Downtown project taking shape?

houston pavilions.gifThis Nancy Sarnoff/Chronicle article reports that a joint venture between executives in a California-based entertainment development company and a Texas real estate fund has made a $20 million purchase of three blocks of prime downtown land bordered by Main, Polk, Dallas and Caroline streets (near Toyota Center) for the purpose of developing a retail, condominium and office complex modeled after the Denver Pavilions project. The nascent Houston project’s skeletal website is here.
As an aside, things do appear to be picking up in Houston’s east downtown, which includes Minute Maid Park, the George R. Brown Convention Center, the Hilton Americas Convention Center Hotel and the Toyota Center within a few blocks of each other. This Houston Business Journal article reports that a joint venture of Crescent Real Estate Equities Co. has sold the 27 story east downtown building called 5 Houston Center at 1401 McKinney to Wells Real Estate Investment Trust II Inc. for $166 million That price computes to a nifty $286 per square foot, which Crescent claims is a record for such a sale in Houston.

Should have seen this one coming

hmcside01.jpgI have a savvy-investor friend who jokes that he shorts stocks of the company whose CEO is featured on the cover of Forbes magazine each month.
Along those lines, this Wall Street Journal ($) article from February 2004 highlighted the comeback of lavish lifestyles and spending on Wall Street after a period of relative poverty after the bursting of the late 1990’s stock market bubble. The article included this excerpt:

A year ago, Bret Grebow, a 28-year-old who runs hedge fund HMC International, was taking cheap flights on JetBlue Airways and keeping a lid on his spending. But his fund’s investment portfolio surged nearly 40% last year, and Mr. Grebow says he’s confident that the market has regained its footing. So two months ago he bought a new $160,000 Lamborghini Gallardo. He says it was his first “treat” in months.
These days when Mr. Grebow and his girlfriend travel between his Highland Beach, Fla., home and his New York office, he charters a catered plane with a bar, paying as much as $10,000 for the three-hour flight. Last weekend he spent more than $12,000 to fly himself and some friends on a Learjet 55 to the Super Bowl.
“It’s fantastic. They’ve got my favorite cereal, Cookie Crisp, waiting for me, and Jack Daniel’s on ice,” says Mr. Grebow.

Fast forwarding to today, this NY Times article reports the Securities and Exchange Commission filed a lawsuit yesterday in New York accusing Grebow and his HMC cohort Robert Massimi of operating a Ponzi scheme that bilked investors out of more than $5 million without actually trading on their behalf. The SEC press release on the complaint is here.
Is it just me, or is anyone else surprised that investors give large sums of money to a 28 year-old who drives a Lamborghini Gallardo and publicizes that he eats Cookie Crisp cereal while drinking Jack Daniel’s?

The Lord of Regulation is unmasked as a dockside bully

110314spitzer8bsRegular readers of this blog are well-acquainted with my position that New York attorney general Eliot Spitzer’s tactics toward unpopular businesspeople are a grave abuse of justice and the rule of law, and this Wall Street Journal ($) op-ed is pretty darn good evidence that my view of Mr. Spitzer is right on target.

John C. Whitehead, former chairman of Goldman Sachs and current chairman of the Lower Manhattan Development Corp., wrote the op-ed about a Spitzer-initiated telephone conversation between the two men earlier this year. The telephone call was prompted by a previous WSJ op-ed that Whitehead had written in April entitled “Mr. Spitzer Has Gone Too Far” in which Whitehead expressed the following observation about Spitzer’s defamatory public comments about former AIG chairman, Maurice “Hank” Greenberg:

Something has gone seriously awry when a state attorney general can go on television and charge one of America’s best CEOs and most generous philanthropists with fraud before any charges have been brought, before the possible defendant has even had a chance to know what he personally is alleged to have done, and while the investigation is still under way.

According to Whitehead, the day the foregoing op-ed was published, Spitzer called him, and Whitehead describes the conversation as follows:

After asking me one or two questions about where I got my facts, he came right to the point. I was so shocked that I wrote it all down right away so I would be sure to remember it exactly as he said it. This is what he said:

“Mr. Whitehead, it’s now a war between us and you’ve fired the first shot. I will be coming after you. You will pay the price. This is only the beginning and you will pay dearly for what you have done. You will wish you had never written that letter.”

I tried to interrupt to say he was doing to me exactly what he’d been doing to others, but he wouldn’t be interrupted. He went on in the same vein for several more sentences and then abruptly hung up. I was astounded. No one had ever talked to me like that before. It was a little scary.

Although understandable, it’s too bad that Mr. Whitehead was so taken aback by Spitzer’s bullying that he could not respond to Spitzer in a similar manner to the way that Sir Thomas More responded to King Henry VIII’s henchman Thomas Cromwell when Cromwell attempted to use similar tactics on him during a scene in the wonderful movie, A Man for All Seasons. After Cromwell made his threat, Sir Thomas initiated the following exchange between the two men:

Sir Thomas: You threaten like a dockside bully.

Cromwell: How should I threaten?

Sir Thomas: Like a minister of state. With justice.

Cromwell: Oh, justice is what you’re threatened with!

Sir Thomas: Then I am not threatened.

The WSJ has a couple of other interesting items today on Spitzer, including this editorial ($) that disassembles Spitzer’s latest dubious allegations against Greenberg. The piece concludes with this pointed observation:

[T]he question the rest of us should ask is whether Mr. Spitzer’s habit of publicly smearing individuals while bringing no charges in court is appropriate behavior by any prosecutor, much less one running to be New York’s Governor.

But the best of all is this delicious letter to the W$J editor that plays on a point that Ted Frank made earlier this week regarding Spitzer’s inaction in the face of the New York transit workers strike:

Strikes by public employees are prohibited under New York State’s Taylor Law. And New York State has as its chief law enforcement officer Attorney General Elliot Spitzer, a prosecutor of relentless zeal, unlimited resources and possessed of an almost extrasensory ability to detect wrongdoing.

I thought Mr. Spitzer would’ve have thrown Roger Toussaint and the rest of the TWU Local 100 leadership in jail by now.

Maybe he just couldn’t make it in to work this week.

Michael Garrett
Montclair, N.J.