The Woodlands

The Inside Story of Creating a Better Hometown

Roger Galatas, James Barlow

• Publisher: Urban Land Institute
• Year: 2004
• ISBN:
  9780874201871
• Edition: 1
• Topic: Architecture
• Subtopic: Urban Planning & Landscaping

Get a behind-the-scenes look into The Woodlands, an innovative new town that was built from the ground up near Houston, Texas. This is the story of the people who were instrumental in developing it and the experiences and challenges they had in creating a better, "new" hometown.

Part I

THE BEGINNING

The Woodlands, like all master-planned communities, needed large amounts of planning, money, and effort. But above all, it demanded vision. That vision came from one man, George Mitchell. As we shall see in these first few chapters, The Woodlands started as a good real estate investment, not as a desire to build a new kind of town. The plan for what was to become The Woodlands grew slowly, first in Mitchell’s mind, and then through the work of numerous people.

The birth of The Woodlands would not have been possible without support from the federal government in the form of loan guarantees. It would not have succeeded without Mitchell’s determination and willingness to put his considerable fortune, earned in the oil and gas business, behind his vision. The building of The Woodlands did not go smoothly in the early years. It faced every difficulty imaginable, from torrential rains to an international economic downturn brought on by the oil crisis of the 1970s.

Ultimately, the story of The Woodlands would have been a short one, but for the efforts of George Mitchell.

Chapter 1

THE MITCHELL STORY

George Mitchell doesn’t fit the stereotype of the Texas oilman. He looks like a kindly uncle. Age has stooped his tall frame. His hairline has retreated from his scalp. In public, he’s quiet-spoken. Indeed, you sometimes must strain to hear him. But Mitchell does have strongly held views and in private is inclined to state them forcefully. And his former company, Mitchell Energy & Development Corporation, was known as a place where if you wanted to make your point in a business meeting you had better be prepared to shout along with everyone else.

Mitchell’s life has taken many turns, but he has always been a visionary. He understands how things ought to be, and has a picture of how to get there. At the same time, he has recognized the critical need to involve others who possess the special talents he lacks. He is willing to pay for expertise and his recruiting decisions are swift. No lengthy interviews are necessary. While offering encouragement and rewards, Mitchell also does not hesitate to offer a generous but productive amount of advice and direction.

He is not a strategic planner in the formal sense. Mitchell was fond of saying, “The only thing more dangerous than a five-year financial projection is believing it is valid.” Some might say that Mitchell’s distrust of long-range planning led to the near collapse of both Mitchell Energy and The Woodlands Corporation. (The Woodlands real estate development company operated under several different names in its history, but for the purposes of this book, it will be called The Woodlands Corporation.) However, external factors, particularly high interest rates and chaotic energy prices in the 1970s and 1980s, were the real culprits. Mitchell understood the need for budgets and business plans, but he refused to let them stand in the way of unexpected opportunities.

Mitchell eschewed the usual American business focus on quarterly earnings. His eye was on long-term returns. A natural dealmaker, he delighted in driving hard bargains. It wasn’t greed, but the love of the game. I’ve seen him negotiate long and hard to get the maximum return, and then donate much of that gain to charitable or civic causes. Conversations with Mitchell can be exciting adventures for those unaccustomed to his style. He gives everyone credit for knowing as much about any subject as he does. He tends to start in the middle and go forward at a rapid pace. Those on the receiving end of what’s often a Mitchell monologue must listen carefully. He would, on occasion, call me at home. I would answer, say a couple of “OKs” along the way, and then “goodbye.” My wife, Ann, would say, “That must have been Mr. Mitchell.”

In fact, his nighttime phone calls were legendary. Mitchell could be counted on to attend the weekly staff meeting of The Woodlands Corporation, but his favorite method of communication was the telephone. Individual members of the various Mitchell enterprises could expect numerous calls, both at work and at home, in the evening and on weekends. On a good night, Mitchell would make ten to 15 calls. He would often tell several people to do the same, on the theory that if all were working on a problem, at least one would come up with a solution. Mitchell’s employees soon learned to compare notes first thing each morning to make sure that the best-qualified person—rather than several uncoordinated efforts—would address the problem. Occasionally, Mitchell would call someone at home and forget whom he had called or what he wanted to talk about. Mitchell started one phone conversation with the question, “Who is this?” When told, he said, “Sorry, wrong number,” and hung up. It’s not that Mitchell was forgetful. His mind moves at such speed that it frequently outpaces his mouth.

Mitchell generally assumes telephones are made for talking, but on one occasion he listened. During a staff meeting at The Woodlands office in 1986, a call came in for Mitchell from his assistant, Linda Bomke. He took the call and listened without saying a word and then hung up. He returned to the conference table to say the Challenger had exploded. We all sat there in stunned silence and soon adjourned the meeting.

To really understand George Mitchell the businessman, it is important to know his personal history. The son of immigrant parents, he started with nothing and, through education, work, and vision, wound up one of the richest men in America. In 2003, Forbes put his net assets at $1.4 billion.

Mitchell was born in Galveston, Texas, on May 21, 1919, to Mike and Katina Mitchell. That wasn’t the name Mitchell’s father started with. He was born Savvas Paraskevopoulos in the small mountain village of Nestani near Tripolis in Peloponnesus, where he was “the youngest of four children and his legacy was about a quarter of an acre,” George Mitchell said. “And he said, ‘The hell with that.’ In 1901, he emigrated to the United States through Ellis Island and soon got a job with the railroad.”

It was in Utah while laying track that Savvas Paraskevopoulos became Mike Mitchell. George Mitchell over the years has told the story two ways. Since he is the sole source, I will give both of them. When Mitchell’s father went to draw his first paycheck, his name also changed. The paymaster said he couldn’t spell that Greek name.

Either Paraskevopoulos asked the paymaster his name, was told it was Mike Mitchell, and declared from then on that was also his name. Or, in the second version of the story, the paymaster changed the young man’s name to his own.

Mike Mitchell worked for the railroads for four years, then moved to Houston, where he and a partner started a small shoeshine stand and dry cleaning shop. The two made a modest living. Later, the elder Mitchell moved to Galveston and opened the same type of business.

Mike Mitchell was a determined man. He knew what he wanted and went after it. Take his marriage. He saw a picture of a beautiful young woman from Greece in a Tarpon Springs, Florida–based Greek newspaper. So smitten was he that he immediately took a train to Tarpon Springs, met the woman, who had come to America to marry someone else, and persuaded her to marry him instead.

“He was really a very interesting person,” Mitchell said of his father. “He had a lot of perseverance and he had lots of friends in Galveston. He could hardly speak English at all. He not only could not read or write English, he couldn’t read or write Greek. He hadn’t been to school a day in his life. But he had an unusual characteristic of getting along with people.

“He was a hell of a gambler,” Mitchell said. “He loved playing poker. My momma always raised hell with him. We had no money. But he was a determined soul.” Galveston at that time was still recovering from the Great Hurricane of 1900 that killed 5,000 people and devastated the town. Prior to that storm, the city had been the leading business center of Texas. It never regained that status, but instead turned mostly to tourism as an economic mainstay. But over the years, until the 1950s, Galveston was a tourist destination with a difference. While Texas was, and is, a generally conservative state, and then, as now, gambling, prostitution, and other forms of vice were strenuously suppressed, Galveston had them all.

According to legend, they were under the control of the Maceo brothers, Sam and Rose—two barbers who gradually took over Galveston Island’s vice operations. The brothers were connected to the national mob. They ran nightclubs and gambling halls and extended their protection, for a price, to the prostitution operations. Rose was the inside man and operator. Sam was the outside guy, the person who paid off those they needed to look the other way and to interact with the customers. Their most famous operation was the Balinese Room, a nightclub on piers, which stretched from the Galveston seawall into the Gulf of Mexico. It was connected to the land by a long walkway. It was said that the walkway was just long enough that the fastest Texas Ranger running down it during a raid could not arrive before all the drinking and gambling paraphernalia was tucked away. In many ways, Galveston was a great place to grow up in the pre–World War II years. The youngest of three sons and brother to a younger sister, George Mitchell made his summer money catching fish and selling them to local restaurants or to fishermen who had tried their luck and struck out. “Many a time I’d catch a red fish and sell it to a Houstonian for two dollars,” Mitchell recalls. The man “would go to the car where his wife was and say, ‘Look what I caught.’ We’d laugh like hell, but we made good money.”

The Mitchells were an unusual immigrant family because all four of the children went to college. His mother was the disciplinarian in the family. “She was very stern, but she was also very good. She died of a stroke when I was quite young. I was 13 and my sister Maria was 11.” Shortly before her death, his father had been struck by a car and suffered severe leg injuries, so the decision was made to disperse the children among relatives. “I went to live with my mother’s sister and her husband in Galveston. Maria went to live with another sister in Houston. Although my pop couldn’t take care of us, we saw him all the time. That’s the best we could do because Johnny and Christy had already gone off to school.”

Christy, the eldest, went first to what was then Texas A&M College, where he majored in engineering. But after six months, Christy transferred to the University of Texas to study journalism. Johnny also went to A&M but stayed, graduating with a chemical engineering degree in 1936.

Mitchell reports that his mother wanted him to be a doctor, and he had already been accepted into the premed program at what was then Rice Institute in Houston. Mitchell graduated from high school in 1935. His father thought he was too young to go to college at 16, so he spent the following year at Ball High in Galveston, where he took more advanced classes. (He attends reunions of both graduating classes.) In the summer of 1936, Mitchell went to Louisiana to work for his brother Johnny, who had started a small oil and gas production company there. The summer employment derailed Mitchell’s mother’s hopes for her son, the doctor.

“This is what I want to do,” Mitchell remembers thinking after working in the oil fields that summer. “I wanted to be a petroleum engineer and geologist. Rice taught geology but not petroleum engineering. So I decided to go to A&M because it had the best reputation in the country—along with Oklahoma University—in petroleum engineering.” Deciding to go to A&M and actually going were two different things. The country was still mired in the Great Depression. Mitchell’s father made little money. “The first two years were pretty hard,” Mitchell recalls. “I got a little bit from pop. I worked every summer in the oil fields with Johnny, so I was able to survive.” Since Mitchell planned a double major of geology and petroleum engineering and saw no way to graduate in four years with a normal study load, he took 23 hours of classes each semester. He also played on the Aggie tennis team for four years. The biggest obstacle Mitchell faced each month was the $29 due for room and board. If the bill fell more than 45 days in arrears he would be kicked out.

When he faced expulsion for his unpaid bill, Mitchell would send a telegram to his father. “I’d say, ‘Your son is among the top of the class, but I’m going to get thrown out of school because I can’t pay my room and board.’ So pop would take that telegram and go and see Sam Maceo. Sam would give him $100 and pop would send me $50 and keep $50.”

To earn rent money during his first two years at A&M, Mitchell sold candy to fellow students from his dorm room. But he lived in an athletes’ dorm. The football players would raid his candy store and not pay for what they consumed. In his junior year, however, he hit the jackpot. He made arrangements with a San Antonio printing firm to sell personalized stationery to other students, especially lovesick freshmen missing their high school sweethearts. “Those freshmen went crazy, I had a mate in every dormitory. I’d give them part of the commission and I’d keep part. My junior and senior years I was making $300 a month. In fact, when I graduated and went to work for Amoco as a petroleum engineering geologist in south Louisiana my pay was only $155 a month.”

Mitchell graduated first in his class at A&M and was hired by Stanolind Oil and Gas Co., which later became Amoco. That stint lasted about 18 months, until the fall of 1941. Like every student at what was then an all-male, all-military school, Mitchell was commissioned an officer in the Army Reserve. He was called to active duty, sent to the Corps of Engineers, and spent World War II building ammunition plants, air fields, and a manufacturing plant for antiaircraft guns, all in Texas and Louisiana.

So how did Mitchell feel about his stateside duty while many of his generation were overseas fighting? Was he disappointed? “No,” Mitchell replied. “Why the hell would I want to go out and get killed? I was a second lieutenant from A&M in the Corps of Engineers. Ten percent of my classmates were killed and another 10 percent wounded because the second lieutenants were cannon fodder. No question about it. And I knew it.”

Wartime also brought Mitchell a wife, Cynthia Woods. One of twin girls, she was born in New York City, where her father worked in advertising. She came to Texas in 1939 to study at the University of Houston. On Thanksgiving Day 1941, Woods was riding on a train from Houston to College Station, Texas, when she met Lieutenant George Mitchell. They were married two years later, despite the fact that Mitchell wanted to wait until the war was over, afraid that he would leave his new bride a widow. But Cynthia Woods Mitchell prevailed, as she was to do many times in the future, including on the number of children the couple would have. Mitchell is an Episcopalian, Woods a Catholic. They have ten children.

In 1946, a year after the war ended, Mitchell got his discharge from the Army. He had been kept on active duty in order to wind up a number of construction contracts he was supervising. He was offered his old job at Amoco. Indeed, they were anxious to rehire him. But he declined. Others who had been able to stay out of the service during the war were now ahead of him, Mitchell notes. And more to the point, his long-term plan was never to work for someone else.

“I had an old professor named Harold Vance. He was head of the department of petroleum engineering [at A&M]. Harold’s philosophy was if you want to work for an oil company you could drive a Chevrolet, be fine, and have a good life. But if you want to go around in a Cadillac, you better go out on your own.”

When George was discharged from the Army, he made a deal with six investors. “I would work for them to look for oil and gas. They gave me $300 a month, enough to live on, because I was married and had one child and another on the way. Amoco wanted me back, but I said no. I’m going to be a consultant, even though I only had a year and a half of experience.”

Mitchell lured his brother Johnny, who had spent World War II as a combat engineer in Europe and, following his discharge in 1945, had started a small oil exploration company in Galveston, to work with him in Houston. He also tried to get his brother Christy to join the new oil drilling company but was declined. Mitchell described Christy as something of a beachcomber. “I told him he could never make any money in Galveston,” Mitchell said. “He replied, ‘Any damned fool can make a million in Houston. It takes a real genius to make a living in Galveston.’ ”

George and Johnny Mitchell had another partner, Merlyn Christie, who was older, had some royalty income, and could survive on their new company’s modest earnings. They called their company Oil Drilling. George was the inside man, doing geological work and looking for places to drill. They set up their offices in the Esperson Building in downtown Houston. Johnny, and to a lesser extent Christie, would make the deals. Most of that selling occurred in the ground-floor drugstore of the same building, where brokers gathered each day for coffee. In addition to his own company, George Mitchell also worked as an outside consultant to some of Houston’s leading independent oilmen.

“We found a lot of oil and gas,” Mitchell said. “We also drilled a lot of dry holes. If we made oil, we’d run to the bank and borrow a little money [to develop the well]. If it were a dry hole, we’d cry a lot. We used a theory that you don’t go wildcatting—searching for oil where none had been discovered before—all the time. Out of every five wells, only one wildcat [would be drilled]. The rest ought to be semiproven [locations] where you could do a better job of analyzing the geology [and] have a better chance of winning. And we found a lot of oil and gas for all of [the investors]. They made a lot of money and we were making money.”

Over the next few years, Mitchell remembers, as the company’s capital increased, Oil Drilling started investing more of its own money in the wells it drilled. Within five years, the company was financing its own searches for oil and natural gas, finally buying out the investors in earlier deals. Then came the deal that sent Mitchell to the big time. And it was all because of a boo...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• Contents
• Acknowledgments
• Foreword
• The Woodlands Chronology of Development
• The Woodlands Location Map
• Introduction
• Part I: The Beginning
• Part II: Commitment to Develop
• Part III: Building Institutions
• Part IV: Productive Relationships
• Part V: The Woodlands After Mitchell