A. Lee Graham email@example.com
As managing partner of Sanford, Baumeister and Frazier LLP, Rick Baumeister knows tax preparation. But the longtime certified public accountant also knows Fort Worth, tracking the city’s shifting demographics while helping clients navigate the tax code. “It never gets boring,” said Baumeister, 52, who moved to Cowtown in 1985 and wasted no time in embracing the community. Whether serving as finance committee chairman of Downtown Fort Worth Inc. or past president of the Texas Society of CPAs, Baumeister shares his accounting know-how while working to enhance wealth and reduce taxes for his clients. Yet he faces some uncertainty after the recent sale of the historic Sinclair Building. The downtown fixture along Main Street was recently sold by Sinclair Building Partners LP, a group headed by Baumeister, his wife, Allyson Baumeister, and Ken Jaffe. Two months after Sinclair Holdings LLC, a local investment group, snapped up the property, Baumeister has no idea where – or when – his practice will relocate. For now, he and his staff continue working from the 13,000-square-foot, 15th floor space they’ve called home since 2007. Baumeister took some time out of his schedule to discuss finance and the Sinclair deal with the Fort Worth Business Press.
You’re obviously no stranger to Fort Worth real estate. From what your clients are saying, are the city’s housing and office markets making a comeback? We had some rough years after the 2008 recession. It appears to me the answer is yes. A lot of it has to do with continued strengthening of the oil and gas business.
Are you referring to the focus on liquids rather than gas? Yes.
What are the primary concerns of your clients these days? Are there any economic factors specific to this area that perhaps pose a greater challenge than those on a national level? Questions are always going to be on what does the future hold, and I know that may seem kind of silly, but the fact is that when landlords have tenants, they have to worry about whether their tenants are going to stay in business.
Are there certain tax strategies that work better now than in recent years? And along the same lines, how tough is it to keep abreast of changing federal regulations in advising your clients? It gets harder every year. Tax rates are rising, and so as a result I would think that a natural progression would be that tax-deferred exchanges, as defined as Internal Revenue Code 1031 exchanges, I would expect those to be on the rise.
Why is that? With tax rates rising, people will be more motivated to do tax-deferred exchanges when tax rates begin relatively low. For the last several years, clients have not been as motivated to do that [participate in exchanges]. With tax rates rising, I think you’ll see more tax rate exchanges.
Name some of the biggest or most significant Fort Worth real-estate transactions in the past year, in your opinion. I would think the most significant, by far, would be the development or redevelopment of Sundance Square.
Is its impact specific to downtown, or is it citywide? I think it would have a huge impact, a broader impact. I would expect it to have a huge impact on tourism, the office rental markets, et cetera. I would think the number of areas that will help will be many. It’s a big deal.
Does your practice have an interest in the development? I am involved with a partnership that owned a piece of property that is a part of that. We owned a small parking lot for a short period of time, so we had a very tiny part in it.
But you’re part of the partnership that recently sold the Sinclair Building, where your offices are. Where will you relocate? We don’t know.
Have you been given a date at which you must be out of the building? No date for moving.
The scuttlebutt is that the building will be turned into a boutique hotel. What do you know about those plans? We’ve heard that, too, but have not heard anything official.
Why did you choose to sell the building? We didn’t choose to sell; the building was not for sale. The buyers approached us and made us an offer – a fair offer – and we accepted it.
How significant is that building for Fort Worth? It’s an extremely important piece of architectural history. The Art Deco style of the building is rarely seen and virtually impossible to duplicate. It is a very important piece of Fort Worth’s history.
Let’s go back a few years. Did you grow up in Fort Worth? No, I grew up in Western Springs, a suburb of Chicago. I moved here in 1985. Our partnership bought this building in 2006 and I began receiving information from people who had childhood memories of this building. It was very interesting.
I realize your firm advises clients from many industries, but is there a particular focus these days? Our firm does a lot of oil and gas companies. We have almost 50 people [on staff], and we don’t all do the same thing. We have people who do work in oil and gas and people in the manufacturing industry. I am managing partner of the firm, and I spent a lot of time managing the firm, and the clients I have are mainly in construction and real estate and senior living, which are related.
Trinity Terrance recently announced expansion plans. Do you see rising demand for senior housing in the future? All the demographic information you see shows the population is aging and Baby Boomers are getting older. What I have learned is that whatever needs of these Baby Boomers have been, if they were 40 to 25, or 65 to 50 or whatever, the number of people in that age group is just really massive. As a result, guess what’s coming? It’s retirement centers, because people need care and when they hit 75 and 80, it will be a population explosion. I don’t know specifically about Trinity Terrance, but the senior living in Fort Worth is growing.
What’s more challenging: your role as managing partner of your firm or your position at Downtown Fort Worth Inc.? My position at Downtown Fort Worth is as a volunteer, so it’s not full time. Downtown Fort Worth is an extremely important organization that promotes coming to, living in and working in downtown.
What’s the toughest part of your job? What’s the most rewarding? The hardest part of my job is trying to help us hire people in order to meet a continuing expansion of our practice.
Looking ahead, does your practice have any changes or expansion plans in the near future? I would not say any changes, but I would say we are still continuing trying to hire people.
To serve any particular industry: oil and gas? Construction firms? It would not be industry-related, but rather it would be related to tax preparation. Specialized industries are not quite as imperative. When we look to hire someone, we’re looking to hire another audit partner. We would love it if that person had oil and gas, manufacturing, real estate, senior living, health care – we would love it if that person had [experience in] all those industries. We would be looking for someone who does not have experience in all those areas; we would not expect that person to have all of that.
What led you to move to Fort Worth? Why here? I have been working in the Fort Worth community since 1985 and I have no regrets about working here. I would recommend it to anybody and I look forward to the business community in Fort Worth to remain one of the greatest places to work in the country.