new challenges along down the road

Bob, Matt and I spent our first working hour together in the Trust for Urban Land's corporate offices in a tower in downtown Atlanta. For what seemed like the thousandth time I told the story: For years now, as Atlanta's economy boomed and jobs were plentiful developers had bought river fronts, hill tops and other desirable locations and made plans to build huge numbers of houses there. An army of investors and community banks had sprung up to profit from and cater to these developers and home builders. Add historically low mortgage rates and no natural boundaries to confine it, the city of Atlanta and its suburbs sprawled like no other. Then the Sub-prime mortgage problems began to infest the larger banks, which led to a full blown credit crisis that all but stopped the economic growth of this, and most other regions - the interdependent banking and home building industry machine that had evolved here began to creak then seize up completely. By January 2009, finance and housing, especially in Georgia were in a state of economic depression. I believed that this confluence of historic events created an unprecedented opportunity to build a company organized to take back the river fronts and hill tops from the development industry and conserve them for posterity. And, it just so happened that the Georgia legislator had passed a law in late 2008 giving tax credits for those who purposefully conserved natural resources - especially water shed maintenance oriented projects as a persistent drought and uncontained growth had added a water crisis to the list of problems with which the region grappled. We imagined that such tax incentives would inspire investors, who were not in the finance or home building businesses to beat a path to our door. All we had to do was perfect a mechanism to identify the development land that had legitimate conservation opportunities and which were owned by investors or banks in the most distress and we should be able to have the wind at our backs to be that change agent. We were boldly proposing to use the circumstances we found ourselves in to build a business, out of whole cloth that would change our corner of the world. Bob Kookenbach was mesmerized. What's more, he was capable of helping us. His company had worked to conserve places like Golden Gate Park and the Okefenokee Swamp and while we didn't anticipate conservation opportunities quite as unique, he easily got the vision that we could turn Atlanta into a model of conservation and perhaps even smart growth. He was delighted by the prospects. I also saw something in the gleam in his eye that I hadn't anticipated. I saw an entrepreneurial spirit in this liberal, tree hugging, environmental bureaucrat. We could use this guy and his experience to give legitimate weight to our process and he could use us to promote their environmental agenda. In the following weeks, I met with Bob, often by myself a half dozen times to pick his brain and to build an interpersonal relationship. In no time, we had collaborated on how to reliably save Belmont Downs and the handful of others that we were now beginning to identify. The credibility of the Trust for Urban Land gave me confidence and I sensed that we were now beginning to get some meaningful traction.

Catching a break

With all of these personal issues swirling around I feel myself even more motivated to get a deal on the books so as to sense the relief that my business plan is actually going to result in income. As Belmont Downs is really the only piece of business that is any where close at hand, the next morning I call Bill B, the President of the bank to see where we are. Again, I'm anxious as I can possibly be dialing his number as I just know that he's going to growl that they're not going to proceed but, yet again he takes my call, is polite and agrees to take a meeting in 2 days. Wanting to pull all of the pieces together even closer, I suggest that we meet at the big accounting firms office, fingers crossed that it will work out with Rick B's schedule. In any event, it gets Bill off of his home court and the accountant's offices are big and beautiful with 180 professionals rushing around I thought that it would lend us some badly needed street credibility. Well, to my surprise and delight everybody agreed but the day of the meeting Bill's office called to say that he'd gone home sick and would have to call into the meeting. This was not as good a deal but what choice did I have. But at the appointed time, we all pulled up into a sleek, glass conference room, got Bill on the phone and proceeded to work toward a deal. We rehashed many of the increasingly familiar process details which I can now articulate easily but with the accountants on the phone I am encouraged that we're not missing anything. Then, what seems like a very important point arrives. Toward the end of the 45 minute call, Bill asks to speak directly to Rick (who he actually knows from a transaction years before) and asks him pointedly if hiring us to solve the huge problem that he has with the non-performing loan on Belmont Downs is what he should do. Rick tells him that "its the only thing he can do and that he is squarely behind these two guys." Encouraged, Bill tells me that he will deal with the developer, Tim and his reluctance to provide us with the information we need and we finish the meeting more confident than ever that we're about to close our first deal. But, significantly - its still not completely decided

A quick eloan cannot save everyone

The day after Christmas I experienced something that, again seemed like a providential nudge. I woke up with the feeling that it was time to act, as opposed to study and think about acting - what I'd been doing virtually since leaving the bank. Intuition told me to take Dallas and not Mark but early as I dared, I called Bill B. the President of First Community Bank that held the note on Belmont Downs and asked him for an appointment to discuss what we had been planning. Tim, the developer had told me terrible stories about this man. Tim, in his defense would think of him as terrible in that his professional life was in the balance as he was in default on a huge loan on which this banker could foreclose anytime he wanted, ruining him. But, we suspected that the bank hadn't foreclosed because the size of the note was so large, relative to their capital base that recognizing such a loss would cripple them. This was something of a Mexican standoff. Bill B was polite on the phone but insisted that I tell him what this was about so, I launched into a summary of 4 months of work like a shaky graduate student at an oral exam. I passed and Dallas and I went to his office that afternoon at 1. Bill B struck an imposing figure. He was 6 feet 8 inches tall and must have weighed 325 lbs, built like a pro tackle. This man was huge, with a deep voice and a disarming directness. He was also preppy, mean and clearly very smart. I would learn later that he had developed a reputation around Atlanta as THE man a Bank Board would bring in to straighten out a poorly run bank. He'd started a half dozen banks himself and was running 3 simultaneously now. But he admitted that Belmont Downs was in the ditch and that, for the life of him he couldn't figure out how to fix it. Our conversation was cordial and he seemed unconvinced but remained open to the possibility that our plan could work. He directed us to go talk with Tim, as he was still the land owner not the bank and make a proposal. We left feeling like we'd gotten a fair hearing, like we'd been well prepared and most important like we had the prospects of an engagement. IF this worked out, it would mean that somebody would actually pay us to help solve their problem and what better test case than this one - the banker that everyone feared/respected. When I got back in my car my hands were shaking. I admit to having been afraid of big Bill but I had been even more afraid of not being bold enough to march into that guy's office and declare that I was smart enough, shrewd enough, skilled enough and tough enough to have stet up my own business to do this for a living. But I had been and it seemed to be working. Once I calmed down, I was elated.

The follow up meeting with Tim didn't go particularly well. He believed that he now knew what we were going to try to do and he had digested the information from an earlier meeting and clearly had been in the marketplace trying to figure out our strategy and implement it himself. He'd even approached Cherokee County about the possibility of creating an easement on his property and selling that easement to them - something they were considering according to Tim. He directed any further inquiries to his lawyer and told us that unless we wanted to give him a purchase contract in roughly the amount of $10 million dollars he was through talking with us. I felt sorry for him as I drove away from that meeting. I knew that he was desperate and days away from financial ruin. Foresters call it "dead on the stump," a tree still standing but already dead. But upon reflection it occurred to me that it was now or never to act and that if we dithered any longer trying to perfect our process we might loose the first real opportunity that we had. Then I got mad. This twerp who had ruined everything that he had touched in the last 5 years was standing in the way of me feeding my family. OK, maybe I wasn't that melodramatic but I knew that only one of us was going to survive this and that I finally felt ready to press for the engagement. But I had to be smart and act quickly. Intuitively, I called Rick, the accountant that my lawyer, Tony T. had introduced me to. I told him that we had the opening to grab this "consulting engagement" to couch it in accountant's vernacular and pressed him to join us in making the case to the Bank, its Board and their investors - an opportunity I bet he wouldn't pass up as it meant exposure to so many wealthy and influential people. He agreed and we decided to arrange another meeting with Bill B. and this time we would ask for the business.

And time goes marching on...

There was something that I felt some urgency to get done before year's end that I hadn't gotten to and really had to apply myself if it was going to happen. I remembered that my old client, Rick S. was in the habit of spending the Christmas holidays at his home in California and I didn't want him to be gone for 2 entire weeks without having touched base with him again, so I made a pilgrimage out to see him at his office. This time, I went especially well prepared. I photocopied a dozen different articles, made complete records of the meetings that I had and even put together a notebook of my thoughts concerning conservation easements. I wanted this to be something of a technical conversation, coalescing all that I'd learned. In retrospect, I might have been using the occasion of meeting with someone I respected to demonstrate my consolidation of all that I'd learned in the past 4 months. In my own mind I passed the test because, even in from of this extremely accomplished real estate magnate, professionally trained accountant I had become a self taught authority on the subject of the tax benefits of conservation and this was saying something as we had generally found few articulate spokespersons for the field. Oh there were lots of lawyers, accountants and ecologists that knew about easements and their effectiveness but we hadn't met anyone who had actually built a business around the concept. Rick acquiescence that we were on just such a track and that the admission that he might be willing to invest in it were two goals that I had for the meeting. I thought that we had both by meeting's end as he agreed to change a appointment that he had made for the day before Christmas eve to join us at a meeting with the only investment banking firm that we could find in Atlanta that made a secondary market in conservation easement tax credits. We adjourned for the weekend confident that he was about to make us an offer to set up an office in his complex, be able to use his company's medical benefit program and maybe even collect a salary - evn if that meant giving up a big percentage of the profits from our own efforts. (OK, I'll admit that we hadn't made a dime yet, but by now we all felt sure that we'd get hired as soon as the new year began - by somebody) I can't entirely explain it but I still felt the need to have an institutional presence around me, despite all of the bad experiences that I had had with banks. I wasn't convinced that I could create a business out of whole cloth that would pay all of the bills just like a parent company would. I was about to get a very abrupt wake up call.

Monday morning of Christmas week - a pretty quiet week traditionally Mark and I met at a now very familiar, Einsteins Bagel shop to go over our presentation material for the investment bankers and my e-mail chimed. I looked at my Blackberry to see that Rick S. had sent me a message that fairly succinctly said that he'd thought about it over the weekend and that he was now unconvinced that our business proposition had sufficient promise for him to devote any more time to it. He wasn't coming to the meeting that morning and he thanked me for offering him the insights that I had but, as of now he was utterly, out. We went on to the meeting, which was inconclusive but encouraging and then went home to begin the Christmas holiday. While I was completely stunned by Rick's position, I was even more surprised by my own response. I was actually relieved. I had almost too much energy invested in seeking his approval for what I was doing and somehow it made me mad that he was being so obtuse. In no time I made my mind up that he was the one that was wrong and that we, I could do this without him or his money. I grew up a little bit that day, having weathered an emotional storm that I hadn't seen coming. I am still amazed at how I relaxed and enjoyed the rest of the week off, after such turbulence.

keeping up with my sanity

By mid-December Mark had begun to wonder out loud about the efficacy of the equestrian piece of the puzzle and his logic gave me still more heartburn. I give credit to Dallas for reaching out to me at just the right time and he inspired me with talk of well heeled investors from the Rolodex that he's built from decades of transporting horses for some of that sports most glamorous participants. He also spoke to my heart with his reverence for the land, his perceptive insights about the people around us and his resourcefulness that he attributes to life on a completely self sustaining ranch. Yet, Mark and I had been together a long time and I had come to trust his business acumen. Its true enough that Mark struggled with an apparent addiction to the pain killers he took to help him through the misery of a marginally functional back, despite remarkable success in our early real estate dealings he'd been responsible for little productivity lately and I knew that he was having marital problems, he was seldom wrong about business things. The model that we were now using was Belmont Downs and at the end of the day it was true, that neither the developer nor the bank absolutely needed to have a horse farm on the property in order for our plan to organize a conservation effort to produce tax credits sufficient to reward investors to come into the transaction and pay off the existing loan. It was also true that four and a half months into trying to tease a business out of the souring economy we both saw Dallas as a formidable net worker and one was a consistent source of encouragement but not much in the way of ideas that got us any closer to making money. It was also true that in this era of virtual businesses, Dallas had other sources of income that seemed to sustain him. Mark and I didn't and we were singularly pouring ourselves into this. Yet, I needed both of these good guys in my midst to keep me psychologically composed and that neither of them Fully shared this predisposition about the other, worried me. But in true Scarlet O'Hara fashion I chose to worry about that tomorrow.

I'd read somewhere that during periods of great stress, exercise was unusually important. I suppose that beyond the ordinary good that exercise did, that of increasing heart rates, enabling weight maintenance and assuring that appetites remained normal, exercise helped in some inexplicable way to keep one sane. Since adolescence, I have skied, played tennis, ran 10Ks and 2 marathons but now I ritually walked 3 miles a day, usually at some absurd hour in the morning. Stress effects everyone differently, for me it robs me of the ability to sleep. So, I was often up at 4:30 or 5am, I might as well use that time wisely and get some exercise. What was accompanying me these days on my predawn regimen was one of my most prized possessions, my I-Pod. Like most teenagers, I collected record albums as a kid and kept up the practice until I was well into adulthood. The most cherished of these recordings, the ones not easily found or rarely heard on the nostalgia stations I had put on CDs and later transferred to my I-Pod. I like to think of it as the complete soundtrack of my life. I not only held in my memory the recollections of trying times long past and obviously endured, I had dozens of albums that bolstered me during those same difficult periods which served as an especially effective reminder of historical events and reminded me that, or how I coped with each phase. As I had begun to deconstruct this as yet another phase in my life, having my music with me was especially comforting, though during the mornings of especially difficult days I might ultimately reject even this most familiar distraction and just take my thoughts with me and I bundle up and trudge on, hopefully toward revelation. This particular year it was the expansive collection of Christmas music that kept my spirits buoyed. While I have the standards that everyone would expect, my collection includes contemplative arrangements of hymns and carols, orchestral works, both contemporary and ancient, elegantly simple works of piano, cello and organ and choral masterworks, some secular but mostly sacred. Again with my wife's full compliance we'd worked to shed the materialistic expectations from our Christmas experience this year leaving us with just family, food, OK - a good bit more wine than usual and this very special music. With all of this and good health in hand, Christmas wasn't simply saved this year, it was priceless and thankfully experienced.

Possibilities of the conservation easement

Even as I slogged toward the Christmas holidays the business bug kept buzzing around. By now, Dallas, Mark and I had a clear idea about the possibilities at Belmont Downs. We were going to propose to Tim and the First Commitment Bank - the bank that held the $10 million dollar, non-performing note but on which they could not foreclose due to the bank's own solvency problems, that they reserve 10% of the property for exclusive home site but put everything else, all 400 residual acres in a conservation easement, give the easement to a land trust and harvest the tax credits and deductions for use by bank investors who had a vested interest in seeing that the bank stay in business. The problem now became, what land trust? There were lots of them chartered in Georgia but was there a perfect one? The answer came, as so many of the big ones had so far: from a remarkable source. Mark and I were eating breakfast together one rainy morning and I was looking at the survey and the appraisal that Jim Rice had given me. Having had some prior experience with appraisers, I decided to call the guy who had done the work on Belmont Downs and go pick his brain. His name was Dennis and he turned out to be an odd but remarkably articulate fountain of information on easements. he volunteered almost immediately that the Trust for Public Land and their local Director, Ken was who we needed. I liked Dennis right off as he had a big sign beside the door to his very cluttered office that read, "Nobody gets to see the Wizard, Not Nobody, not No How." he was the wizard alright. And man, was he right about Ken. The Trust for Public Land is a huge, old land trust that has as its mission "Land for People." And Ken was a disciple of the religion of conservation but he had a can-do attitude that seemed to suggest that he could think in technicolor. He listened carefully to our plans, made a few thoughtful suggestions and gave us every indication that we could count on this land trust to help execute Belmont Downs and perhaps many more. In his office in downtown Atlanta, I saw for the first time that our process could work, it could work in lots of different settings and circumstances and we could make money helping people with broken land deals either using the equestrian facilities idea or not. The outline of an evolving business was emerging right in front of us.

It seems the right time to say that i am a firm believer in a variation of the Protestant work ethic. My theory goes: work hard at something constructive and something good comes from the effort. it might not be the good you intended, but it'll be good never the less. My idea of starting a business to save broken real estate projects, and community banks in the process was picking up momentum and I was beginning to believe it, despite the fact that we had no proof that it would even work outside a couple of exotic examples

real estate team ASSEMBLE!

As if I needed any more motivation to succeed the incentive stock options that I had earned during my career that were worth $500,000 at the start of the year had fallen to a value of less than $50,000 during the first month that I was thinking about what to do with the rest of my life. I had earned an old fashioned pension too but had no idea if that had any value any more. Facing the loss of most of my retirement assets I resolved that I had everything to gain from succeeding. So, on I marched...

My next call was to a tax lawyer with whom I had worked often, Tony. Tony and I are contemporaries, both from North Carolina and our business relationship had always been super. We have even had a few personal/social outings that were fun as well so I felt like he'd give me the straight scoop on what it was that I was trying. After exchanging voice mails for a week, we finally connected and he was encouraging but deferred to an accountant with whom he worked often who had directly relevant experience. Rick B. is the managing partner of a 180 person accounting firm in Atlanta and he called me back promptly. As it turned out, he had a client several years ago who was developing a 200 acre tract on lake Oconee, about 90 miles from Atlanta. The subdivision was a complete bust so, at Rick B.'s direction he put a conservation easement on all but a hand full of acres, went from 200 building lots to 20 and went through the elaborate process of having the state certify the conservation effort so that he could get the tax benefits designed to encourage land conservation. Additionally, he master planned an inexpensive equestrian facility for the easement property to attract land buyers who enjoyed such amenities. As luck would have it, he sold all of his lots (at a much greater price than he was asking originally) and when combined with the tax benefits that ultimately did come - the venture was a roaring success. Now, three years later the whole transaction is being audited by the IRS but they all feel as though their defense is air tight and they will not only prevail but they'll pave the way for folks like us to similarly succeed. Realizing that having a super qualified resource like Rick B. in my corner, I made plans to cultivate his friendship and get him squarely on our team.

In my experience, there is no better way to demonstrate our serious capacity than to introduce Rick B. to the richest guy I knew. That guy was Rick S. I met Richard S. several years ago and had been moderately successful in getting him to move his investment management relationship to me. Rick S. was 63, had grown up in California where he was a practicing accountant - a "good fact" in the grand scheme. He had worked for one of the state's largest audit houses then left to start his own firm. he built that into a regional player in California finance in the 1970's. During this time his wife had bought a dress shop that was struggling financially. he assumed control of it and when they sold "it" 6 or 7 years later they had 240 retail stores on the west coast. In the late '70's Rick S. sold all of his interests and started developing real estate. Well capitalized, he survived the recession of the early 80's and had the foresight to buy lots of property in the then depressed part of north Dallas, Texas. In the mid '80's when the oil patch was beginning to boom he sold his properties without developing a single one! He took his second fortune and bought then depressed real estate in north Atlanta where he built over a thousand homes and 10 million square feet of industrial space.When he and I met he was worth $100 million and looking for the next thing. He liked my idea but needed confirmation. I was willing to bet that Rick B. would be a credible source of such confirmation and would be interested in meeting such a successful prospective client. My hunch was right and they hit it off beautifully. I now had a confederacy with Dallas, Chuck, Tony, and two different Rick's. I was a long way from imagining how to make money at this but it certainly felt as though I was on to something.