Billy Bob's Texas
Want to start a newspaper? The year 1988 might not have been ideal, but who starts a newspaper when the odds are in your favor?
The year 1988 saw Texans picking up the pieces from a seismic oil and real estate bust and suffering in the midst of a resulting crisis in the state’s financial system. Politics shifted just as dramatically and began a reversal in major-party control of top-of-the-ballot offices and the political makeup of urban versus rural areas. And it saw the birth of a weekly business newspaper in Fort Worth covering a city of just over 400,000 residents.
It was a different world.
Downtown Fort Worth was hardly the showpiece it is today. Writing about downtown in an earlier retrospective, the Business Press reported: “Stores were closing, buildings were boarded up, there was little night life beyond the eclectic Caravan of Dreams music venue, and there was definitely no residential presence.”
John Roach, then CEO of Tandy Corp., said, “You either get better or you get worse. We were on the ‘worse’ end.”
Country music changed its tune in the 1980s from the corn pone jokes that would make you groan on the TV variety show Hee Haw to the country-is-cool fad inspired by the movie Urban Cowboy.
As country became hip (for the rest of the country anyway), in 1981 Fort Worth became home to Billy Bob’s Texas, the “World’s Largest Honky Tonk” and a key driver in transforming the Stockyards – its rail yards and beef-processing plants long gone – into Fort Worth’s iconic tourism destination. The city’s history and Billy Bob’s cache raised Cowtown’s image worldwide.
But even that Texas-sized 100,000-square-foot saloon and dancehall could not withstand the financial and real estate development pressures that were bringing down our bank system, oil industry and construction business.
“Financial mismanagement and unrealized projects drained the nightclub. Billy Bob’s Texas was bankrupt, and on Jan. 8, 1988, it closed, causing great loss to the tourism industry of Fort Worth, especially the Stockyards district,” sums up the Handbook of Texas published by the Texas State Historical Association.
Founder Billy Bob Barnett left town in search of money to reopen and he didn’t have to make the trip. Holt Hickman, a generous local businessman and Stockyards cheerleader, formed a partnership with Cowtown Coliseum manager and major landowner Steve Murrin, along with Don Jury, an original investor in the nightclub, to toss a lifeline.
The boots started scootin’ again during Thanksgiving week of 1988.
Despite the misery at Billy Bob’s, the Stockyards saw new businesses opening, as the front page of the first edition of the Fort Worth Business Press, noted.
Joe Dulle, then president of Stockyards Enterprises, was quoted in an article as saying, “A lot of local people are still coming out here. Billy Bob’s had more out-of-town people.”
No surprise that honky-tonks were feeling the pain in 1988 as North Texas bankruptcies and foreclosures rose to near their peaks by the middle of that year.
Texas’s key industry at the time, oil, was a gusher of pain in 1988. West Texas intermediate crude prices had plunged to below $10 a barrel in 1986 from $27 and cost oil-related businesses hundreds of millions of dollars.
The drilling rig count peaked at 4,530 in December 1981 but fell by 85 percent to 663 in July 1986. The negative trend in oil continued into 1987 but by the following year prices stabilized in the $17 to $18 range, just above a $15-a-barrel threshold that many companies had determined as their profit point after draconian cost-cutting measures.
REAL ESTATE PAIN
In Fort Worth and much of North Texas, however, real estate was the dominant economic driver and affected finance, insurance and construction when it, too, collapsed in 1986, costing tens of thousands of workers their jobs. Half of those jobs were in construction alone.
By 1986, a building boom in Fort Worth as well as Dallas, Houston, Austin and San Antonio had produced a four- to six-year supply of office buildings, apartments and retail space, according to a report by the Houston branch of the Federal Reserve Bank of Dallas. Texas had 49 million square feet of vacant office space.
The state’s unemployment rate was at 7.3 percent at the end of May 1988 while the national rate was 5.6 percent. Texas added a mere 65,400 jobs in the 12 months ending in April 1988, according to the Bureau of Labor Statistics.
Employment was up in health and business services, trucking, airlines and communications, but those gains were offset by losses in retail, finance, insurance, real estate and construction.
The state’s largest financial institutions, most based in this area, put a drain on insurance funds backing deposits in banks and savings and loan companies.
“S&Ls had long been conservative, local lenders, filling a niche in the market for small mortgages,” the Fed reported. “Their fatal flaw, however, was borrowing short to lend for long periods at fixed rates.”
Short-term interest rates, fueled by post-Vietnam inflation and petroleum price hikes, rose sharply. S&Ls were caught with portfolios of long-term mortgages paying only 3 percent to 4 percent using funds costing the institutions as much as 20 percent.
Of the 279 S&Ls in existence nationally at the end of 1987, 225 failed or were forced into involuntary mergers, two merged voluntarily and two were liquidated voluntarily by their directors.
During 1988, there were 90 Texas S&L failures, which accounted for 43.9 percent of the total in the United States that year.
Banks were even worse off with 113 Texas banks floundering and amounting to 56.5 percent of all U.S. bank failures. The Fort Worth Business Press’s first front page on May 16, 1988, reflected those trends with a story on the FDIC seeking buyers for River Plaza National Bank.
SIGNS OF HEALTH
By mid-year 1988, when fatigue from all the negative economic news seemed to be at its apogee, there were some signs of health.
Dallas-Fort Worth ranked third, after New York and Chicago, in a national listing of corporate headquarters. Texas was third, following California and New York, in the number of scientists and engineers. The Massachusetts Institute of Technology reported that five Texas cities ranked among the nation’s top 25 in newly created businesses.
Rising personal income was another promising trend. Higher incomes had trailed the national average since 1982 but drew nearly even toward the end of 1987, the Commerce Department said.
It was an election year in 1988 and voters ushered in a new era for Texas politics. In the presidential race, Republican Vice President George H. W. Bush easily defeated Massachusetts’s Democratic Gov. Michael Dukakis and his Texas running mate, Sen. Lloyd Bentsen, by roughly 60 percent to 43 percent. Tarrant County delivered the Republican national ticket a victory of 61.24 percent to 38.19 percent out of nearly 400,000 votes cast.
Future Gov. Ann Richards became an overnight national sensation with a one-liner she aimed at Bush in her keynote address at the 1988 Democratic National Convention in Atlanta.
In her best Texas drawl she shot the barb: “Poor George. He can’t help it. He was born with a silver foot in his mouth.”
Karma returned the favor in 1994 when Bush’s son, George W. Bush, defeated her for governor of the state.
Bentsen simultaneously ran for and won re-election to his Senate seat against Rep. Beau Boulter, but it was the last contest in which a Democrat dominated the rural vote in Texas while Republicans held sway in the more urban areas. The two parties have since switched their influence among those populations and Republicans have since controlled statewide offices.
A POLITICAL CAREER
Locally, politics saw the birth of a key political career.
Kay Granger, a businesswoman and a former teacher, entered politics, winning election to the Fort Worth City Council in 1989. She became the city’s 41st mayor in 1991 – the first woman ever to hold that office. She was elected to the U.S. House in 1997, becoming the first Republican woman to represent Texas in the House.
The Texas Medical Association also stepped up its political activism in 1987 after being frustrated in is effort to get the Legislature to vote on a package of constitutional amendments to provide tort relief.
Houston Dr. Alan C. Baum, a former TMA president, said the group saw its efforts as “futile” against its foes, the state’s trial lawyers. TMA decided the only way to change things was to influence who was elected to Texas courts.
“We didn’t feel like anything we did in 1987 would make any difference until something could be done about the state Supreme Court,” he told the association’s magazine.
The TMA went all out with “A Clean Slate for ’88,” an extensive grassroots campaign to elect conservative judges to the state’s highest civil bench. Four of the five candidates it endorsed won that year and the medical association sees that election as “a high-water mark.”
IN OTHER NEWS …
Paul Vario, a convicted gangster linked to the Lucchese crime family for more than three decades, died of lung failure in 1988 in a federal prison in Fort Worth, where he was serving a 10-year sentence for extorting payoffs from air-freight companies at Kennedy International Airport. Vario was portrayed in the 1990 movie Goodfellas.
Hurricane Gilbert wrought havoc in the Caribbean and the Gulf of Mexico for nearly nine days in September 1988 and was the costliest and most intense Atlantic hurricane to that time. The storm plowed into Mexico, across Texas and into Oklahoma, claiming 433 lives and costing an estimated $3 billion. The devastation was so bad that the name Gilbert was retired in1989 by the World Meteorological Organization.