Part 7 of Land and Loot

Lehman Brothers Had a Role in General Homes

General Homes - Connections with Canada

One way to research General Homes is to begin in 1983, when it really began to sell homes at a fast pace. It was that year that certain investment banks, primarily Lehman Brothers, began issuing mortgage-backed securities. The public offering for General Homes also was brought out that year, bringing in money for new stock issues that was pumped into real estate purchases in Harris County. Possibly this new-found cash was a means of paying off some of the other companies which had already bought land in that area, or perhaps it was to continue the growth in that area with an updated legal vehicle the attorneys and legislators had pushed through.

But as we will clearly see, the moving force behind the move into residential development and construction in Harris County was a group of Canadians who had formed a partnership to build the new commercial retail and office center in downtown Houston on land owned and acquired by an arm of the Texas Eastern Transmission Co. This group was called Cadillac Fairview, but the Bronfman family members who owned the stock were also heavily in banking and other industries as well, as Leo Kolber explains in his book, Leo: A Life. In 1978 Cadillac Fairview acquired an interest of General Homes, a Texas corporation, which formed General Homes Consolidated Companies, Inc., and by 1983 (almost two years following the IPO) the stock was owned as follows: General Homes Management Co. owned 97%; General Homes Investment Co. (partnership of the Texans from whom the company was purchased in 1978) owned 1.5%; and ASLA of Florida owned 1.5%.  The address of General Homes Management Co. was 17801 N.W. 2nd Avenue in Miami, which was the address of

Morris N. Broad and ASLA (formerly American Savings & Loan Association). However, Broad and his father in December 1982 had signed a voting trust agreement relative to control of ASLA with Marvin Leon Warner, a Cincinnati businessman, to allow Warner to purchase $13 million of ASLA stock.

In 1963 the Bronfmans bought Texas Pacific Oil and Coal, which they held until 1981, using their $2 billion profit to take over Conoco, by means of stock acquired from DuPont. According to Kolber, the Bronfmans would sell off Cadillac Fairview in 1987 to buy MCA, but the years we'll be dealing with here occurred while they were in control--and while Edgar Bronfman, Jr., who controlled the corporate interests, was married to Ann Loeb, daughter of John Loeb and granddaughter of Carl M. Loeb.


In December 1983 General Homes acquired 86 acres in Old Town Spring, an unincorporated city north of Houston, from North Spring Joint Venture, a partnership between Walter Mischer’s TMC Funding and United Financial Corp., whose stock Charles Hurwitz (a customer of Michael Milken) was buying up in 1982.[1]  

Development around Spring had taken off five years earlier by Canadian-connected corporations. In 1977 Genstar Homes of Canada had acquired all of Lexington Woods Section 5 in Spring from Spring Village Development Co., which involved H. Arthur Littell and Don McGregor, Jr. [Harris Co. File No. F404069].[2] The executive vice-president located in Houston for Genstar was Bernard Johnson, an engineer who was one of county judge Jon Lindsay’s biggest contributors. His engineering office was on Westheimer between the Galleria and the Post Oak Bank, next to Michel Halbouty's original office building.

Genstar was established in Canada in 1951 as Sogemines Ltd. by Societe Generale de Belgique de Brussels. It was closely linked to the Royal Bank of Canada, and its chairman in 1955 was Angus MacNaughton.  When Genstar opened an office in the U.S., its headquarters was in San Francisco in a Rockefeller building called Embarcadero Center. In 1986, however, the Genstar corporation was bought by Imasco, based in Montreal, a company set up to handle investments for Imperial Tobacco, Canada Trust and Shoppers Drug Mart. In 2000 those corporations were sold off to British-American Tobacco and Toronto-Dominion Bank.  

Genstar bought property in Houston primarily from companies controlled by McGregor, Littell and Marvin Leggett, who were involved with Canadians in Lexington Development and in Markborough Properties, a subsidiary of Hudson’s Bay Co., Canada’s largest retailer, which acquired Markborough in 1973 and spun it off in 1990 “to shareholders in the form of a dividend. HB offered one Marborough share for every HB share held. Kenneth Thomson, chairman of Thomson Corp, and his family, holders of” the majority of shares:

Hudson's Bay Company acquired Markborough Properties, a real estate company, in 1973; Zellers, a chain of discount department stores, in 1978; and Simpsons, a group of Toronto-area department stores, the following year. Kenneth R. Thomson, representing the family of the late Lord Thomson of Fleet, acquired a 75 percent controlling interest in the company in 1979…. In a strong attempt to survive, Thomson shook up top management, eventually appointing George Kosich, a career merchandiser, president. Thomson revamped retail operations. The combined market share of the three department store chains rose to 33 percent from 29 percent in two years…. Hudson's Bay Company reversed a formidable debt picture in 1987 by shedding nonstrategic assets such as its wholesale division and getting out of the oil and gas business. In 1990 it spun off its real estate subsidiary, Markborough Properties, as a separate public company. Shareholders received one share of Markborough for each share they held of Hudson's Bay, with the Thomson family retaining a majority interest in Markborough. Also in 1990, the company bought 51 Towers Department Stores and merged them with Zellers. 

By 1981 Hudson's Bay--the merchandizer corporation, which was successor to the Canadian fur trading company chartered by the Crown--whose stock eventually came into the hands of London investment banks in 1886--would be owned by Conoco (which was taken over by the Bronfmans). But it was through a series of intricate and confusing maneuvers and manipulations which led to that outcome. To understand the relationships, we have to begin with the individuals named in Genstar documents. Genstar was busy buying land from Don McGregor, H. Arthur Littell and Marvin E. Leggett.

Who were these men?

Leggett and Littell, who owned Texas Bank and Trust,  were both directors also of Colonial Savings, an institution chartered in 1961, in which Littell was chairman and William H. Doyle, Jr, was president in 1977. S.N.Goldman (the Oklahoma grocery tycoon, owner of Standard Food Markets and Humply Dumpty, who in 1937 invented grocery shopping carts ), with whom the two were involved with investments in Oklahoma mineral interests, was also a director. The headquarters was 6161 Savoy in Sharpstown. Other directors were Jack D. Mulvihill,  J. Curtiss Brown, a long-time official of the Texas State Bar before his appointment as chief justice of the Texas Court of Civil Appeals for the 14th District; Edward R. Godwin, senior vice president of Mortgage Trust Inc. of Houston; and Houston City Councilman Johnny Goyen.

They worked on the development of Regency Square in Sharpstown, an area in which Frank Sharp had spearheaded a huge Texas scandal referred to as the Rent-a-Bank Scandal. Sharp had begun his 25,000-home development in the heart of Houston with great fanfare during the Cold War days of 1955 by announcing he was considering including bomb shelters as part of the construction. Seven years later, shortly after Houston had been selected as the location of NASA headquarters, Sharp began announcing that astronauts would be given free homes in Sharpstown. The acreage for Sharpstown had been acquired at a cost of $6 million in the mid-50's. Sharp had to be quite confident of success to spend that kind of money, or he must have been acquainted with some very convincing salesmen. .

 In 1930 Sharp, young and single, was living in the Savoy Apartments at 1600 Main Street in downtown Houston. He transitioned from oil sales to home building in a few short years. He arrived in Houston from Crockett, Texas, where his father was a carpenter and farmer, rearing a great many children there. Within a few short years Sharp had become secretary to the Houston Lions Club and was friends with the newly elected Congressman in Houston, Albert Langston Thomas, accompanying him and his wife on out of town trips; Sharp, too, had married by 1937. 

In the 1970's Littell had become associated with South Coast Investment Co., which would be located in Houston at 806 Main, a building once referred to as "Carter's Folly," home of S.J. Carter’s Second National Bank building. It later sold to a subsidiary of American National Insurance before Howard Pulver, a strange New Yorker who spent some time in Corpus Christi before relocating to Houston, began using it for apartment syndications. He and his associates were described in detail by Pete Brewton in his book, The Mafia, CIA and George Bush. An important player in that insurance company was Dee S. Osborne, who applied for a state bank charter in Sharpstown early in 1971, naming proposed directors of the Community Bank of Houston as Corbin J. Robertson Jr., Meredith J. Long, William N. Finnegan III, R. E. "Bob" Smith, Vivan Smith, Marvin K. Collie (famed attorney at Vinson and Elkins law firm in Houston), Morgan J. Davis (petroleum geologist who spent his career at  Humble Oil and Refining Company (now Exxon Company, U.S.A.); and Gaston E. Heffington, all of Houston. Some of those same men were drawn into a scandal in 1983 involving the Hermann Estate, which set up the Medical Center with a gift from George Hermann:

The South Coast Investment Company was a vehicle of South Coast Life Insurance, whose directors included independent oilmen Grover Joseph Geiselman (with an office at Suite 849 of the Houston Club Building, where both W.S. Farish III and George Bush were located during the late 1950's), Floyd Louis Karsten of Fort Worth, Jack S. Blanton of Eddy Refining Company, and E.C. Scurlock  (among several other oil men), attorney Newton Gresham, a partner in Leon Jaworski's firm, Charles G. Heyne, and Vernon F. Neuhaus of Mission, Texas. Most of these individuals have in some way been connected with the Neuhaus Education Center in some manner since its founding by W. Oscar Neuhaus in 1978.

Klebergs and the King Ranch

Geiselman's son was married to a daughter of Everette deGolyer, and Neuhaus, who was related to the family of W.S. Farish through marriage, also served on the board of Texas College of Arts and Industries (Texas A&I in the Valley) with numerous illustrious Texans, including John F. Lynch of Corpus Christi and later Houston (senior vice president of the Texas Eastern Transmission Company) and Mrs. Richard M. Kleberg Jr. of Kingsville, whose husband was the Congressman for whom Lyndon Johnson first worked in Congress. Charles Heyne was the uncle of Marcia Heyne Modesett, granddaughter of Fred J. Heyne, Jesse Jones’ right-hand man for many years, who remained in control of the Jones family companies and foundation until his own death in 1966. More will be said about this group later.

In 1973 Neuhaus was one of the honorees who received awards from emcee John Connally from the Ex-Students Association of the University of Texas, along with George R. Brown of Brown & Root and Texas Eastern Transmission Co., and Tom Landry, coach of the Dallas Cowboys.


The long and short of it is that, even though not well-known, Littell was "close to wealth and power" in Texas at the time. It is a type of power that has never been adequately explored or understood. Exploration of the network that gave it life and power is the goal of this project.


Littell was also in partnership with S.N. Goldman of Oklahoma City in a number of syndications that, by all appearances, could have involved the laundering of money through overseas banks, and he was connected with some of the biggest banks in the U.S. who provided financing for his buyers.
Leggett and Littell also developed lands surrounding the Sam Houston Racetrack, that had been held by Lexington for many years before a horse-racing license was finally approved in Texas. The land surrounding the racetrack was developed by Leggett--for commercial purposes--and by General Homes--for residential.  The State Highway Commission, chaired by Bob Lanier, agreed to complete Beltway 8 through the property, and Harris County Flood Control District paid for the drainage outfall. But that's another story.

NOTES:

[1] The history of United Savings began with Houston First Savings, founded by Humble Oil executive and attorney, Rex G. Baker, Jr., which was changed to Southwestern Savings before again changing its name to United.

[2] McGregor's father had owned an office next door to Lomas & Nettleton at 201 Main in Houston and had bought land in Nassau Bay with financing from Carl M. Loeb, Rhoades & Co.  In 1966 Don McGregor, Jr. had an office on the 12th floor of the First City National Bank Bldg. and was involved in a number of general partnerships with Solomon Goldman of Oklahoma City [Harris Co. File No. C414892].