Jim Crane proposes to take EGL private

insider trading.jpgLast year, the Houston business community saw Kinder Morgan bail out of the increasing headache of operating as a public company. With the coming of the new year, Houston-based EGL announced that it is going private in a $1.2 billion deal led by its CEO, Jim Crane, and private equity firm General Atlantic.
EGL stands for EGL Eagle Global Logistics, which provides services such as supply-chain management, warehousing and freight forwarding for business and government air and marine shipments. The company earned $58.2 million in 2005 and had net income of $45.4 million through the first nine months of 2006. Crane founded EGL about 20 years ago in Houston, took it public over a decade ago, and remains its largest shareholder with 18%. General Atlantic has proposed to pay $36 a share for the rest of the stock, which would generate a 21% premium over the companyís $29.78 closing price as of Dec. 29. Crane and General Atlantic have secured $1.13 billion in financing, and the balance of the proposed purchase price would consist of equity contributed by General Atlantic, Crane and other senior EGL executives. EGL’s board has formed a committee to study the offer.
As noted here in regard to the Kinder Morgan deal (also noted here in regard to New York City), the EGL deal is a direct result of the increased cost of public equity resulting from the ill-advised regulatory maze that government has imposed on public companies in the post-Enron era. As Professor Bainbridge says, “legislate in haste, repent at leisure.” As is all too common, the governmental solution to business scandals is more harmful to its investor-citizens than the business scandals themselves.

Tributes to a marvelous teacher

lence (1).jpgToday is the birthday of the late Ross M. Lence, one of Houston’s finest teachers of the past generation. On Dec. 1st — the final day of classes for the fall semester at the University of Houston — I was privileged to be one of the speakers at the University’s memorial service for Ross at the A.D. Bruce Religion Center on the University’s central campus.
As with most anything that involved the reasonable Dr. Lence, the service was a joyous affair, alternately hilarious and moving. Bill Monroe, one of Ross’ colleagues at The Honors College, had one of the best cracks of the day when he passed along another colleague’s observation about the notoriously difficult-to-pin-down Dr. Lence:

“A colleague and mutual friend said that, for over a decade, he thought Lence was a liberal Jew from Chicago, only to discover that he was a libertarian Catholic from White Fish, Montana.”

After a festive reception at the UH Honors College, many of those who attended the memorial service walked across campus to Robertson Stadium to attend the Conference USA Championship game between the Houston Cougars and the Southern Mississippi, which the Coogs won in stirring style. All in all, a wonderful afternoon paying tribute to a dear friend and then an enjoyable evening of college football on a beautiful fall day in Houston.
The following are pdf’s of the tributes to Ross delivered at the memorial service. Take a moment to read a bit about a great teacher and fine man who influenced the lives of thousands of Houstonians over the past 35 years:

The program for the memorial service is here;
Bill Monroe’s opening and closing remarks are here;
Susan Collins, one of Ross’ colleagues in the UH Political Science Department, gave this tribute and also passed along this tribute to Ross for PS Magazine that Susan wrote with former UH Political Science Professor Donald Lutz, who was instrumental in bringing Ross to the University of Houston;
Ed Willems, a UH Professor Emeritus of Psychology and a longtime teaching partner with Ross, gave this heartfelt tribute entitled “Ross Lence: He taught students and me.”
Andy Little, one of Ross’ longtime students and a student advisor in The Honors College, read Ross’ moving essay On Teaching;”
My tribute to Ross is here, Harris County Treasurer-elect Orlando Sanchez’s tribute is here, and the tribute of Jeff Dodd, a partner at Andrews & Kurth who specializes in corporate securities law, is here; and
Finally, Honors College Dean Ted Estess was scheduled to reprise his moving eulogy that he originally delivered in July at Ross’ funeral mass, but he chose instead to pass along extemporaneously several anecdotes and observations about Ross, a couple of which brought the house down with laughter.

Inasmuch as Ross often used to help needy and deserving students financially, The Honors College has established a scholarship fund in Ross’ name. Donations to that fund may be sent to the Ross Lence Scholarship Fund, The Honors College, University of Houston, 212 M.D. Anderson Library, Houston, TX 77204-2001.

The University of Houston Master Plan

The University of Houston has been making some big plans recently, and this Matt Tresaugue/Chronicle article reviews them:

UH leaders intend to transform the campus with more housing, more restaurants, more shops and other places to be outside the classroom.

The goal, campus leaders said, is to create an environment that attracts the best scholars and encourages them to stick around. [. . .]

The plan also calls for doubling the usable square footage of classroom and office space, replacing parking lots with garages and closing part of Cullen to create a tree-lined pedestrian walkway by 2020.

What’s more, the campus would meld with the surrounding Third Ward while reducing blight and encouraging more retailers to move in. University officials already are talking with private developers about a “town center” with shops and restaurants on both sides of Scott between Holman and Alabama.

Campus leaders do not know how much everything would cost but estimate the first five-year phase at $300 million, and largely at the university’s expense. The redevelopment plan will be a key piece of an upcoming fundraising campaign, officials said.[ . . .]

The new plan would establish five themed precincts on campus, reflecting the “smart growth” trend elsewhere, with dense housing, retail and office space in village configurations.

The interior of the campus would be almost untouched.

To the north, campus leaders envision an arts village with a sculpture garden, outdoor amphitheater, cafes, galleries and housing, including loft apartments, on what are now parking lots.

About 1.6 million square feet of academic buildings and housing for graduate students would be added to the so-called professional precinct, to the east of the campus core.

Another area, the Wheeler precinct, would be devoted to undergraduates, with plans calling for low-rise residence halls to blend with the nearby University Oaks neighborhood.

To the west would be a Robertson Stadium precinct with 1.9 million square feet in new academic buildings, housing and retail near two proposed Metro light rail lines.

The University’s summary of its master plan — with renditions and video — is here.

Despite the story on the ambitious UH master plan, the Chronicle still ignores the more important story about UH.

The University of Houston in many ways is the most remarkable major public university in Texas. Started in 1927 as a junior college, UH grew quickly during its infancy while being endowed entirely with philanthropic contributions from generous Houstonians, which was made all the more remarkable by the fact that, at the same time, Houstonians were also contributing substantial amounts to the Rice University endowment.

Inasmuch as bustling UH did not even become a state university until 1963, UH has received only a fraction of the endowed capital that the state has provided to its two older public university systems, the University of Texas and Texas A&M University.

As a result, UH routinely provides a comparable contribution to Houston and the state as UT and A&M while operating with far less capital than those two institutions, which means that UH provides “more bang for the educational buck” than either UT or A&M.

With the recent expansion of the MD Anderson Library into the centerpiece of the central campus, along with the development of innovative programs such as the Honors College, UH has already become an increasingly attractive choice for Texas students.

Implementation of the master plan is the next logical step in that evolution.

It’s good that the local newspaper is noticing that, but it makes one wonder how much more benefit UH could contribute to Houston and the state if its endowed capital were on par with that of UT or A&M?

That’s a story that needs to be examined, and here’s hoping that the Chronicle eventually tackles it.

Those darn “four-legged fire ants”

feral hog.JPGThis earlier post reported on the emerging market for the meat of feral hogs, which are a fixture of rural (and, increasingly, suburban) Texas.
The Chronicle’s Shannon Tompkins takes the discussion of earlier post several steps further and provides this excellent overview of the feral hog phenomenom in Texas. The battle between humans and hogs is a fascinating story involving a myriad of subjects — including biology, ecology, farming, hunting and game policy — and it appears that the hogs are winning that battle!

Phoenix’s light rail boondoggle

Metrorail car-Houston4.jpgThe dubious economic nature of Houston’s light rail system is a common topic on this blog, so I took interest in this insightful Warren Meyer post that ponders why a light rail system is being built in Warren’s hometown of Phoenix, which is one of the few metro U.S. areas that may be even less conducive to such a system than Houston.
Given the inefficiency and inflexibility of such systems, Warren wonders who supports such boondoggles and suspects that a few powerful businesspeople are using the rail line in an effort to jumpstart the misguided goal of establishing a dominant downtown area in the decentralized Phoenix metro area. Add in a few high-minded environmentalists and many others who are simply ignorant of the enormous cost relative to the benefit of such systems and, as Peter Gordon wryly-noted awhile back:

“It adds up to a winning coalition.”

Unfortunately, as another Phoenix-area resident — Nobel Laureate Ed Prescott — reminded us recently, once such coalitions are successful in establishing a governmental policy subsidizing such boondoggles, it is much more difficult to end the public subsidy of the boondoggle than to start it in the first place.
By the way, Houston Metro’s subsidy of its light rail system has other perverse effects, such as the lack of security for one of the transit options that actually makes sense for the Houston area.

The Houston bowl game that few will see

Texas Bowl 2006.jpgThis NY Sunday Times article does a good job of reporting on Texans’ owner Bob McNair’s efforts to revive Houston’s bowl game, renamed “the Texas Bowl” after being known over the years as the Bluebonnet Bowl, the Astro-Bluebonnet Bowl, the GalleryFurniture.com Bowl and, most recently, the EV1.net Bowl.
Now, if only McNair could persuade the other NFL owners to let most of us watch the game. Sort of silly to have a bowl game that is supposed to promote the city when most people can’t watch it, don’t you think?

The Poston Congressional hearings?

Postons3.jpgThis previous post reported on the strange case of Houston-based lawyer and former sports agent, Carl Poston, who is currently serving a two-year suspension levied by the National Football League Players’ Association from representing any NFL players. I thought the suspension pretty much ended that story, at least until coming across this ESPN.com article:

New York Giants linebacker LaVar Arrington is tentatively scheduled to testify before Congress this week at a hearing involving his former agent.
Arrington, a three-time Pro Bowl player; NFL Players Association general counsel Richard Berthelsen; and a law professor were on a “tentative witness list” e-mailed to The Associated Press on Tuesday by House Judiciary Committee press secretary Terry Shawn. [ . . .]
The Subcommittee on Commercial and Administrative Law has scheduled an oversight hearing for Thursday to examine the NFL Players Association’s arbitration process. Lawmakers will be looking into the NFLPA’s suspension of Arrington’s former agent, Carl Poston, stemming from his handling of a contract the linebacker signed with the Washington Redskins near the end of the 2003 season.

Now, I recognize that a post-election Congress is the Washington, D.C.-equivalent of professional golf’s “silly season,” where members of a lame duck Congress are passing time until the new Congress is sworn in early next year. But still, can’t our elected officials find something more noteworthy on which to hold a Congressional hearing than a relatively small, not-very-well handled contractual matter between two private parties?

Keep those buses handy

Metrorail car120506-Houston.jpgWendell Cox reports on a little problem that occurred in St. Louis recently that ought (but probably won’t) give the Houston Metropolitan Transit Authority pause:

Buses Replace Light Rail in St. Louis
A large ice storm hit the St. Louis area last night and power is out to nearly one-half of the area. The areaís light rail line, Metrolink, has suspended service for much of its alignment and is providing substitute bus service.
Meanwhile, there appears to be no instance of light rail providing replacement for buses anywhere in the metropolitan area — for that matter probably never in history, anywhere. Another demonstration of the flexibility of urban rail.

The enormous cost relative to usage and inflexibility of most rail systems reminds me of something that Peter Gordon observed awhile back about the political forces that support these boondoggles. Some are disingenous promoters seeking to profit from the rail lines, some pose as high-minded environmentalists and many are simply ignorant of the inefficiency and inflexibility of such systems. As Professor Gordon wryly points out:

“It adds up to a winning coalition.”

By the way, Anne Linehan over at blogHouston.net continues to follow another cost of the Houston light rail system that Metro doesn’t much like talking about.

The UH Memorial Service for Ross M. Lence

In a fitting tribute on the final day of classes for the fall semester, the University of Houston will host a memorial service for its late and beloved Professor, Ross M. Lence, at 1:30 p.m., this Friday, December 1 in the AD Bruce Religion Center on the UH campus. Dr. Lence died this past July after a year-long battle with pancreatic cancer.

UH Honors College Dean Ted Estess and several of Ross’ colleagues, former students and friends (including me) will give short remembrances of Ross during the service, which will also include music performed by Honors College students. A reception will follow the service at the Commons of the the Honors College, which is a short walk from the Religion Center. Later that day at 7 p.m., the University of Houston football team will play Southern Mississippi in the Conference USA Championship game at Robertson Stadium on the UH campus, a game that Dr. Lence would not have missed.

Ross Lence was one of the most gifted teachers of our time and a selfless mentor to hundreds of students and colleagues. If you were touched by Ross or simply want to pay tribute to a treasure of our community, then come by the service and reception on Friday afternoon. You will be inspired.

A dream golf round

Pebble Beach Course.jpgSounds as if Jack Kendall, who owns a couple of Lexus dealerships in the Houston area, had the round of a lifetime recently at Pebble Beach Golf Club:

Kendall, 63, . . . made Pebble Beach history when he became the first golfer, amateur or professional, to ace two holes in the same round on the first nine holes of the 86-year-old course. His holes-in-one came on the par-3 5th and 7th holes.

To put this accomplishment in perspective, many very good golfers go a lifetime without ever making a hole in one. To it twice in a round is almost unheard of. To do it twice in a round while playing one of the most revered golf courses in the US? Now, that’s going to be rather difficult to top.