Category Archives: News – Houston Local

Fearless Critic 2010 is here

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Fearless critic2 The best local restaurant evaluation guide — Fearless Critic Houston Restaurant Guide 2010 — is now available. The brutally honest restaurant guide is put together by a group of undercover local critics who "dine incognito, don’t accept freebies, and don’t pull punches" in rating a cross-section of 450 restaurants in the Houston metropolitan area.

Da Marco, Tony’s and Catalan take the top three spots this time around (the guide is published every other year), but one of the aspects about Fearless Critic that I most enjoy is that it rates restaurants based upon the quality of the food relative to cost, so many not-so-high-priced restaurants rate far better than many expensive restaurants. For example, Huynh, a relatively inexpensive Vietnamese restaurant in downtown, comes in at 7th in the rankings.

You won’t always agree with their evaluations, but the Fearless Critics make their case well. It’s definitely worth the eleven buck cost currently on Amazon. Check it out.

The Landry’s debacle

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Landry's logo_ There are bad stock plays and there are horrible stock plays. And then there is Houston-based Landry’s Restaurants, Inc.

This story began back in July of 2007 when the company announced that it was delinquent in its regulatory filings with the SEC and that it was in need of refinancing over $400 million in debt in a rapidly deteriorating debt market. Shortly thereafter, the company sued some of its bondholders for declaring the company in technical default under their bonds, but the company quickly settled that litigation on not particularly good terms.

A few months later, Landry’s announced in January 2008 that its CEO and major shareholder (39%), Tilman Fertitta, had made an offer to take the company private by buying the other 61% of the company’s stock for $23.50 share, which worked to be a $1.3 billion deal, including debt.

Given the circumstances, that offer sounded pretty good, particularly given that the proposed purchase price was a 40% premium over the $16.67 share price at the time of the offer.

Unfortunately, a spate of shareholder lawsuits followed Fertitta’s bid. By early March, 2008, it was apparent that Fertitta’s bid was so speculative that he hadn’t even lined up financing for it.

So, in April of 2008, Fertitta lowered his offer to $21 per share because of "tighter credit markets", and Landry’s announced that it had accepted that price in June.

But by the fall of 2008, the financial crisis on Wall Street had roiled credit markets even further and Hurricane Ike caused considerable damage to several Landry’s properties.

So, in October of 2008, Fertitta lowered his offer to $13.50 per share.

Then, in mid January of 2009, Landry’s announced that it was terminating the proposed deal with Fertitta. The reason was a bit convoluted, but here is the gist of it.

Landry’s contended that the SEC was requiring the company to issue a proxy statement disclosing information about a confidential commitment letter from the lead lenders on the buyout deal. However, Landry’s was negotiating with those same lenders to refinance the bond indebtedness that the company promised to refinance in connection with October, 2007 litigation settlement with its bondholders noted above. Inasmuch as the lenders’ commitment for financing Fertitta’s buyout required that the terms of the commitment remain confidential, the company elected to terminate the buyout rather than risk that the lenders would declare a default for breach of confidentiality and back out of the financing commitment as well as the negotiations on refinancing the bond indebtedness.

Amidst all this, Landry’s stock was tanking, closing at under $5 per share.

Meanwhile, while the take-private bids languished and the company’s stock plummeted to historic lows, Fertitta continued to buy more Landry’s stock so that he now controls somewhere in the neighborhood of 55% of the company’s shares.

Yes, that’s right. Despite a series of unsuccessful take-private offers over a year and a half, Landry’s board failed to obtain a standstill agreement from Fertitta that would have prevented him from taking a majority equity position while Landry’s stock price was tanking.

So, given all of that, how could Fertitta and the Landry’s directors screw things up any worse?

How about proposing yet another deal in which Fertitta would buyout Landry’s other shareholders in return for giving them an equity stake in a publicly-owned spin-off (Saltgrass Steakhouse) in a brutally competitive niche of the restaurant market?

Prediction: This is not going to turn out well.

A real head scratcher

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James Davis The Stanford Financial Group scandal has been anything but typical, but yesterday’s developments may have been the most bizarre yet.

The big news, other than the hospitalization of R. Allen Stanford, was the guilty plea that Stanford’s right-hand man and long-time friend, James Davis, entered in connection with a plea bargain that he worked out with federal prosecutors.

The background section of the plea deal makes for some entertaining reading (bribes to, and a blood oath with, an Antiguan bank regulator?). But the more interesting aspect is that Davis’ plea is the latest chapter in a most curious defense strategy.

From almost the outset of the Stanford Financial scandal, Davis’ attorney — Dallas-based attorney David Finn — has been telling any media outlet that was willing to quote him that his client was guilty of a huge fraud on Stanford investors and that Davis was going to plead guilty to charges as soon as he could work out details of a plea deal with federal prosecutors. Even the most rabid prosecutors would never risk making such public statements, so effectively Finn has been doing much of the prosecutors’ public relations work for them.

And now we finally know the terms of the plea deal between the prosecutors and Davis.

On one hand, David pled guilty “in exchange for” a Level 43 under the Sentencing Guidelines (reduced from a Level 46 — do the Sentencing Guidelines even go up that high?!) “with acceptance” deal. Based on my understanding, that means that Davis has agreed to a prison sentence of 30 years to life. Davis is 60, so assuming that he gets the full benefit of the the traditional 1/3rd off under the guidelines for being a good snitch (no cinch bet in Judge Hittner’s court), Davis will do 20 years and be 80 by the time he shuffles out of prison.

On the other hand, the prosecution "gets” Davis as their primary witness, who — according to the prosecution’s own theory of the case — was one of the key participants in a six billion dollar scam from the beginning. If, as prosecutors alleged during the hearing, Stanford Financial was a “giant house of cards," then why cut a “deal” with the guy who was one of the lead architects of the scam?

Well, we now have the answer to that question. The plea deal is not a "deal" at all. It’s total surrender.

Davis is reportedly working as a day laborer at $10 per hour to pay his legal fees. From the looks of it, he is getting the quality of representation that he is currently capable of paying for.

Amazingly bad decision-making

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ashby-highrise-renderingOne fringe benefit of economic downturns is that local public officials generally defer their financial decisions, which tend to be uniformly bad even during good economic times.

Except apparently in Houston.

Over the past few days, Houstonians have been bombarded with a flurry of bad decisions by their public officials, who seem undeterred by the growing consensus that the nation is going through the worst economic recession since the Great Depression of the 1930’s.

First, as Kevin Whited notes, the City of Houston publicly announced this past Friday that it had removed the final local regulatory roadblocks to the construction of the long-delayed Ashby high-rise condominium project in a tony residential subdivision near the Texas Medical Center. In so doing, the City forgot to tell the news to the most interested people, namely the owners of the property where the project is to be built.

At any rate, the City’s announcement ended an egregious example of local governmental interference with productive development of private property. Of course, in the present climate for financing high-rise condos, the chances of the owners being able to revive the project any time soon are about as good as the Stros’ chances of leaping into World Series contention.

Thus, rather than having dozens of wealthy condo owners paying substantial amounts of property taxes and for other City services, the City continues to enjoy the “benefit” of a run-down apartment complex on the property where the Ashby high-rise was to be built.

So, not only did the City fail to take advantage of the opportunity to increase its tax base through re-development of the Ashby high-rise site, it benefited the owners of the site by deterring them from taking the financial risk that would have generated that financial boon to the City.

Now, that type of government mismanagement really takes some effort.

Meanwhile, as if trying to one-up the City’s bungling of the Ashby high-rise deal, local governmental officials were reported on Monday to be on the “home stretch” of putting together a financing package for construction of a new downtown soccer stadium, a new jail facility and the redevelopment of the Astrodome.

I mean, really. Where to start?

As noted many times, the City has already paid millions at a top-of-the-market price for the site of the proposed soccer stadium while at least maintaining that it’s up to the owners of the Dynamo soccer club to put together the private financing for the construction of the stadium itself.

Now, the City is going to finance the construction of the soccer stadium itself through selling TIRZ bonds? When did the prior approach change? Did I miss something?

Similarly, there’s not much left to say about the City and the County governments’ reprehensible handing of the Harris County and City jails, both of which have both been condemned by the Department of Justice because of their horrific condition and mismanagement (the latest on the City jail conditions is here).

It’s clear that the true problem of the existing jails is a combination of underfunding and needless overcrowding from sloppy processing of prisoners who do not need to be incarcerated pending their trial. So, what do local governmental officials do? Wait until the conditions become so barbaric that all they can do is throw tens of millions of dollars (perhaps illegally?) at constructing yet another jail facility in an attempt to placate federal officials.

But both the proposed soccer stadium and jail facility pale in comparison to the potential boondoggle that is the Astrodome redevelopment project.

After years of assuring local citizens that they would not be called upon to pick up the financing of redeveloping the Dome, local governmental officials are now proposing that the citizens do just that.

And as if to make that change of policy even more galling, the governmental officials who leaked the information on the financing plans to the Chronicle did not even bother to spell out what the Dome is to be turned into as a result of the redevelopment.

So much for transparency, eh?

In the meantime, as City and County officials dither over the details of these proposed boondoggles, City officials continue to ignore this ticking financial time bomb (see also here) while wasting billions on yet another boondoggle, the spending on which swamps even the quarter of a billion proposed for the current round of boondoggles.

Frankly, it’s difficult to imagine how even the traditionally resilient Houston economy is going to withstand the dead weight of such pervasive financial mismanagement.

Albert Collins

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I saw Albert Collins perform at a Houston jazz club back in the late 1970’s when he opened for a well-known local jazz musician. Suffice it to say that Albert stole the show. The headliner decided to have Collins and his band come out and play with him during his part of the show. It was a very smart move.

Houston’s connection to the new U.S. Open champion

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Lucas-Glover-2_2319691 Houston is synonymous with golf, so it’s appropriate that new U.S. Open champion Lucas Glover‘s former teacher and mentor was the late Dick Harmon (see also here), who was one of Houston’s most respected golf instructors for decades before his sudden death in 2006. Glover was one of Dick’s pallbearers, delivered one of the eulogies at the funeral and had to fight back tears when he was asked about his relationship with Dick during his post-U.S. Open interview session. What a fitting tribute for a student to give to a wonderful teacher whose spirit still permeates Houston’s golf community.

The 29 year-old Glover has long been considered a likely star by other professional golfers and appeared to be ready to fulfill that promise in the 2005-2006 seasons when he won his first tournament (the 2005 Walt Disney Classic), recorded 16 top-10 finishes and just missed earning a spot on the 2006 Ryder Cup team.

DickHarmon However, Glover struggled after Harmon’s death in late 2006 and fell all the way to 178th in the World Golf Rankings after last season. Things got so bad that Glover put his clubs away for two months after last season to refresh himself from the grind of PGA Tour golf. Before the U.S. Open, he had already shown signs of regaining his form this season with a tie for 3rd at the Buick Invitational, a tie for 2nd at Quail Hollow and a jump to 71st in the World Golf Rankings. But Glover now appears ready to vault into the top echelons of golf with his U.S. Open championship at Bethpage. He has a superb all-around game.

Finally, as satisfying as Glover’s victory was, it may not have been as gratifying as David Duval contending for the title and finishing in a tie for second. As noted here almost five years ago, it’s been a long, strange trip back to the top tier of professional golf for Duval. Here’s hoping that he stays this time.

Lucy and Ethel in Iowa City

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Lucy and Ethel While reminiscing about my late mother with family members and friends at her recent funeral, it occurred to me that her remarkable life would be a great subject for a Larry McMurtry novel.

Along those lines, Sarah Swisher, an old family friend and a columnist for the Iowa City Press-Citizen, penned this column regarding an hilarious caper from the early 1960’s involving my mother and Sarah’s mother, who were dear friends. What started out as an attempt to create a plot for an Alfred Hitchcock movie quickly transformed into an episode of I Love Lucy with a touch of The  Honeymooners.

You really can’t make this stuff up.

A continuing civic shame

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Harris_County_Jail_ My first blog post on the chronically shameful condition of the Harris County Jail was four years ago. There have been quite a few others since then.

Still, nothing has changed.

Despite my libertarian leanings, it’s way past time for the federal government to intervene and correct the inhumane conditions of the Harris County Jail.

The Harris County Commissioners have proven themselves to be incapable of administering the jail properly, reflected by County Judge Ed Emmett’s most recent suspension of belief over the scathing report: “Actually, if you read the report, it is fairly positive. It has some episodic events but it does not show a pattern of problems.î Moreover, many years of over-sentencing by local criminal district judges hasn’t helped the situation, either. On a day in which most of the civilized world is decrying North Korea’s imprisonment of two American reporters in one of that country’s horrific labor camps, it’s worth reminding ourselves that we do not have to travel any further than our local jail to witness barbaric prison conditions.

Houston possesses many things of which to be proud. Sadly, the Harris County Jail is not one of them.

Update: Scott Henson agrees with me.

Update II: Chris Bradford recounts his experience on the in capability of Harris County administrators to operate the jail humanely.

A productive idea for the Dome

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astrodome Over the weekend, the Chronicle ran this story about Harris County officials considering an idea to convert the Astrodome into a planetarium and a medical and science education facility. It’s actually a good idea and one that was suggested here months ago. Given the Dome’s proximity to the Texas Medical Center, a county/med center partnership to turn the Dome into the premiere medical/science educational facility in the world makes a lot of sense.

On the other hand, the financing of such a project is not going to be easy, particularly in this economic climate. Nevertheless, given the potential benefit to Houston of becoming a leader in medical/science education, hopefully county officials will give this proposal a fair shake. It certainly makes far more sense than the alternative proposal.

Common sense aside, everyone needs to realize that this new proposal could effectively be scuttled by the financial commitments that have already been made in connection with Houston’s previous poor public financing choices. That risk reminds us that such poor utilization of resources ultimately has consequences. It could a harsh irony if Houston’s most well-known landmark is a victim of those bad choices.

Remembering a special mother

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Mag and Walt 1989-90.jpgMy mother, Margaret Allen Kirkendall, died yesterday evening at Finley Hospital in Dubuque, Iowa after a lengthy illness. She was 86 years old.

The following is a lovely obituary for Margaret that my brother Matt wrote with contributions from many of my siblings. It conveys well the special nature of this remarkable woman and her considerable contribution to making Houston a better place to live.

Margaret Allen Kirkendall died on Thursday, May 28, 2009 at 9:22 P.M at Finley Hospital in Dubuque, Iowa after a lengthy illness. She was 86 years old. Funeral arrangements are pending with Egelhof, Siegert, & Casper Funeral Homes in Dubuque, Iowa making the arrangements.  The Funeral Mass and burial will be in Texas.

Margaret Jane Allen was born on March 24, 1923 in Cedar Rapids, Iowa, the first child of Grace (Payne) and William Allen. She grew up in Cedar Rapids and graduated from Franklin High School in 1940. At an early age, Margaret decided to become a nurse and eventually put herself through the nursing program at the University of Iowa in nearby Iowa City, graduating with an RN degree in 1946.

Margaret planned to pursue a career in academic nursing, but met a new medical resident, Dr. Walter M. Kirkendall, who had come to the University of Iowa following his military service in Italy during World War II. In their own version of “Pride and Prejudice,” initial mutual irritation turned into fascination, and subsequently, love. They were married at St. Thomas More Catholic Church in Iowa City on March 30, 1948 with Father McElhaney officiating.

Throughout their life together, Walter and Margaret had a close relationship and truly seemed to complete one another. As Walter pursued his academic career in medicine at the University of Iowa Medical School, Margaret supported his efforts and always worked to provide a stable home life for him, providing the venerable “safe port in stormy weather”.

Margaret and Walter were the proud parents of 10 children. During the 1960’s, their home at 430 Brown Street in Iowa City was known as a busy and often boisterous place. There was always an open door for the frequent visitors and Margaret was well known for her energy, hospitality, and plentiful food (industrial cooking she termed it). To the amazement and consternation of her children, she developed a system of friends and community contacts through which she seemed to know the names and activities of every child in the Iowa City/Coralville area. The result of this was that her children found that they could never get anything by her (not that they didn’t try on occasion).

In 1971, Walter accepted an opportunity to help establish a new medical school at the Texas Medical Center and moved the family to Houston. Margaret admitted to some trepidation at leaving Iowa and her many friends, but she lived by her often-quoted adage that “you bloom where you are planted.” With this attitude, it was not long before she brought many new friends and Texas traditions into her life that was centered around the vibrant home she established for her family at the corner of Sage Road and Del Monte Drive in Houston. Margaret transferred her open door policy from Iowa to her family’s new home in Houston and, over the ensuing 20 years, literally hundreds of medical students, colleagues, and other friends were attracted to the dynamic household that Margaret lovingly maintained.

Throughout this time, Walter and Margaret continued to work as a team to help establish the Department of Internal Medicine at the University of Texas Medical School at Houston. Their efforts helped set the foundation for the medical school and its subsequent development into a premier teaching institution.

At Walter’s death in 1991, Margaret admitted that a large part of her died with him. Despite her loss, she remained busy with her family and friends and participated in a wide variety of community service, often as what she termed as “the old nurse.” In retirement, she lived in New Braunfels and then Austin, Texas until she finally returned to Iowa, to live in Dubuque.

While her later years were hampered by illness and disability, she has been supported throughout this time by her many friends, especially Nora Lee Balmer, Jean Eckstein, and Virginia Grady of Iowa City, Dr. Jack Tausend of Houston, Texas, and her oldest and dearest friend, “Auntie Ruth” Pichette, of Highland, Michigan.

She is survived by her sister, Francis Allen Rassenfoss of Park Ridge, Illinois and her 10 children: W.C. (Alice) of Seguin, Texas; James (Kathleen) of Minneapolis, Minnesota; Matthew (Isabelle) of Dubuque, Iowa; Thomas (Susan) of the Woodlands, Texas; David (Ann) of Tomball, Texas; Nancy (Robert) Cook of Austin, Texas; Mary of San Antonio, Texas; Kathryn (Gene) Acuna of Austin, Texas; Joseph of Los Angeles, California; Michael of Austin, Texas; her 32 grandchildren and five great grandchildren, (with another on the way).

Memorial gifts may be sent to the endowment for the Walter M. Kirkendall, M.D. Lecture Series in Internal Medicine at the University of Texas Medical School, 6431 Fannin, MSB. 1.122, Houston, TX, 77030, in care of Philip C. Johnson, M.D, F.A.C.P.

The family would like to acknowledge and thank the following: Father Dwayne Thoman, Deacon Dave McGhee, and Sister Damian O’Brien for their strong spiritual support; Dr. Ronald Iverson, Dr. Darryl Mozena, Dr. Roger Shafer, the administration, nurses, and staff of Stonehill Nursing Home, and the nurses and staff of the 5th floor at the Finley Hospital for their expert and compassionate care of Margaret.  Finally, the family extends our most heartfelt thanks to Joan Reimer, who provided Margaret with selfless, dedicated, and loving attention as her caregiver over the final years of her life.

Funeral arrangements are being handled by Tres Hewell Mortuary,165 Tor Dr. Seguin, TX (830) 549-5912 (www.treshewell.com). The family will greet friends at the funeral home on Tuesday, June 2nd from 5-7 p.m., and a Rosary will follow at 7 p.m.

The funeral will be on Wednesday, June 3rd at 10 a.m. at St. Peter and Paul Catholic Church, 386 N. Castell St, New Braunfels, TX. The family will have a reception for friends at the church immediately following the funeral.