RECESSION (1980-1990)
The Census of 1980 showed a population of 1,594,086 for Houston. Only New York, Chicago, Los Angeles, and Philadelphia had bigger numbers and Houston passed Philadelphia in 1982, by unofficial Houston calculations.
A survey of new office buildings in 1981 revealed that more new office space was built in the suburbs than was built downtown during the preceding five years. Houston Magazine listed 54 suburban office parks, but building continued downtown, too. The Texas Commerce Tower was completed in 1981. Work was proceeding on the Capital National Plaza in Allen Center, on the First City Tower, on 1010 Lamar, and on 801 Travis. The old Memorial Professional Building on Louisiana was being demolished to make way for the new Allied Bank Tower. Building permits totaled $2.5 billion in 1980.
The city bought the old Sharpstown Country Club and began converting it to a public park. The city council agreed to make the two blocks bound by Texas Avenue, Smith, Preston, and the bayou available for a proposed new Lyric Theater. George Brown was pushing for a new and bigger convention hall in Houston Center.
Work began in 1981 on the Allied Bank Tower, and on a new Gulf Tower and The Park retail mall, both in Houston Center. A new hotel was completed in Allen Center, originally called the Meridian and operated originally by Air France.
American General started work on a new 42-story tower in the American General Center in 1981. Gerald Hines started work on a new tower for Republic Bank on the block bound by Smith, Capitol, Louisiana, and Rusk. Hines bought the Lamar Hotel block bound by Main, McKinney, Travis, and Lamar. He closed the hotel in 1983, sold the contents, and in 1985 demolished the Lamar and the other buildings on the block, including the remnants of the long-closed Loew’s and Metropolitan, once the city’s grandest movie palaces. Hines started work on a new building for Transco near the Galleria. The Transco Tower was the tallest building outside the downtown district when it was completed in 1983. Building permits issued in 1981 added up to $3 billion. It was the largest total recorded in a single year by any American city up to that time. The port was again third in the nation in total tonnage handled, and first in foreign trade.
The board of the Houston Independent School District was expanded from seven members to nine members in 1981 for the same reason the city council had been expanded.
The city election in the fall of 1981 produced something new. Mayor Jim McConn failed to make the runoff. City Controller Kathy Whitmire beat former sheriff Jack Heard to become the first woman mayor in the city’s history. She made some changes. She hired Alan Kiepper away from Atlanta to run the Metro system and she brought Lee Brown from Atlanta to be chief of police. Brown was the city’s first black police chief.
The Texas Turnpike Authority completed a toll bridge over the ship channel at Beltway 8 in 1982 and named it for the late Jesse Jones. Channel 20, Inc., put KTXH-TV on the air on Channel 20 on November 7,1982.
Roy Hofheinz died on November 21, 1982 at the age of 70. Most of the empire he had created had gotten away from him a few years before. He couldn’t meet the payments on the debts he had incurred in buying control of the HSA and building hotels and the Astroworld Park. His creditors foreclosed in 1975. G. E. Credit and Ford Motor Credit Company took control and then sold HSA and the hotels to a limited partnership headed by John McMullen in 1979. The Hofheinz funeral procession detoured to circle the Astrodome enroute to Glenwood Cemetery on November 24, 1982.
Caroline Hunt’s Rosewood Corporation built the Remington Hotel on Briar Oaks Lane for a reported $60 million in 1982. Investors from out of state bought it six years later for half that price and changed the name to Ritz-Carlton. The Queen of England and Prince Philip stayed at the Ritz-Carlton when they visited Houston in May, 1991.
The Four Seasons Hotel in Houston Center was completed in 1982, as were several high-rise condominium buildings. Plans were announced for the 50-story Four Allen Center. Work started on the United Bank Plaza Building at 1415 Louisiana and on the 1600 Smith Building in Cullen Center. But applications for new building permits fell a little short of the 1981 mark.
Houston Democrat Mark White upset Republican Governor Bill Clements in the November election in 1982 and when White took office in 1983, he named Houston developer Bob Lanier to chair the Texas Highway Commission. Lanier held that job until Clements won the governor’s office back in 1986. Houston did not lack for highway improvements.
George Bush had served in several high appointive offices during the Nixon and Ford administrations and then returned to Houston when the Democrats captured the White House in 1976. The Bushes were living on Indian Trail on the west side when he mounted his campaign for the Republican presidential nomination in 1982. They sold the house on Indian Trail and moved to Washington after he was elected vice president in November, but the vice president continued to vote in Texas, as he said he had since 1948.
Democratic State Representative Clint Hackney challenged Bush’s qualifications for voting in Texas but attorney Hal DeMoss argued that the vice president still considered Texas his home and Tax Collector Carl Smith, as voting registrar, ruled on June 3, 1985, that it was okay for Bush to continue voting here.
Houston and Harris County got another congressional district in 1982 and Assistant District Attorney Mike Andrews, a Democrat, was elected to represent the new District 25.
Applications for building permits were back down by 1983 to the 1978 level, below $2 billion. The petroleum industry was in a slump. Business declined at the port. Migration from the North and East dwindled. Real estate brokers were estimating that it might take two years for the developers of office buildings already built to find tenants to fill them. The rest of the country and the rest of Texas appeared to think this was just a local problem. Speculative building continued elsewhere, and even in Houston, until the savings and loans started crashing in 1986.
Metro proposed to begin a rail system from the southwest suburbs to downtown with provisions for later extensions. Voters rejected the plan in an election held on June 11, 1983. Metro started planning more improvements to the bus system and more contra flow lanes. Harris County Judge Jon Lindsay and Commissioners Court easily won voter approval for a County Toll Road Authority. The authority completed the Hardy Street Toll Road from 610 North to Intercontinental Airport and I-45 North in June, 1988, and the Sam Houston Toll Way between the Southwest Freeway and I-45 North in July, 1990.
City voters in 1983 approved plans for the new convention hall George Brown wanted in Houston Center. Brown did not live to see it but it was named for him when it opened in September, 1987.
Houstonian Frank Lorenzo changed the character of the airline business in 1983 when he put Continental Airlines in bankruptcy and reorganized the company, voiding union contracts in the process. Lorenzo had acquired Continental in 1981 and merged it with the regional Texas International he had acquired in 1972.
The federal government deeded Ellington Field to the city in 1984. The city did not change the name.
Jerry Argovitz and his partners fielded a Houston team in the new United States Football League in 1984. The Houston Gamblers played their home games in the Astrodome until Argovitz and company sold them in 1985 to Eastern interests who moved them to New Jersey. Jack Pardee was the Gamblers’ coach.
The Getty Oil Company of California agreed in 1984 to merge with Pennzoil of Houston, then merged instead with Texaco. Pennzoil filed suit for damages.
The Market Square Historic District on Main Street was entered in the National Register of Historic Places in 1984. One of the district buildings most cherished by preservationists collapsed the same year. The Pilot Building on Congress Avenue was put back up by a syndicate called City Partnership Limited.
Oil prices were dropping in 1985 toward a low of around $10 a barrel by 1986. Many investors were ruined, oil service concerns were folding, drilling rigs were stacked, loans were going into default, and property values in Houston were declining. Appraised tax valuations in the county totaled $132.8 billion in 1985 and they declined by $16 billion between 1985 and 1990, when they turned up again.
Houston Natural Gas merged with InterNorth of Omaha in 1985, and adopted the name Enron Corporation. Enron established headquarters in a Schnitzer building at 1400 Smith. HNG chairman Kenneth Lay became Enron’s chairman.
A jury in Houston in 1985 found in favor of Pennzoil in the damage suit Pennzoil had filed against Texaco over the Getty merger. The jury awarded Pennzoil $11 billion in damages. Texaco set appeals in motion but settled with Pennzoil two years later for $3 billion.
One of the area’s high-flying real estate speculators was brought down in 1987. His creditors forced J. R. McConnell into Chapter 11. His obligations were said to be around $500 million and he was accused of swindling investors. McConnell was indicted in 1987 and he killed himself in the Harris County Jail in July, 1988
The explosion of the Challenger on January 28, 1986, put NASA’s flight schedules on a prolonged hold.
The owners of KTRK TV, the Capital Cities chain, bought the ABC television network in 1986. The city of Houston upset environmentalists by buying 1,432 acres of prairie in Wailer County for a proposed fourth airport. The price of the land, south of I-10 West between Katy and Brookshire, in an area much favored by migratory geese, was $5.7 million.
Billy Reagan retired in 1986 from his position as Superintendent of the Houston schools and the school board picked Joan Raymond, superintendent of the Yonkers system in New York to replace him. Dr. Raymond was the first woman to head the Houston district.
Both the surviving Houston daily newspapers changed hands in 1987. Houston Endowment sold the Houston Chronicle to the Hearst Corporation. The Toronto Sun sold the Houston Post to Dean Singleton’s Media News Group.
Dr. Paul Chu of the University of Houston achieved overnight fame with a breakthrough that could lead to development of a conducting material with no resistance to electricity.
Joske’s sold out to Dillard’s and disappeared from the Houston scene in 1987. Dillard’s closed some of the stores and changed the name of the others.
The Texas Medical Center demolished the Shamrock Hotel in 1987. The center had bought the hotel and grounds from Hilton in 1985 and then determined that the hotel building could not be converted to serve its purposes. The parking garage and the Grand Ballroom were saved. The swimming pool was covered with a parking lot.
The theater that was being called the Lyric when it was in the planning phase got a new name when the foundation established by insurance magnate Gus Wortham made a large donation to the building fund. The Wortham Theater was completed and opened in May, 1987. A new art museum was completed the same year on Sul Ross in the St. Thomas University neighborhood to house the treasures collected by Schlumberger heiress Dominique de Menil and her husband John.
Respected old Texas banks were buying each other and merging to try to avoid being swamped by loans they could not collect. Bank of the Southwest merged with Mercantile of Dallas to become M Bank in 1984. The venerable Texas Commerce sold out to Chemical of New York in 1987. United Bank and Western Bank both failed in 1987 and First City was reorganized with federal assistance. RepublicBank merged with Inter-First in 1987 to become First Republic.
Loans he could not pay off forced former Governor John Connally into bankruptcy in 1988. The Connally's raised $2.5 million for their creditors by selling their personal possessions. John and Nellie Connally attended every session of the auction at Hart Galleries, visiting with the bidders and buyers.
The last downtown skyscraper built before the end of the boom bankrupted the developers who had paid the highest price yet for downtown property. A partnership including the Michigan State Employees Pension System bought the Heritage Plaza on Bagby for a reported $110 million in 1988, rented most of it to Texaco in 1989 and changed the name to Texaco Heritage Plaza.
Merger did not save First Republic Bank. The new company failed in July of 1988 and NCNB Corporation of North Carolina took it over with federal assistance. The Houston Astros balked at his asking price and declined to offer Nolan Ryan a new contract in 1988. He went on to greater fame and bigger paychecks with the Texas Rangers.
Mayor Whitmire appointed former Highway Commission Chairman Bob Lanier to chair the Metro board in 1988. Voters the same year approved Metro’s Phase Two Mobility Plan including a rail line.
Defense attorney Percy Foreman died August 25, 1988 at the age of 86. Foreman grew up in Lufkin where his father was sheriff. Watching trials convinced him he should be a lawyer. He started work in Houston as an assistant district attorney but soon switched to defense work and became a star. Cases he tried always drew crowds of spectators. He gained a national reputation for getting defendants acquitted, so people in serious trouble beat a path to his door and made him rich. He never denied that his fees were high. He often said, "My fees are their punishment." But he also defended people without money and from them he accepted whatever they had. He ended up with more jewels, houses, and cars than he could count. The criminal courts in Harris County shut down for Percy Foreman’s funeral.
His cherished Shamrock Hotel was shut down and gone when the once flamboyant wildcatter Glenn McCarthy died on December 26, 1988, 81 years and one day after he was born.
The Houston Chamber of Commerce had become the Greater Houston Chamber of Commerce by the time Eileen T. Crowley became president in December, 1988. She was the chamber’s first female president. The chamber merged with the Economic Development Council in 1989 to form the Greater Houston Partnership. The Houston World Trade Council joined the partnership in July, 1989. All three organizations still exist as divisions of the Greater Houston Partnership.
Bank failures continued. M Bank became insolvent and was reborn as Bank One, still occupying the original Bank of the Southwest quarters on Travis.
Panhandle Eastern took over Texas Eastern Transmission in a $3 billion deal in February, 1989, and sold off the Houston Center development in December. The buyers were JMB-Houston Center Partners. Panhandle Eastern had started in Kansas in 1929 and moved to Houston in 1967.
Congressman Mickey Leland was killed August 7, 1989, in a plane crash in Ethiopia. State Senator Craig Washington won the special election to succeed Leland in the district originally represented by Barbara Jordan.
An explosion and fire at the Phillips plant in Pasadena killed 23 workers in October, 1989, and the first of the famous Houston oil well firefighters died the same year, at the age of 100. He was H. L. Pat Patton. He had started his career in 1929.
The Wyndham Hotel chain took over the Warwick Hotel and started another renovation in 1989. John Mecom, Jr. had surrendered the hotel to his creditors in 1987.
The city council imposed admission fees at the Hermann Park Zoo for the first time in 1989.
Houston got a new passenger train service in 1989 when Franklin Denson, with a lot of support from Galveston interests, started running the Texas Limited between Houston and the island, on weekends. But commuter rail proposals continued to generate controversy. During the mayoral election campaign in the fall of 1989 when Mayor Whitmire was being challenged by former mayor Fred Hofheinz, Bob Lanier let it be known that he was not enthusiastic about Metro’s rail plans. He talked about resigning from his post as Metro chairman. Mayor Whitmire and her supporters persuaded him to stay. With this apparent vote of confidence, Lanier then forced the resignation of Metro’s pro-rail general manager, Alan Kiepper. But Mayor Whitmire fired the last shot in this skirmish, after she won reelection. She let Lanier know he was not going to be reappointed to the chairman’s job. Lanier quit. Kiepper got a better job as head of the New York transit system and the Metro rail plan was still alive.
A trivia question making the rounds after the 1989 city election was "Name the only living ex-mayor Kathy Whitmire has not beaten." She defeated Jim McConn to get elected the first time in 1981. She beat back a challenge by former mayor Louie Welch in 1985. C. A. Neal Pickett was the only living ex-mayor who had never opposed her and he died March 22, 1990. Pickett had served one term as mayor, 1940-1942.
Two black women won seats on the city council in the election of 1989. Sheila Jackson Lee was elected to a seat that had been occupied by black men since 1979. Beverly Clark defeated a white male council member, Jim Westmoreland.
