and picked up the contract for the 201 acres. Stiles had crossed out Shaddock’s purchase price of $7 million and written in pen above it “8,000,000.00”—his original price. He hadn’t budged an inch. Sherwood had a problem on his hands.
Sherwood whistled when he saw the contract. “Eight million dollars!” he said.
“Well?” said Stiles innocently.
“Well, for a bunch of guys who change the price, ya’ll sure don’t change the commission.”
Stiles laughed.
“I’m serious as a heart attack, Jerry. It’s gotta be seventy-five thousand now. You take that forty-five in the commission clause and make it a seventy-five and initial it out there to the side.”
Stiles looked at Norman and winked. “That son of a bitch sure is a stickler about that, isn’t he?”
“Sure is,” said Norman.
In the car, Sherwood drove immediately to a brand-new fast-food place in a bright orange building, called Del Taco. He went though the drive-in line, got a Double Del with cheese, and parked. In one hand he held the Double Del; in the other, his pocket calculator, which is silver and makes odd chirping noises when its buttons are pushed. He had to think. Stiles wanted $8 million. As near as he could tell, Shaddock wasn’t going to pay $8 million. He had to figure out a way to save the deal.
He put down the calculator for a minute and looked at a land plat Stiles had given him. It showed 75 acres of the maize field being zoned multifamily and turned into an apartment complex, and the remaining 126 acres being zoned single-family and turned into a subdivision. Because more units per acre can be built on it, multifamily land is worth about twice as much on the open market as single-family land. What makes land suitable for apartments is not so much anything intrinsic about the land itself as how the city decides to zone it. Having been annexed into Dallas only recently, the maize field was at that moment unzoned; on July 12, the City Plan Commission would vote on the zoning and, in effect, determine how much it was really worth. Chances were that the people who lived nearby and the city’s planners would want all the 201 acres zoned single-family, to preserve the residential quality of the neighborhood and keep out the swinging singles. The realtors would want as much as possible to be zoned multifamily in order to make more money from it.
For Sherwood’s purposes—which at that moment were to prove to Shaddock that the land really was worth $8 million—it was best to assume that the city would agree to the 75 acres of apartment zoning Stiles wanted, thus doubling the value of those acres. The question of whether the city would in fact turn down the apartment zoning was one that, perhaps, Sherwood could finesse.
“Okay,” he said, picking up the calculator again. “Let’s take our hundred and twenty-six acres of single-family and figure that at thirty-five thousand an acre.” The calculator chirped and a number appeared on its screen:
4,410,000
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