May 1997
Big Fish
In the eighties Tilman Fertitta’s seafood restaurants earned him millions while his hard-nosed business tactics earned him enemies. But these days the Galveston native is winning new respect in his hometown by standing up to the most powerful family on the Island.
Tilman Fertitta came home to Galveston last November to deliver the oratorical equivalent of a belly flop in the punch bowl. Speaking to the city’s business leaders at a chamber of commerce luncheon, the wealthy 39-year-old Houston-based restaurateur mesmerized them with his cut-the-crap rhetoric. “I’ve been to forty-four states in the last few years,” Fertitta said, adding that as a tourist center, Galveston was “definitely lagging behind all the other areas I’ve visited. We don’t have amusement parks. We don’t have golf courses … Our greatest asset is the beach, but it’s also our greatest weakness.” The beachfront motels were shabby; their signs were outdated—including, he noted, that of the Holiday Inn, which was owned by his father, Vic, who happened to be in attendance. The audience tittered nervously, as it did when Fertitta brazenly dismissed the Woodlands resort, owned by Galveston patron saint George Mitchell, as a lesser tourist destination “just sitting up there amongst a bunch of trees in north Houston.”
But the CEO of the $500 million Landry’s Seafood Restaurants chain saved his choicest broadsides for that mightiest of Galveston powers, the $500 million Moody Foundation. Perfectly unbothered that the luncheon was taking place at the Moody Gardens Convention Center, Fertitta belittled the Moody family’s civic spirit. “Remember, the foundation has to give the money away,” he said. Yet the Moodys’ latest project wasn’t a new park, beachfront restoration, or other needed endeavor. Rather, it involved the construction of a three-hundred-room hotel on the grounds of Moody Gardens and was a venture that was “doing nobody any favors,” other than Bobby Moody, whose company, Gal-Tex Hotel Corporation, would profit from managing the hotel. The whole deal reeked of greed—and, for that matter, unfairness, Fertitta insisted. The Moodys’ new “nonprofit” hotel, with its tax exemptions and favorable location at Moody Gardens, would cripple the taxpaying hotels, two of which were Fertitta’s. “We’re sending the wrong message to the rest of the United States,” he warned. “You’re never going to get major developers in here. We’re saying to them, ‘Stay out of Galveston.’”
The audience, as one, gulped. “I will not let the Moody Foundation compete unfairly without a fight,” Fertitta vowed. He was already suing the Moodys and the city over the matter, but he didn’t intend to stop there. Noting that a U.S. House Ways and Means subcommittee would be investigating tax-exempt organizations, Fertitta promised, “I plan to be right in the middle of it.”
The speech was classic Tilman Fertitta, brazen to the point of insolence yet impossible to wave off—and, in the end, rather breathtaking. The audience gave him a standing ovation. Afterward, a chamber member was heard to gush to the speaker, “How do you get your pants on in the morning with those big balls of yours?” Even Fertitta seemed dizzied by his performance. “I’ve never felt so right in all my life,” he told his father later.
It was an altogether new sensation for a surviving warrior of the eighties’ take-the-money-and-run amorality. During that decade, Tilman Fertitta was known more for his nerve and his artful dodging than for his principles. By the dawn of the nineties he would emerge unscathed with an empire as reflective of his day as insurance and energy were of the Moody and Mitchell era. Now he was a full-blown player, Houston’s most dynamic young businessman, a Wall Street darling, and a friend of President Bill Clinton’s. But he was nobody’s hero, nor would he be, until he came home to Galveston as an avenging angel, where he could be not only rich but right.
uring my ten or so visits with fertitta, I couldn’t help but notice how the electric braggadocio of his monologues would suddenly give way to some blasé slogan that would seek to remind me that I was in the presence of a good guy. “Do the right thing,” he would interject. And, “It’s nice to be important, but it’s more important to be nice.” Beneath the gruff, predatory exterior lurks a man who very much wants those around him to think the best of him. Of course, since Fertitta built Landry’s into the second-biggest seafood chain in America (after Red Lobster), his life has become cluttered with unctuous suitors who will cut him all manner of slack. Fertitta became identified with the Democratic party not because of his political views, which are generally conservative, but, he says, because “the Democrats embraced me.” Clinton’s party saw in Fertitta not so much a kindred spirit as a clean-cut young family man who wasn’t a personal-injury lawyer. Here was a guy whose image and pocketbook the Democrats could exploit for decades to come. So far, Fertitta hasn’t complained. He has been Clinton’s guest at the White House four times.
If Fertitta, with his guileless patter and asymmetrical grin, were one of his signature restaurant’s marquee signs, it would blare out, “Work In Progress.” He is given to exclaiming in wonderment, “I’m so young.” But this apparent vulnerability is nothing more than a seductive front. For even as he molds himself into Citizen Fertitta, CEO Fertitta remains a shrewd hustler with business instincts that are chillingly acute. Ever since his days as a junior high school kid selling candy and gum to his classmates at a markup, Fertitta has known his calling. “I can’t draw a stick person,” he acknowledges. “I can’t play a musical instrument. But I’ve always had a knack for making money.”
He was never merely a wage earner, though. Even as a fourteen-year-old kid working the floor of his father’s Galveston restaurant, Pier 23, young Tilman could discern what made a business successful. Remembers Vic Fertitta, an affable lug whose voice assumes an almost worshipful tremor when speaking of his middle son: “Tilman would tell me, ‘Daddy, the food is taking too long coming out of the kitchen. It should all come out in eight to twelve minutes.’ One Friday night two waitresses got in a fight. He punched the clock for both of them, fired them, and took over their stations, four tables each. That’s when I knew he was different.”
In 1974 the Fertittas relocated to the west Houston suburbs, and Tilman attended Westchester High School, the same one I did. I remember him as a swarthy guy who threw his weight around and didn’t settle for anything second-rate. He drove a Mustang convertible, went after the flashiest of girls, and when the football coaches told him he would be playing on the offensive line rather than at running back, he quit the team. School didn’t much interest him, as his grades reflected. On our newspaper staff, he sold ads to neighborhood businesses—drawing a commission for his trouble, naturally—and otherwise sat in the back of the classroom, quietly researching the stock market. Few of us paid him any mind or thought we had any reason to. (Those who did include Steve Riley, now Fertitta’s chief of operations for the Joe’s Crab Shack division, and junior high school buddy Richard Ervin, now the vice president of restaurant operations for Landry’s.)
After spending two years at college to appease his parents, Fertitta set out to earn his fortune. In 1978, inspired by a cousin’s clothing manufacturing business in Dallas, he opened a women’s ready-to-wear shop stocked with samples he acquired on the cheap from the Dallas Apparel Mart. Business wasn’t bad, but the pace was too slow, the possibilities too narrow. His ambitions wandered next door to a shop run by a couple who distributed Shaklee vitamins. They weren’t raking it in, but they didn’t see the angle: “The way to sell these vitamins wasn’t door-to-door or through distributors, but to open up Shaklee stores,” Fertitta recalls. “Back then all you had to do was walk into some new strip center with the first and last months’ rent. I opened up Shaklee stores all over Houston for about fifteen to twenty thousand dollars.”
It was a small-time gig, but it was not without its rewards. Fertitta learned how to give a sales talk, was provided with a bonus Cadillac from Shaklee for his exemplary hawking, and most important, discovered the next bandwagon. While visiting one of his Shaklee stores, he noticed kids filing into a video arcade to play Pac-Man games. Fertitta ambled into the arcade, squeezed through the gaggle of juveniles, and asked the manager, “Say, how do you go about getting these machines?” He then contacted the manufacturer, put 20 percent down, financed the remainder, and thereafter roamed greater Houston, proposing to place a couple of video games at this hotel or that newsstand and split the pot with the proprietors. By 1983 each of his four hundred or so games was earning him an average of $200 a week.
The twentyish college dropout was rolling in it, and he flashed it wherever possible. In 1986 Fertitta showed up to our ten-year high school reunion in a limousine. He acquired Rolexes, bought into the Houston Rockets as a limited partner, and threw a budget-busting soirée at his new Memorial-area mansion (in honor of football coach Jack Pardee), which featured a theater and, of course, a video arcade. The house was custom-built, courtesy of Fertitta Construction, the company he had founded in 1982. Like half of Houston, Fertitta was riding Boomtown’s real estate wave, poised to fall on his highly leveraged butt. Such was the arrogance of the era that when the market cratered and Fertitta found himself in a restaurant scribbling his debts on a linen napkin and running out of room after $10 million, he could manage a laugh and a ticket to Las Vegas. As Fertitta puts it, “My problems were big problems, not little problems. I still drove a Mercedes. I still lived well.”
