Oral History Transcript - John McCrocklin - October 9, 1986
Interview with John McCrocklin
Interviewer: Steve Ramseur
Transcriber: Steve Ramseur
Date of Interview: October 9, 1986
Location: Mr. McCrocklin’s Office, Miller McCrocklin Inc., San Marcos, TX
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Interview with Mr. John McCrocklin October 9, 1986 at his office, Miller McCrocklin Incorporated, right across from the San Marcos Police Station, El Dorado Restaurant, University Savings, and Cancun Fajitas and Seafood Restaurant. Interview will be taking place in Mr. McCrocklin’s personal office.
Steve Ramseur: First of all, let’s go ahead and start with a little bit on your personal background: where were you born, where did you grow up, what schools did you attend?
John McCrocklin: I was born in Kingsville, Texas, in 1953, we moved to San Marcos in 1964 in August. I went through fifth grade in Kingsville, Flato Elementary School. I then went into the San Marcos Public School System and attended the sixth grade at Campus Elementary School, which is now part of the university. I attended San Marcos public schools for junior high and high school, attended Southwest Texas, and graduated 1974.
Ramseur: Okay, now what is your degree?
McCrocklin: It’s a BBA degree with concentration in real estate and insurance.
Ramseur: Okay. Why did you locate in San Marcos; why did your family move here to San Marcos?
McCrocklin: My dad was president of the university. 1964, and he and my mother, Harriett, just decided to stay around.
Ramseur: Okay, great. Do you have any brothers or sisters?
McCrocklin: I have one brother that’s older, four years older, by the name of Jim.
Ramseur: Okay, are you married?
McCrocklin: I’m married, have two girls and a son, and have been married for ten years this year.
Ramseur: Okay, your wife’s name?
McCrocklin: My wife’s name is Carolyn, my son’s name is Clint, he’s the oldest, my daughter, [middle daughter] is Julie, and my youngest daughter is Courtney.
Ramseur: Okay, did you play sports in college?
McCrocklin: I was on an athletic scholarship to play football at Southwest Texas and dropped out for medical reasons.
Ramseur: Did you participate in any other extracurricular activities, i.e., fraternal or anything like that?
McCrocklin: I was a member of Phi Beta Sigma Honorary Fraternity [and the] Tau Kappa Epsilon Social Fraternity. Oh gosh, I can’t remember all the others. I’d have to go back and look. There were several scholastic and then Alpha Kappa Phi Business Fraternity, and you know, several of them like that, so there are quite a few of them like that. Ten years ago, I don’t really remember all of them.
Ramseur: Since you were in the social fraternal part of the university, Tau Kappa Epsilon of Southwest, what was it like as compared to now?
McCrocklin: Well, I think in 1969 through 1971 is when most of the fraternities got their charters from national organizations, and the “Tekes” had just gotten their charter in ‘71, so they were brand new on campus, and there was only like six fraternities that I recall and five or six sororities, there were very few, and it was more of a thing that if you wanted to participate in an intramural type of activity, i.e., sports and social bit, that’s what you had to belong to.
Ramseur: Okay, so there wasn’t a real big percentage of the Southwest population in fraternities then?
McCrocklin: Not at the time.
Ramseur: Okay, did you spend any time in the Armed Services?
McCrocklin: No.
Ramseur: What were your goals while at Southwest Texas?
McCrocklin: My goal was to get out of school as quickly as possible with a degree.
Ramseur: Okay, I hear that.
McCrocklin: I needed 128 hours to graduate, and I had 128 hours when I graduated. I didn’t mess around with anything that I didn’t need and tried to get most of the courses that I needed out quickly, and I got my real estate license in 1972, and I was the youngest broker associated with the National Association of Realtors when I got my broker’s license, and I worked fifty to fifty-five hours a week in addition to carrying sixteen to eighteen hours a semester.
Ramseur: Did you work here? [McCrocklin and Associates]
McCrocklin: Yes.
Ramseur: For your father?
McCrocklin: Well, my dad and I started the company in 1972. Actually, when I got my license, he was in partnership with a woman in Wimberley by the name of Mary Bibb, and we had not even opened this office at that time. We opened this office in 1973, which is a year after he and I split off from the other partnership that he was involved in and formed a corporation, and my brother was still in the service at that time; he got out of the military in October ‘75 and came back full-time.
Ramseur: So the office started essentially in Wimberley?
McCrocklin: We started our first office in Wimberley. We actually corporated, I guess, late in ‘72 and moved into a different location early in ’73, and then we opened here about September ’73, and then we opened in Austin in ‘74 and in Dripping Springs in ‘74, and then I branched out with commercial consulting offices in Phoenix and Los Angeles in 1982 and ‘83.
Ramseur: I take it that all of these still stand?
McCrocklin: Yes.
Ramseur: I got my real estate license last year, I was curious, what was the real estate law on licensing when you received your licenses?
McCrocklin: When I received my salesman’s license, you had to have thirty hours within the first year of having taken the state exam; there was no prior requirement.
Ramseur: You could just go in and take the state exam?
McCrocklin: You just signed up, filled your application out; before you had your first renewal, you had to have thirty hours. Before you could get your broker’s license, you had to work as an active salesman for one year. The test structure was totally different; it was an essay-type of exam book then, with a closing statement.
Ramseur: Even on the agent’s test?
McCrocklin: No, on the broker’s test. The broker’s test was probably eighty subjective questions. No, I take it back; eighty objective questions and then five essay questions and closing statement, and that was 60% of your exam. If you bombed that, you bombed the whole thing.
Ramseur: So it’s not broken down like it is currently into the four-part structure?
McCrocklin: No.
Ramseur: For the sake of future people who might look back on this, can you tell me a little bit about what the laws are for right now for real estate license, agents, and brokers?
McCrocklin: Now you have to have 270 class room hours before you take the salesman’s exam, and for brokers, you have to have 540 classroom hours of education.
Ramseur: Okay, do you think those are going to be pretty steady?
McCrocklin: Yes.
Ramseur: Are they going to raise them again like they did?
McCrocklin: I think 540 will probably be the standard for a while, as that is quite a bit.
Ramseur: Okay, now we’re moving on further into the real estate-aspect [of the] discussion. How do you think the new tax bill is going to affect the real estate market?
McCrocklin: I think it’s going to have a lot of negative effects on the economy; the problem is that each three- to five-year period we go through a new tax bill, and with that they change the rules every time that we start playing by the rules. And in 1981, when the economy was so rough, they came back [and] said, All right, everyone play by the rules of the Economic Recovery Act of ’81. And business spending increased as a percentage of the gross national product by over 78%, which was record levels, and it turned the recession around two years ahead of schedule. And now what they are saying is, For all of you guys that played by those rules in ‘81 that pulled the economy out of a problem, now we’re saying that the grandfather period is not going to be what you want; we’re going to hammer you. Where you may have been on a fifteen-year depreciation or cost-recovery schedule, if you’re in the sixth year of your schedule and it’s residential property, you are going to subtract six years from 27.5 year[s], which is why you start over again, and so, you know, when you projected all your financial figures off of one schedule and then six years into it, you have to change; it has a detrimental effect. And over all, income-producing property has decreased to a point where rents will have to increase to 21.5% to stay at the same values they are today. In other words, like if you can’t write off as much depreciation as you have been writing off, the only way to keep the same future value is to raise the rent because what you are doing, you are capitalizing the future income of a property, and when you pull half of the tax advantage out of what you have calculated now as you are in it and then you take interest, you are limited to the amount of interest that you can write off now; you have to have more income to offset the debts. So, if you have, say, the first $1000’s worth of interest and you only have a $100,000 worth of income, you can only write $100,000 of your loss off. Now, this is just applied real estate; think of all the doctors and lawyers and other people that have cash accounting systems. If they suffer [a] $25,000 loss, they can write it off. But, in real estate we are being penalized because that has been “the, oh, I don’t know.”
Ramseur: Kind of the dumping ground of the big money.
McCrocklin: Well, not a dumping ground, but it has probably been abused by some people, the tax advantages, and now they are saying, Even if you play by the rules, and really, your likelihood is derived off of it, we don’t really care; we’re going to stricken everybody with the same rules.
What’s going to happen: construction is going to slow down; as construction slows down, unemployment is going to rise; as unemployment rises, purchasing power is going to decrease; and the overall economy is going to be in worse shape than it currently is. They say that capital gains taxes—since there will be no long-term capital gains are going to go up slightly to 28%. If you’re in a higher bracket, it could be as [high as] 33% at the ordinary income tax rate because there is a 5% surcharge on higher rate. Although, they are trying to limit it next year to 28%, but that’s not been done; it will actually be 38.5%. They’re also talking about, oh, you’ll probably see the absorption of most vacant buildings strengthen because there will be very few deals done now until the market straightens out, so that’s positive, but, you know, as a whole, I can see some positive, but I see more negative than I see positive.
Ramseur: Are there a lot of dollars that come into San Marcos from outside sources because of tax benefits, and do you think that will affect us?
McCrocklin: I think probably the last four apartment complexes you saw built here was built off of tax dollars; they weren’t built off the market.
Ramseur: Could you name those apartments?
McCrocklin: Hill Country Apartments; the ones out here off of West Field Avenue that Nash Phillips/Copus, Inc., and NHP put in there—I can’t think of the name; Clarewood Apartments, they’re going up right now; and the ones off of River Road that NPA put up also. Those were predominately done for tax write-offs, not for market competition, because there is still a high number of vacancies in town, and if the R41B, the appraisal required by the Federal Home [Loan] Bank Board, which is an absorption and feasibility study, you cannot make the numbers, you know, churm(??), whereas in 1979, we didn’t have any vacancies anywhere in town. There’s probably a cumulative total, probably three hundred or four hundred apartments sitting empty, and we’ve got more on the way.
Ramseur: When did the apartment building spark in San Marcos, and what led to the birth?
McCrocklin: Pent-up demand. It was kind of a false or pseudo-market. Or what happened in 1984, in September, there was a sewer moratorium instituted by the City of San Marcos because we didn’t have any more capacity to handle sewer and we were under suit by the Texas Water Commission to get our resources or get our act together, and what happened during that period of time there was a moratorium, and they let or sold 2,800 LUEs [living unit equivalents], all right, and if you wanted in this raffle where they wanted to put up 2,800 in the bingo game and drew numbers or lots for them, you had to pay $500 to go into that, per LUE.
Ramseur: Just the opportunity to draw numbers?
McCrocklin: Just to draw a number, and then there was a $2,000 per LUE charge, so you ended up paying $2,500 per LUE per apartment on 100-unit apartment complex that’s $250,000. Well, what happened, everybody jumped in and bought all these LUEs and started planning all these different projects so that when the sewer came back on line, that you know, there would be apartment construction. The problem is what normally happens is that a guy does a development you go ahead and do, you don’t have to wait, and if someone else starts something you see it physically, and you see how the absorption is being handled on the market. Well, what happened in ’84, you had six different developers all planning projects that weren’t cognizant of the other guy, which would have been readily, or you know, you would have been able to eye the construction and various stages had that moratorium not been in existence. So what’s happened, everything hit the market, and last September we had the biggest glut that we’ve ever seen, and we’re still not over it.
Ramseur: Just in apartment buildings, or is that in housing?
McCrocklin: No, not in housing. Basically in apartments, then it’s followed in the retail and were somewhat over built in office. Retail is getting that way. Residential housing in the $75,000–100,000 price range can’t keep decent homes on the market; above $100,000, we’ve got more than we can handle.
Ramseur: Was there anyone—I heard that LBJ’s in making Southwest University a university sparked growth in San Marcos; has Southwest Texas, has its growth affected San Marcos apartment dwellings directly?
McCrocklin: Oh yeah, I mean, you know, you look at it from when I started school here, there were probably about 7,500 students, and now there is almost 20,000. There was 19,9-something at the beginning of this semester, and that’s about a 15-year period. That’s one thousand students on the average per year, almost.
Ramseur: That’s astronomical growth.
McCrocklin: That is coming in here, yes. He was directly responsible for putting the university on the map; [he] signed the high education bill here and did all kinds of things that were related to putting San Marcos on the map and changing the image from the teacher’s college to the school of business, now the eighth-largest school of business in the United States.
Ramseur: That’s exactly what I was looking for. So do you feel that San Marcos housing is not over built-up to $100,000?
McCrocklin: No, in fact we went through a period from ‘74–‘79 where most of the growth was occurring outside the city. City Hall has always been difficult to work with, and most of the offers went outside, and that’s why you’ve got Laurel Estates, Willow Creek, Siesta Verde, The Settlement, and Country Estates, Hunter’s Glen, you can just keep naming them. All of them have gone around the city and because there were an average of thirty houses a year constructed inside the city limits of San Marcos, and we are larger than New Braunfels or Seguin, and when you look back at that, the figures in Seguin, they were building fifteen to twenty houses per year inside the city than San Marcos was with [a] six thousand less population, and New Braunfels was doing sixty to ninety houses a year, which was double to triple to what we were, and there were three or four thousand under what total population was, excluding the students. I mean that is lucrative, and City Hall says we haven’t fought growth, and I can show you ordinances after ordinances that have been instituted that has directly affected growth that’s come out of Austin, and it’s costly, and now it’s getting even more costly to do development, and they have absolutely priced the low-income wage-earner out of ever even potentially owning a home because in recovery fees and site development fees alone, a year and a half ago, before we got them to make some changes, the actual cost of any lot was $7,800.
Ramseur: Would you say, as a whole, the city of San Marcos’s anti-growth, the City Council under the current administration?
McCrocklin: That’s probably fighting words, but.
Ramseur: Loaded questions?
McCrocklin: Well, no, it’s not a loaded question, it’s the truth. I mean, you know, we’ve got a bunch of absolute idiots on City Council. I don’t mind telling them that to their face. We’ve a guy by the name of [name redacted] that’s a school teacher, and he’s absolutely ignorant of what the real business world does; he teaches civics, and he’s caught up in his own world. [Name redacted], who works at the university, Wife and he are worth millions of dollars. They pump more than twenty-seven million cubic feet of gas per month, and that’s on record at the Texas Railroad Commission, and he acts like he is just a little neighborhood advocate and does all of his dirty work out of town and acts like every developer in the city of San Marcos is a lowlife, which I personally find a conflict to begin with, and then his secretary up until recently was the City Attorney’s wife, which is a conflict of interest in my opinion, and then you look at another who’s come around within the last year and starting to make some strides. You know, there is a lot wrong that is going on. We’re paying too much, doing too much. We need to get rid of the City Manager, and he’s right, and Mayor Younger has kind of walked into the hot seat, and if we hadn’t got rid of Mayor Emmie Craddock, we’d really be up the creek. Councilman [name redacted] doesn’t know that much, he’s not that intelligent on business deals; he’s kind of, you know, he thinks everything is a toy. There’s no seriousness to it. Another councilman doesn’t even read the contracts the city signs. I’m not telling you any secrets; go down there and watch them. They recently approved a contract to purchase the Elim Water System south of town for $335,000. They have personally indemnified the owner of that system from any lawsuits, and in the purchase they are not even sure that they got the territorial rights or the CCN [Certificate of Convenience and Necessity] for the area that they purchased the waterworks for, and it’s not fire-rated pipe, it’s not state-approved, and, you know, their water rates are five times what the City of San Marcos water rates are, and A.C. Gonzales had called five of the members of the council who all voted for this, and yet they’re paying taxpayers’ money for this. They don’t know what they bought; they voted on it, they signed the contract, and we’re indemnifying somebody against something that we don’t even know what lawsuits that we’re going to buy off, and they’ve got seven employees on a system that’s half the size of Maxwell Water Works System, which has two employees, and in order to terminate any of those seven, there’s a six-month severance pay agreement. I mean that’s just a waste, total waste.
Ramseur: Is that water supply you were talking about for the MUD [metropolitan utilities district], that’s going for the city of San Marcos?
McCrocklin: No, it’s the City of San Marcos that’s buying it in order to stretch their fingertips. If you have a water system, then you can extend your city limits in that area without going over the amount that’s limited by the state for territorial annexation annually. If you are servicing that area’s utilities, then you can stick your fingers out without the statutory limitations.
Ramseur: So you go utilities first, and then you follow that out?
McCrocklin: You can follow that out, or you can follow a certain number of square miles without getting into trouble. So, what they’re doing is simply to get their finger tips and extending their ETJ [extraterritorial jurisdiction] in and around San Marcos and their tax base. But what’s the benefit? If it’s not fire-rated pipe, if it’s not going to benefit the people that are out there except to make them pay taxes, is that fair to those people? Not in my book.
Ramseur: Is that what they are doing, driving for the tax base? Speaking of the subdivisions that went in earlier, looking from the historical end of it, near future, near history, were they MUDs? Did they go in as municipal utility districts?
McCrocklin: No, there has never been a municipal utility district in San Marcos. There have [been] two approved, or actually three approved: San Marcos MUDs One, Two and Three. Two of them are approved for Storm Development Corporation, which has proposed the River Gate development that is north of town here. One of them was proposed by McLester Grissom and Gardner for a woman by the name of Harriet Sproull. None of those MUDs have been funded, and I doubt that they will be funded under the new tax structure because there won’t be any tax advantages to investing in municipal bonds. Although there was a separate tax immunity for revenue bonds, they are going to be a lot more difficult to get your hands on and procure under the new tax structure. There’s been one proposed south of town. Most towns grow north and west. I would say you’re looking for north of town to explode because we are already tied to Austin as it is. We’re nineteen miles from Yarrington Road to Ben White Boulevard; as you look at that, you know, you’re right in the heart of town, you’ve twelve miles from the city limits.
Ramseur: On the same type of issue, what are the possibilities for a loop around San Marcos and also an international airport going in this area?
McCrocklin: Well, there is a proposed loop that supposedly has all but a small portion of right-of-way dedicated from Interstate 35 West, you know, back over across Ranch Road 12 north of town then comes around south and comes out about where McCarty Lane would be and connects, and they supposedly have the funding for that, but, I’m kind of a, show me, I guess I’m from Missouri today: show me and I’ll believe it. But evidently they’re trying to get it qualified as a state highway, and the funding is there for a state highway, but we’re talking $20 million. Even with the dedication of the right-of-way, things are going to cost more than that.
Ramseur: Are people getting excited in San Marcos that have land around in that area, has it driven land prices up yet, and do you think it will?
McCrocklin: Well, if somebody is buying on the come(??) that the loop is going to be there, they are foolish. I mean, a shrewd developer never buys anything he can’t develop. That’s what happened along the interstate when everybody started speculating land, the ones that got caught with their pants down were those that bought at prices they knew they couldn’t develop at. We never bought anything that we couldn’t develop, you know, a marketable price of property for; in other words, like, we bought land in ‘72 for $800 an acre along the interstate or $1,000 an acre, sold it and take it back and lower our bases to $800 an acre, sold it again for $12,500 an acre, bought back in at $20,000 and had contracts for all three at $25,000–30,000, but we’ve been able to go back in and develop it into like a business park, you know, you see here are competitive to a $1.45 to $1.95 a square foot with concrete streets, twelve-inch water lines, three phases electricity, regional detention and IH-35 exposure, and the Butler Joint Venture with Norwood Properties is $3.25 and $7.50 a square foot, so when you’re one-third the total price, you can always be competitive, but if we paid $30,000–40,000 an acre, it would have driven our prices up to where it wouldn’t have been affordable.
Ramseur: While we are on the subject, what are the McCrocklin developments around San Marcos?
McCrocklin: Currently, we’ve got the Champions Business Park going in on Interstate 35, which is a fifty-nine-acre mixed-use development for RD [research and development], light industrial office, retail, and you name it. We’ve got a new subdivision in Wimberley by the name of Mount Crest, which is a 138-acre subdivision, strictly residential. We’ve developed Springwood [and] Oak Springs subdivisions. We’ve developed River Oaks subdivision, each one of those ranges from two hundred to eight hundred acres. We’ve done sixty-five condominium units here in town under two different names: one Casa La Mancha and one under Windy Hill Plaza apartments. One was thirty-three units, and one was thirty-two units. We’ve the office building here, which houses our insurance company and our travel agency and the real estate company. We’ve done the Promenade Shopping Center in Dripping Springs recently, which is 12,500 square feet. We’ve done the County Line Business Park off of US Highway 290 in Austin, which is 32,412 square feet of tilt wall construction. We’ve done the Y Center, which is another 1,200 square foot retail center in Wimberley. We did the Wimberley North and the Wimberley North Too shopping centers. We planned a 21,000 square foot office building in Austin that we backed off of because of the market, at the time we hit, we’re doing, just got approval for 187,000 square feet of RD-type research office space off of 620 in Austin. We’re planning a new motel, just been approved, whether we want to go Quality Inn or Best Western, for a 102-unit motel complex; hopefully we will be breaking ground between now and the end of the year.
Ramseur: I had no idea.
McCrocklin: That’s a few of them, but it just depends on what you want. Each year, we’ve tried to keep a mix in the market so we don’t get caught in one particular area. The thing that you want, or I find around San Marcos, is I was trying to avoid developing as much inside the city because it’s just too dang costly. When you find that your development costs here are the same as in Austin and you look at the economic benefits of what you can sell a property for, you will be able to get more in Austin simply because of the demographics that you are dealing with, with population, disposable income. So why should we risk ourselves with a higher risk factor really for the same cost here versus going to Austin? And so, you know, you’ll find it’s more in and around Austin going north of here than inside the city limits where we [have got to] mess around with the city. I built four condominiums units; they were certified as condominiums by the city’s legal department. They have now come back and declared that all of them are townhouses, and before a building permit for a townhouse complex can be issued, they say I have to replace everything and I have to rezone everything after they just made me change the Land Use Amendment for the condominium use in January of this year, and so what I’m looking at, I’ve lost a sale on the fifth unit, and this was after tearing a three-story house down, and I’ve been building these one at a time, you know, over a three- or four-year period, you know. I don’t have a lot of hope for them. I’m trying to do sorority house here in town, and if I do that, that’s the last piece of spec property that I’ve got.
Ramseur: Which sorority?
McCrocklin: I can’t identify that. But, there’s a lot that you could do here, but, you know, City Hall takes the attitude for some reason that developers, and I consider myself a developer as well as a real estate agent, or they don’t know what they are doing, and they are out to rape the public, and that’s not the case because what they don’t understand is with each ordinance that they institute or pass, we’re simply going to pass the cost on. Do you think that I’m going to work on any less profit margin than I’m working on now? Who suffers? It’s John Q. Public, and they have not figured that out.
Ramseur: Since we are on the topic of developers, how has the introduction of NPC, Sharpfe Homes, that type of large-scale developer hit San Marcos; how has that affected your business?
McCrocklin: Basically, I’d rather say that there has not been a large-scale developer that has hit San Marcos per se. What you are going to find is that your big companies like NPC have done residential apartment units or they’ve done commercial developments; they’ve not done any large-scale home building as they have been noted for in other large municipal areas, and I think your impact with Sharpfe of ninety houses a year is not considered to be large enough to have an impact. What you’re going to find is that if the River Gate development that Storm Properties has proposed, which is 1,388 acres, it is supposed to be over 2,000–3,000 residential living units, which you know, really could be as much as 6,000–10,000 people, with a golf course plus retail area, is funded for development. The proposed loop goes right through their area. They’ve dedicated right-of-way if the loop if it is built—those are the areas that are going to impact San Marcos. There is another thousand acres under contract right now by another developer. It’s under contract for $13 million, and they are supposed to be funding a $45 million loan, and it’s located 1.75 miles north of the Blanco river, and if that goes in, it is going to definitely impact what San Marcos is used to, and they’ll become more of a Round Rock, but you’ve not seen that occur yet. There are no U.S. homes, there’s no Gemcraft, and most of the developments that have been available have been more east of the interstate than north and west, and Hill Country and the trees is what people desire, and you’ve got some areas that have been developed that have already been approved that the new ordinances will not affect.
Ramseur: Are people, investors that look to San Marcos, are they looking at San Marcos as the combination of Austin trying into the computer aspect, or are they looking at people buying their homes that work here in San Marcos, or mainly people commuting back and forth from San Antonio and Austin?
McCrocklin: Well, we’re part of Austin SMSA [metropolitan statistical area]. Okay, when you are part of the Austin SMSA, I think it’s over 85% of your total work force normally works outside the community. In the larger metropolitan area that statistically you’re included with, and because Williamson, Travis and Hays Counties are joined together, then the case the majority of your workers work in Austin, and so you’re going to have housing provided for those people and you’re going to draw the people out. Growth has grown so far north thru Round Rock, Cedar Park and Leander, and the congestion is so great on east-west arteries, like 183 and Ben White, [that] they can’t go any further north than they are already going; it’s going to drive it south. Right now, from our mile marker or city limit sign, Austin City Limit sign, twelve miles if you drive toward city limits, that’s how far apart they are, and when you drive from San Marcos to the area we are talking about, you’re nineteen to twenty-one miles to the Colorado River. I mean, very little traffic, and Round Rock coming down [is] just totally congested, and they’ve already funded Interstate 35 from Austin to San Marcos being extended to three-lane bidirectional, so you know that is going to alleviate a lot of problems.
Ramseur: What about the possibility of an international airport; is that realistic, or since we are so close to Austin, is that unrealistic?
McCrocklin: Well, Austin is going to move their airport, but the problem is, you know, it goes down to the same old game in any development: it’s called politics. Everybody tried to use inside information. Look what happened to all who tried to get it out to Manor after they had acquired all the land up there: the voters voted it down. They didn’t want to go to Manor. Logically, you know, being in San Marcos would be no further out than Dallas-Fort Worth airport is to Dallas and Fort Worth, and I think the day is going to come. Now, whether logic has anything to do with it, nine times out of ten it doesn’t, and although it’s logical to put it mid-form, although it would be a boom for our economy, don’t count on it; although, I’d like to see it.
Ramseur: The San Antonio-Austin corridor: has that been blown up, over-emphasized, or is there really the growth?
McCrocklin: It’s been blown up, and as far as height is concerned, everybody that bought property along Interstate 35 and planned a project, and there are people that specialize in going out and drawing development plans and getting it approved through the city because they are good for two years. For like in Austin, a development permit is good for two years before you have to refile it; [it] takes two years to go through the process so you know you are saying, you start, and in twenty-one to twenty-four months, you get site development approval, and if you roll it within the next two years, you know you’ve got something to sell, but what you are going to find is that most of what has been created around San Marcos has been high.
You [have] got real estate companies from Austin saying, Well, I’m planning this project here, I’m announcing this project here, [and] we’re breaking dirt. And they’ve done that over the last three years, and we’ve seen nothing of what supposedly was coming, it’s all been high. But now you are seeing real users in the market; the speculators are gone, the guys that were paying $30,000– 35,000 on the average per acre have been foreclosed on or in the process of being foreclosed on for nonpayment because they have not been able to sell it to somebody, and the users are now after it. Wal-Mart is looking real hard at us. There was a person here in town that made a call to them Monday [and] offered them 100 acres with utilities [and] with rail state highway frontage for $4,000 an acre, and [that] is better than anything they have seen anywhere they’ve looked at, and that could be 650 jobs in our market.
Ramseur: Is this a location for headquarters or distribution center?
McCrocklin: Distribution center. We’re talking with, or I’m dealing with Fortune 1000 Company on my business park, and they’re supposed to let us know in ten days, you know, what they are going to do. They want 8–10 acres, 100,000 square feet of facility, 315 employees, probably $6.2 million worth of construction costs. We’re talking to a bakery who wants a five-acre plant site. We’re talking to all kinds of people, but the people that we are dealing with aren’t speculators any more.
Ramseur: It’s real money.
McCrocklin: They’re real live people, and whereas the last three years, we’ve heard nothing but the bullshit of the guy[s] that consider themselves developers but are nothing more than high farters; that’s all we’ve heard, strictly B.S. Now we’re down to the real brass tacks of the Norwood/Fortune Five Hundred Butler development, River Ridge, a $140 million, and I think it’s overpriced, but, you know, again, prices can come down to adjust to the market. The main thing [is] the infrastructures will be there, the facilities will be there, and if we get two or three of these companies in here that are looking at us right now, we’re going to be dynamite.
Ramseur: Okay, I found these two articles, and I wanted your opinion on are they part of the height, or is it some of this real money coming into San Marcos? I don’t expect you to read the whole thing; I highlighted a couple of the figures. What do you think of those numbers?
McCrocklin: Well, basically, let’s talk about Japan first off, if you’re not familiar with the Maquila system, [which] is a system where plants can locate in foreign trade zones and pass duty-free with one product going into a different product. For example: There are foreign trade zones set up in Mexico where General Motors, for instance, got 1.5 million square feet under roof. All right, they assemble parts in Mexico that U.S. plants could not assemble as cost effectively. Say, for instance, Delco. Because the unions could not produce a radio cost effectively at their plant, so they go to Mexico, the labor down there is cheaper. It’s just as good if not better, labor, right; they assemble the parts and the product, cause of the cost of the materials and the labor in Mexico, produce a radio and ship it duty-free, which is a saving. It’s called “in bond;” they ship it across the border. It’s assembled in an automobile in the U.S., all right. Rather than being taxed at 10.8% coming back in, it’s taxed [at] the same rate that the car is taxed at 2.9%, so it allowed the cost of the product to be produced more economically, which is good for the manufacturer and good for the economy. And there are fifty-seven plants that have located with twin plants, meaning something produced in Mexico cheaply, brought across in a foreign trade zone from Mexico into the United States, assembled, and taxed at a more effectively rate on a product that [had] been produced more competitively.
All right, the Japanese are looking very hard at the Monterey area [of] Mexico because of their technical support from the Monterey educational facilities. If you look at Monterey’s, strategically located to Laredo, straight up Interstate 35 is the corridor between Austin and San Antonio. We’re having numerous inquiries because of Cisnero is pushing the corridor and bringing those people and plants, and you are going to find that is a real, real viable commodity, and I say that more because I’ve been dealing with Maquila consultants in Brownsville that relay that information to me and for the U.S. people, say, they don’t even know what is going on. So, yeah, that’s real viable, and they’ve been through here, the problem is, and I’m not being a male chauvinist when I say this: the problem in dealing with the Japanese, Chinese, or whoever, they are a male society, and a male is the dominant force and where we screwed up is letting the female mayors, and we had three or four of them at one time in [the] corridor, respond and handle these people when they were here making stupid, stupid, and I hate to use that word but that’s just what they were, business gestures that should never have been done, you know what I mean, making jokes about taking pictures together with the heads of the Japanese companies in Sanawa, hope Mrs. Tonaka doesn’t see this picture. I mean you know, stupid type of remarks to make when they are very businesslike, and if the sense of humor is not there on the areas that our mayor were joking with them about, and they set us back.
Ramseur: So, in other words, the Japanese came in earlier?
McCrocklin: Oh, they’ve been in here on tours of the area. I’ve personally handled three delegations that have been in here in the corridor. One of them was through the corridor council that set up a train stop, and then there have been two private concerns that have been in here. So, you have to be very critical and cognizant of what other life styles are, you know, and as far as the explosive growth, yeah, we’ve seen explosive growth. That’s why you know, as far as the capacity of water and sewage has run out, we just can’t keep up anymore.
Ramseur: Okay, on the capacity of water and sewage, how is San Marcos growing northeast growing over the aquifer, and can the aquifer support future growth?
McCrocklin: I won’t even respond to that because show me an accurate map of the aquifer and where it is.
Ramseur: Okay.
McCrocklin: I mean, we’ve got a group at the university whose research department says it’s one place, we got the health department that says it’s somewhere else, we’ve got the Edwards Underground Aquifer Council in Austin that says it’s somewhere else, and I’m sick and tired of all the ordinances created to protect something that we can’t even decide where it’s at. San Marcos funded a study to determine the bounds of the aquifer, and they assimilated these other people’s data, and they’re relying on other people’s work to complete something in a year that should take three to five years to do. We can’t rely on other people’s work and field notes or description on something that critical—that’s cutting corners, you don’t do that. The other thing is, the things that our environment engineers, I like to call “Hay Bale Inspectors” because that’s about all they are good for, and don’t get me wrong, I’m as protective of our environment. What people don’t understand, as a developer, I’m more sensitive because if we screw it up, we’ve screwed our pocketbook up. But, the cities, like Jenkins here at City Hall, want to use totally dissolved solids [TDS] as a removal criteria. In other words, they say you have to remove all totally dissolved solids from any run-off. Well, let me give you a description of what removing totally dissolved solids is like. Those particles are ionized, and it would be easier to make drinking water out of sea water than to remove the TDS out of the water. You know, if it runs across a field that has been fertilized with nitrogen or whatever, it’s impossible, and it’s been a proved fact, and I can show you hydrologists that have gone to Austin and done studies, and even Austin’s own studies will show the areas and filtration systems that was set up at Barton Creek below the mall that failed over 78% of the time, and they’ve ended up polluting the aquifer of Barton Creek more than would have been done than if they had nothing, and that’s what I’m real harsh about, but you know they’re creating one here. San Marcos tried to pass a river corridor ordinance.
Ramseur: No building along certain distances of the river?
McCrocklin: Yeah, at one point, they had it would have taken fifty-five hydrologists to monitor those stations. It would have cost San Marcos a $.5 million to monitor those 13 projected stations a year. Give me a break, we can’t handle that. We have to take what we can live with and operate with and be sensible about it and quit trying to win all of these awards that don’t mean anything other than costing the tax payers’ money and costing the community the competitiveness that we need to grow. And I’m just telling you, I love San Marcos for what it is. It’s not going to stay the same, and we can fall into the same trap that Jeff Friedman led Austin into. If we ignore the problems that exist today on infrastructure, water, wastewater, whatever and try to impose ordinance after ordinance of restricted type of development controls, it’ll go away; it’s not going to go away, that’s why Austin had to pass $110 million bond election last year, they’ve had to pass another $120 million this year, they had another one come up all because of Jeff Friedman and what the guys ignored in the seventies. That’s exactly what we’re driving ourselves into here. We have purchased an electrical system which, I think we needed it, but not to let our city manager get his hands on it.
Ramseur: LCRA [Lower Colorado River Authority]?
McCrocklin: LCRA is the most competitive power in the state. Our city manager has done the same thing to us that [Austin’s city manager had] done to the City of Austin. The City of Austin arranged 50.1% of a $999 million budget off of the power company, so there goes our competitive rate.
Ramseur: What do you feel San Marcos has to offer an investor coming into San Marcos? Why would someone locate in San Marcos and put their money into the area of San Marcos?
McCrocklin: As far as what?
Ramseur: As far as investing in real estate?
McCrocklin: Nobody invests in real estate, unless it’s, you know, they look at the hard numbers, cash-on-cash return; that’s all they are looking at.
Ramseur: Not location?
McCrocklin: Well, location, location, location. You know, the joke is those are the three things that are on top of the list.
Ramseur: But numbers are what makes it go.
McCrocklin: Yeah, you know, San Marcos is in a growth area. It’s in an area that’s part of a large metropolitan complex, Austin. I really consider it more as a suburb of Austin. Everybody thinks we’re [a] low entity. I don’t look at us that way; we’re a suburb of Austin strictly. Eighty-five percent of our brokerage business now comes from the Austin area, you know, you [have got to] look at the numbers and you [have got to] look at where we are at. Why is Austin still selling? Because we are really sheltered from the rest of the Texas economy; we’re not dependent on oil as a whole, we’re not dependent on agriculture as a whole. That’s why the unemployment rate in Austin is 5.8% and in the state it’s 9%, and the same thing holds true for San Marcos; we’re part of that area.
Ramseur: Entering into your career at Southwest Texas, teaching, and mov[ing] out of the real estate part of the interview. How long have you been teaching at Southwest Texas?
McCrocklin: I taught one year.
Ramseur: Oh, one year?
McCrocklin: Yes.
Ramseur: Are you currently teaching there?
McCrocklin: I don’t have time to do it, I like doing it, but I just don’t have time for it.
Ramseur: Have you ever served on the City Council?
McCrocklin: No, and although I started a city council recall and tried to recall all of them and probably at that time would have run for City Council, my wife would have probably divorced me, and my family would have probably divorced me. There comes a point that you can’t take any more inconsistencies that you see going on, but in the same breath, I found out one thing from the recall: that John Q. Citizen of San Marcos doesn’t understand the complexity of the issues because they are not knowledgeable, and I’m not saying they were unintelligent. They’re just not knowledgeable, and there’s a difference between intelligence and knowledge, and if you’re not aware of what goes on at City Hall or the problems of what goes on at City Hall or how things are implemented, you don’t know and don’t care, and unless it affects your work daily like it does mine where frustrations sets in and you want to crown them. Classic example: Wendy’s is trying to come into town. They’ve applied for variance on their parking, they drive up for a variance hearing on Tuesday, and the City staff knew before they even left Houston, I mean Tuesday morning at eight o’clock, they knew that there would not be a hearing because they screwed up sending out notices to adjacent property owners. Rather than get on the phone right then that morning to tell them not to come, the guys wait until 4:30 and then tries to cover his rear by saying, “Well, I tried to call you.” And the meeting starts at 5:30, and a guy drives all the way up from Houston with one of his attorneys, and then [he] says “Well, sorry about that, we tried to call you to tell you not to come because you are not going to be heard we made a mistake.”
That’s the typical, whether it’s here or in Austin. It’s unbelievable, and I’ve got letters that I could pull out of my file here that shows you kind of general attitude about how the City feels about local developers. On October 2, 1984, and I’m reading this verbatim from a letter written by A.C. Gonzales to myself, second paragraph: “I’m anxious to work with you and every other developer who might be interested in creating projects in San Marcos.” Now, I consider that part a slight to begin with because the project that I’m talking about creating is Champions, which you see on the wall there, which is under construction, and when he refers to people creating, he’s talking about plans, he doesn’t think they are getting off the ground, so that’s the first insult. Little is going to be gained by your pushy impatient tactics. Okay, that’s in black and white right there. All right, the second paragraph from the close, he tells me, there’s a long story to this: “So that you might avoid any further costly delays.” Well, first off, he says any correspondence from the City contradicting this position should be disregarded. “So that you might avoid any further costly delays, I suggest that you work with George Baker, Public Works Director, and Steven Jenkins, City Engineer, as soon as possible to generate the necessary information that they will require.” He’s telling me to forget and disregard a letter dated September 14 two weeks earlier from the same individual he’s telling me to go back and work with.
Ramseur: It is not coordinated?
McCrocklin: Oh, they knew what this letter said, but the City Manager changes his mind and says, “Disregard what we’ve already told you, we’ll do, go back and work something different out that I like better.”
Ramseur: This is a classic example of their anti-growth attitude, then?
McCrocklin: This file right here that you looked at. That right there is probably nineteen months’ worth of work for one fifty-nine acre development I’m dealing with. I’ve had to deal with the Texas Water Commission. I’ve had to deal with the Public Utility Commission. I’ve been in overlap in ETJs between the City of San Marcos and the City of Kyle, been in a fight between them, a feud and used as a pawn in a chess game as to where I was going to end up. I had to deal with the Maxwell Water Supply Corporation, the City of Kyle public utility department to see where I was going to get water; the telephone company, both Southwestern Bell and San Marcos Telephone, over cables that are buried on the property that had to be moved. Pedernales Electric Coop, which says, We’ll move a line for $7,000, and then [the company] sends me a bill for $34,000. When I hold their feet to the fire for the $7,000 and they do it, then they send me another bill to remove another line 652 feet, it will be an additional $34,123. So what you don’t understand is that I could show you a classic example, from start to finish, of how much pure hell we have to go through, and this project is a classic, and it’s kind of amazing that you are in here today because just Tuesday night after starting this, September 14, 1984, was the date on the first letter that you saw.
Ramseur: Right, I saw that.
McCrocklin: Last night, I finally got all the easements in place for the water for this project, and we are October 9, 1986, Okay?
Ramseur: Okay.
McCrocklin: Two years, and I’ve just now got the water lines easements in place. The railroad has the license or easement coming under the railroad for the water line, which will be back tomorrow, and then I can finally start construction on the water line where I can sell my lots.
Ramseur: And this is an example of the cost being passed to John Q. Citizen?
McCrocklin: Sure.
Ramseur: Through the City’s negligence and being anti-growth, it passes the cost on [to] the consumer.
McCrocklin: Let me give you the rest of the story. This development here, I am dealing with Fortune One Thousand Company, wants to put 315 jobs in the community.
Ramseur: Can you name the company?
McCrocklin: No, I can’t, but if they come, it’s going to be a boon to San Marcos. We need the employment just like we need Wal-Mart or any other company that’s coming in here, and yet when I discover on Friday before I’m to get my final plat reading from the way it’s plated up there, all right, they called a special meeting in Kyle, Tuesday morning at 8:00, and this is the Friday before, the surveyor, an engineer that’s working on my project calls me at noon and says, “John, you don’t want to hear this” and I said, “God, I’ve had so many problem to this point, [I] don’t want another one.” Well, he said, “You know how we originally thought you were in the San Marcos ETJ and tried for a year to get it through City Hall down there, and you couldn’t get anything done?” I said, “Yeah.” “Then we thought you were all in Kyle.” I said, “Kelly, if you tell me that I ended up half in Kyle and half in San Marcos, I’m going to shoot you,” and that’s what he exactly told me. Right through the heart of that development is where they replated the ETJ lines or the City limits extensions. It couldn’t have been a better shot, right through the heart of it, if you aimed, just like hitting a bull’s eye.
Ramseur: What date were the lines reshot?
McCrocklin: That Friday morning. The city asked them to go out and do something because they were arguing over the ETJ boundaries and to where Kyle was. Okay, so they just went back and recalculated when this was granted, when this was extended, back and forth, and San Marcos, the guy had made a mistake on his maps, so he tells me this Friday at noon. Well, that meant that anything that I did, if I didn’t get it worked out with San Marcos before Tuesday morning at 9:00, would not be legal from a statutory standpoint. I went to City Hall [and] got the City Manager, and he tried to think of every way in the world not to do it, and thank God for Mayor J.E. Younger because he told the City staff what they were going to do. He put it on the agenda, and they passed me four-to-three vote to give me up to Kyle because J.E. was smart enough to know that San Marcos would screw the deal up. They passed it four-to-three at midnight on Monday night. I then go to bed for six hours, get back up and go to Kyle the next morning and get it passed. Now San Marcos wants me back, and they’re trying, although they voted against it, which would have killed the deal now that I’m putting the thing in, now they want it back for the tax base.
Ramseur: Is this after you have already invested the money in the land and everything else?
McCrocklin: The three councilmen vote the way they vote, cost us $260,000 in interest payments. Now, I’m just telling you that to give you a cold hard fact, 260 developments.
Ramseur: It would turn around and cost the consumer.
McCrocklin: Ten cents. That is a 5% increase of the total cost of the product because of their screw up and their attitude, and the Councilman will be the first one to tell you, “I don’t know, you know, Mr. McCrocklin’s attitude is stagnant. He doesn’t know what he’s talking about. We’ve bent over backwards to work with people. He’s a rabble-rouser.” Yeah, I’m a rabble-rouser, God dang it; I have to make my living off of selling real estate. I hold the CCIM designation [Certified Commercial Investment Member designation]. Out of 750,000 licensed agents that are realtors in the United States, there are 2,673 designated brokers that have obtained that designation. 2,673 out of 750,000 brokers, and they act like I don’t know what the hell I’m talking about. I hold the CRB Designation, and there are about 7,500 that hold that.
Ramseur: What does the CRB stand for?
McCrocklin: Certified Residential Brokerage manager and I’m getting the CRE Designation which is [Council Real Estate], and that’s open by invitation only. You don’t apply to them, they invite you to join. There’s less than 7,500 of those designations around. I’m being invited in November at the National Convention to join their organization, so it’s not like I don’t know what I’m doing, and I resent the fact that these idiots [are] trying to tell me what a development is going, how I should go about it, and what’s good for the community when my degree is in Insurance and Real Estate. I’m very cognizant of how to protect the public from an insurance standpoint, very cognizant of how to protect the public and give a very marketable product. You can’t point your finger at anything I’ve done in town as being substandard, nothing, and I don’t understand why they treat local people with that kind of attitude. I have more knowledge in my little finger about real estate than the seven people on that council combined or anybody in that building, and I’m not trying to toot my own horn, I’m trying to make a point. Today, “What address do you see right there?” Bangkok, Thailand, all right, that’s one of my clients, what’s the address?
Ramseur: Denver, Colorado; Kansas City, Missouri; Inglewood, Colorado.
McCrocklin: Long Beach, California; San Diego, California; Chicago, Illinois; Austin, Houston; Indianapolis, Indiana; and that’s a water commission in Austin. But those right there, all right, the guy from Kansas City, I sold an $8 million shopping center. Sunday in Austin, I met him at the Hyatt Regency; three hours later I [had] a contract for $8 million, I’ve got him writing another contract for $8 million on another shopping center in Austin, and the guy from Chicago in here is due in to write a $25.2 million contract next week, and what I’m trying to tell you is [that] I’m not a neophyte in my business. I’ve done consulting for this law firm right here, and if you want to check them out, I’m just saying if you want to see who that gentleman is.
Ramseur: Lipshultz, Attorney at Law.
McCrocklin: Robert J. Lipshultz is a former White House legal counsel for Jimmy Carter.
Ramseur: That’s pretty nice; Atlanta, Georgia?
McCrocklin: That’s right, and I charged $260 an hour for consulting fees when I went.
Ramseur: You charged $260 an hour?
McCrocklin: That’s right. So it’s not like people in this town don’t know the involvement that we have and the background that we have. So when I go to a City Hall, I’m incensed by the attitude, mainly it’s because I’m cocky but I’m sick and tired of people acting like, you know, big wheels. They’re going to find out sooner or later when they come to grips with reality what dogs do to wheels, and that’s just about what is going to happen to City Hall if they don’t wake up. We’re killing the golden goose. The developers that want to come in and do right. We ran NPC’s trust deal out of town because we wouldn’t cooperate with them on putting a red light out here and doing some of the things that was necessary to keep them; eighty employees, we ran them out. You know, just one thing after another, you talk about what have they done, they sit and point, “We won this award and we won that award,” but awards don’t pay taxes. Our taxes went up again; awards do not produce services to the community. You start naming all this stuff, my God, what have they done? Nothing. They have increased our bonded indebtness, you know, but they [have got to] wake up to grips with reality that we’ve got to make changes.
Ramseur: Okay, in conclusion, what do you see happening in San Marcos, Central Texas in the near future, the next twenty years?
McCrocklin: Well, currently, I think the problem that we have in our immediate area is newspaper publicity that is negative. It’s detrimental to our community. You know, when you pick up the Austin newspaper and read doom and gloom about the Texas economy every time you turn around , and you don’t look closely with the statistics that show that Austin has only reached 5% unemployment annually in the last thirteen years one time. I mean, 5% is the highest it’s been in thirteen years on an annual basis, and we’re still, like I told you earlier, 5.8% unemployment compared to other parts of the state, compared to 9–18%. I think that what we’re seeing is that we’ve had tremendous growth. Growth has slowed down, and I think for the next two or three years it’ll level off to 3–7% growth, and then I think we’re just going to take off like a rocket again when all of this nonsense about ordinance for this and ordinance for that and they figure out how much it’s costing the public; when that happens and they straighten it out, it will happen. I think by the year 2000, you are going to see the same thing between Austin and San Antonio [that has] happened to San Diego to Los Angeles in Orange County. I mean, it’s just like one community is falling into another on, and all the way up from LA, almost all the way to San Diego, it’s just one large community. That’s what I see happening.
Ramseur: What are your personal goals and those of McCrocklin Real Estate in this same time period?
McCrocklin: Well, personally I’d like to slow down a little bit. I’ve been in the real estate business now, this will be my fifteenth year, and there’s just a lot of stress and pressure that you put on yourself, and it comes from outside sources like dealing with the ordinances and trying to give the public what they want, and like this weekend will be the first time in twenty-one months that I’ve had time to take off, and I’m not a workaholic. I’m a workaholic in the sense that I have to get things done and because of the way the market started turning twenty-one months ago, we saw it coming and knew it was going down, and that’s why we have not had to file Chapter 11 [bankruptcy], and we are still very solvent, and why other companies weren’t. They took the weekends off and weren’t planning trying to stay ahead and didn’t know it was coming, and we killed two of our project immediately, even though we had $100,000 in planning on building here with engineering and everything else and in Austin they were office buildings, and we felt like the market was going to be flooded, and we dropped off. And so what I want to do personally is started to slow down from the development standpoint and probably have some more fun like selling these shopping centers where you deal with intelligent people; you give them the number they want, you send stuff to them, and by the time they get to town, they either say, Yes, I’ll do it, within a three hours period or, No, I won’t do it. And the commission on that $25 million-sale is a $.5 million. The one in Austin on the $8 million center is about $160,000, one of the other $8 million centers has got $240,000 commission on it, and those are the type things that if I can make that kind of money off of doing two or three deals.
Ramseur: So, why have the headaches.
McCrocklin: Exactly, it’s just not worth it. So my goal is to eventually get to the point where I do more counseling for developers because I’ve been through it first hand; I’ve done construction work, I’ve owned a construction company, I’ve owned a management company, I’ve done department development, I’ve done industrial development, I’ve done subdivision residential development, I’ve done retail development, I’ve done shopping center, I’ve done leasing, everything that I’ve done makes me an expert in my field. Again, I want to straighten this out because God brought me to my knees once in playing football because I got a swollen head, and these are things that God has given men as an ability to do, and I want to enjoy what’s around me without putting myself into an early grave, which I guarantee I know now why Henry S. Miller or Tramel Crow and the others have surrounded themselves with the MBAs and the youthful people that continually are in and out of the door and take some of those weights off. That’s why when I get to the point that I don’t have to do everything personally, but I haven’t found the type. Well, Ron Hart’s an exception. Ron’s a guy that if I give it to him, I don’t have to worry about it; I know it will be done in the way that I would do it. In fact, it’s ironic, we sometimes wear the same color slacks, the same color tie, the same coats without even knowing it, and we think enough alike. If I tell him how to do something or what I want done, I can leave it and walk away from it.
But, I’ve not been able to do that from the stand point of twenty-one months’ worth of development frustration, and then you get a down cycle on the bank or bank industry where the pressure is there with your banker clawing at you, every time you turn around, Where’s this, Where’s that, Why hasn’t this been done. And you sit there, and by the time you know it, you’re tense, you’re uptight, and although it’s fun and it’s a challenge, it’s also a lot of fatigue, and you’ll find statistically real estate brokers have the highest hospitalization rates, due to stress, in the United States, and it goes with the territory. Because when you think about it, not only with what I told you but the liability of representations. I got sued once because an individual told me, he came out and says, “Three of these houses that you’ve just sold the property line [are] wrong.” I said, “You’re kidding. The surveyor [put] the stakes right there, and they are there.” He said, “I know, and they have been plated like that with the county, and that’s a plated lot, but we found out that this property line is twenty feet off from where it’s supposed to be.” So, I go down to the Title Company and tell them what I’d been told, and they were already aware of it; they didn’t bother to call and tell me. So I asked them to please write the people that had bought and the people that had the other two houses under contract a letter stating what the circumstances were, and because they started the letter out, “Dear Mr. And Mrs. So-and-so, Mr. John McCrocklin has brought it to our attention,” and I had not, somebody else had, the same person that told me.
Ramseur: But those words were perfect.
McCrocklin: Because the way they led into it, I got sued, and people thought that I was trying to be fraudulent about where stakes were to sell houses for $2,000 commission per house. I mean, it’s ludicrous. I’m not going to screw my reputation up, period, but let alone for $2,000 is just unbelievable. But anyway, it got to the point to where the Attorney General’s office came down, they investigated it, and they said, I don’t know what these people want. I showed them my file, I showed them what I’d done, [and] he said, “You’ve done everything right. I’ll try talking them back into suing the title company.” They never sued the title company, and the title company is the one, the guy that built the houses and I had to jointly sue to get to settle the thing, and then suit was dropped against us.
Ramseur: Didn’t they run an abstract of title and find out?
McCrocklin: They knew, and they even told in the letter that there would be no loss of any monetary value to the property owner, they would represent them in court and all kinds of things, but the same title company here in town, which I won’t mention by name, but it’s the same title company that every time I’ve had a problem—I’ve been sued five times, I’ve won five times—and each time it was over a title problem like that, and each time it involved the same abstract company, and needless to say I don’t do business with them unless I absolutely have to. I’m just saying people remember the real estate agent because they think “scape goat,” so our errors and admissions has been like doctors. I think last year it went up from three thousand to twenty-six thousand a year, you think about that. That’s a lot of money. But, again, I guess where I’d really like to end up is just selling the fun deals because the CCIM designation has opened the door to dealing with—I got a directory of the people nationally and they are all specialists, they are all highly-trained, and it’s like having a master’s degree in commercial real estate. And so if I call a guy that’s for a CCIN designation, if I tell him what I want I know what I’m going to get, and when you do deals like that you don’t have to retrain them or reinvent the wheel like a lot of these commercial brokers or people that say they are commercial brokers that don’t have the background, don’t know what a cap rate is, don’t know what terminator term really means, they use the cue phrases or whatever is in, but dealing with those type of people is where I really want to end up.
Ramseur: On a professional level.
McCrocklin: Yeah, there’s one guy that now instructs for the Realtors National Market Institute that promotes the designation, one-man office, make $980,000 a year, and, you know, I don’t care about making that much money; all I care about is keeping the doors open.
Ramseur: He’s a consultant?
McCrocklin: He’s a single brokerage firm and consultant. Well, if this development right here had been done by a consultant in Austin rather than by myself, it would have cost me $73,000 roughly to do what I did, and somebody is going to pay for that fee. I’d just as soon as have them pay it to me than to pay it to some, and this is no offense, land planner because the problem is in land planning. I know more or as much about land planning and design as a lot of the guys getting out of school because I’ve been through it and I know where my mistakes are, and, you know, if I can become a consultant and relax from the high pressures that it’s not my dollars and cents on the table, I can still be empathetic, but as long as it’s not my risk. I’ve eliminated the risk but I’m still having fun. Like I say, the pressure begins to really play psychologically, and I don’t recommend anybody going into any business that can’t go twenty-one months without taking off, it’s just not healthy.
Ramseur: With a family and a new daughter.
McCrocklin: I’ve had a child in that period of time. We had our third child in January of this year, and, you know, that has been a real, real tough thing to deal with. My son’s now taking karate lessons, he’s into soccer, he’s into T-ball, you know, those are all family-oriented things. My daughter will be three this month. She really hasn’t gotten to that level but when she does, you know it’s going to be a mad house; it already is, and whereas two years I used to go to the lake on the weekends and have time to have fun, I haven’t been to the lake more than seven times in the last year. I’m sitting with a 260 horse power in-board boat and engine sitting in a slip, and I pay $100 a month, and I don’t even get to enjoy. But I haven’t sold it because it doesn’t cost me other than slip fee. I like to try to do the best at what I am and enjoy being better at what I am than what the community may know. In other words, it’s the self-satisfaction that I get from completing a deal or doing something that’s professional that I have the respect from my peers that I don’t need necessarily everybody in the community to know the type of money deals that we are involved in or I don’t know need them to know. Why should I have to go tell them in order to get something passed? You know, I just completed $220,000 transaction that’s none of their business, but again it’s something that from a professional standpoint I’m very proud of what I’ve accomplished, and most people in a town of 33,000 people could not do what I’ve done. In fact, I’m what I am because I hold broker’s license[s] for Arizona, California and Texas. I’m just not local state broker, but I also have California and Arizona. Buddy, you haven’t lived until you pass the California exam.
Ramseur: More difficult than the state test?
McCrocklin: Eleven perent of the public passes the first time that they take the exam.
Ramseur: As compared to 40% here, 60%.
McCrocklin: Probably 80% here. The California Department of Real Estate was founded in 1929, and it’s the oldest real estate department in the United States.
Ramseur: When was TAR founded?
Phone rang
McCrocklin: Around the forties or fifties.
End of interview