Texas developer Kenneth Schnitzer had a dream and James W. Lee was in the way. Schnitzer’s dream was a city-within-a-city near downtown Houston, with great towers rising from magnolia groves, lakes and landscaping, cars tucked away three stories underground. It was to be called Green-way Plaza, the best of rural and urban living combined.
To get his plan underway, Schnitzer and his Century Development Corp. needed land. They decided on a 127-acre plot, occupied by 350 homeowners. One of them was James W. Lee. Since Schnitzer did not want a hassle, in 1969 he offered generous and aboveboard terms—30 to 50% over the going price. The offer had an additional sweetener. Sellers could take their homes with them when they moved, or live in them rent-free for the four or five years before bulldozers arrived to level the ground, or rent their homes during this period and pocket the profit.
After some fast arithmetic, most homeowners took the offered price, which averaged a little over $26,000, and moved on. But James W. Lee, a rotund, affable real estate lawyer, was in no hurry to move—mainly because he was living well within his budget.
Lee and his wife Dorothy had built their three-bedroom ranch house for only $20,500 and had bought their furniture inexpensively for cash at unclaimed freight sales.
“It didn’t take discipline, really, to resist the offers,” Lee says. “I think a lot of people out here were in a hurry to sell because they had obligations.”
By the end of last year, holdouts were down to a handful. As the offers moved upward to $75,000, then to $100,000 and finally to $150,000, they all succumbed, leaving Lee alone.
When Lee turned down an offer of $250,000, saying quietly, “I am in no hurry,” he got a call direct from Schnitzer. Why didn’t the two of them lunch at the prestigious Houston Club?
“It was totally pleasant,” Lee recalls. “He didn’t pressure me at all. He told me what he wanted to do. And when we parted he said, ‘Oh, I know you’re going to get me, but don’t make it too tough, will you?’ ”
Lee went home, figured out how much his land was worth, based on downtown Houston real estate prices, and came up with his asking price—a cool $525,000. Furthermore, he said he would like an answer in 30 days.
Twenty-nine days later Lee got his reply—total capitulation, including payment over eight years, as Lee requested, for a capital gains tax break, plus 10 percent interest.
The Lees now plan to indulge themselves a little. “I’ll buy a newer home; I’ll serve better whiskey and I’ll buy better steaks,” Lee says, smiling. But one thing troubles him—”Just how much did I leave on the table?”
No one knows for sure, but Kenneth Schnitzer, who is now free to complete his Greenway Plaza, at least gives a hint. Says Schnitzer ruefully, “Lee hit my choking price.”