We both recognized that there was a need for modern office space in Denver and agreed on the idea of the modern skyscraper. I had Pei draw up the plans, but the Korean War prevented us from immediately getting to work on construction. Boettcher and I kept in close touch on overall plans, however, and Arthur G. Rydstrom, one of his senior vice-presidents, and heir apparent, was also brought into our planning. It was not until 1953, however, that we were lined up and ready to go with a new office building. Then I received a startling jolt and setback. Pei and I had, from the beginning, designed our building for steel. It turned out that Boettcher, who was head of the local cement industry, wanted it in concrete, but by the time this came out it was too late to make a change. Boettcher said, "Much as I like you, and I am going to grant that you were not sufficiently aware—and maybe I was stupid, I didn't watch the plans—but as head of the cement industry, I can't be connected with a steel building. I can't go on with it. I'll buy you out, or you buy me out." This being the case, I named a price; he could buy or sell. He decided to sell, and I took over.
That is the official story. It is the explanation that Boettcher gave to me and which he later gave to the press. I was both fond and respectful of Boettcher, who stood head, shoulders, and barrel chest above the provincial crowd around him, but he was a strong Denver man with local ties and was exposed to local prejudices and pressures. Many years after this event, and after Boettcher's death, I heard that some people who were quite close to him were much against his involvement with me and with Webb & Knapp. But if this or other factors contributed to his decision to bow out of our partnership, I never knew of them. Though we had no further business connections, we remained friends, and when he died in 1957, I felt a loss. I also got a surprise, for the man I had assumed was a vigorous sixty-four when I met him in 1950 had been an even more vigorous seventy-five and had died at eighty-two.
It was in April, 1953, that Boettcher broke up our combine. Moving ahead on our own, we broke ground for the new building in May. To carry on the project, I turned to the George A. Fuller Construction Company of New York, who joined me as a partner. We finished that building ahead of schedule in July, 1955, and what we turned out was, and is, one of the finest architectural projects in the country, which, in part because of its special emphasis on site planning, won all manner of awards. The building was a lovely, clean-lined thing on stilts, which instead of the usual shops, stores, and entrance corridors on the ground floor, provided an open lobby which seemed part of the open courtyard on the north side of the main tower. Situated at the base of a moderate slope, this court was terraced. Fountains, a reflecting pool (in which we placed live trout), and walkways eased the way for both the eye and spirit of passersby. Alongside the main tower and at the level of the upper terrace we placed an open-structured office building under a wide, arched roof. We completely rebuilt a three-story building that fenced in the north side of the court so that it harmonized with the whole, and wound up with a pleasing combination of structures, public places, and walks. It was an office complex much ahead of its time that has withstood time's passing.
We paid a price for this pioneering. When it came time to finance the basic mortgage for Mile High Center, we were penalized for not having rental properties on the ground floor. The local realtors who were doing the appraising for the insurance companies we turned to for financing, just could not bring themselves to understand how a building that had terraces rather than stores on the ground floor could more than make up for this loss of rental space by charging higher rentals for the upper floors. They could not believe that there was prestige connected with having offices in a beautiful building. In Denver, as elsewhere, we eventually proved that beauty can be good economics. We got an unheard-of $5.85-per-square-foot rental for the two top floors, and even at this writing Mile High Center boasts one of the lowest vacancy ratios in town.
As Mile High Center neared completion, it became a favorite spot for Denverites to point out with pride to visitors. One block away and to the west, on Court Place, they could see and point out something that, in its way, was equally impressive. This was the five-story, sixty-five-foot-deep hole in the ground which we had dug out for Court House Square and which we were having trouble getting filled. But that is another story.
▪ 10 ▪Filling in Court House Square
IT TOOK Webb & Knapp four years to get control of Court House Square, and for almost five years after that, from 1950 through 1954, we ran it as a parking lot. This delay in construction was due to the Korean War and to our being drawn into the development of Mile High Center. Because of our partnership with the financially powerful Claude Boettcher, I expected to have little difficulty in eventually developing Court House Square, but one unexpected result of these delays was that Webb & Knapp became one of The Denver Post's favorite targets.
Every local newspaper cherishes at least one issue which is both safe and popular to attack. For the Post's sharpshooters on nearby California and Fifteenth streets, we provided an ideal target. Each year we did not build on Court House Square, we were obliged to pay a $25,000 surcharge to the City of Denver for not having started construction. The $90,000 in yearly revenues from parking more than covered this annual charge, so we paid the fine and played for time and took the editorial consequences. On long winter afternoons, when lacking other distractions, the editors of the Post could always create a little excitement by firing a broadside at the stationary target of Court House Square. "Let's Have the New Building," said one of the early and more moderate editorials of 1951, but this was merely a ranging shot. With practice the California Street snipers became more and more lively and imaginative in their efforts. After a series of demands that the mayor take action against our delays at the square, Post editorials with such titles as "A Good Square Deal," "Operation Peeled Potato," and "Dreams of Glory" kept fitfully agitating for a people's war against us. I especially remember one long and richly sarcastic editorial titled "Parking Lot Bill." This last editorial, which by some coincidence appeared just a month before the formal announcement of our breakup with Boettcher, spoke of me as "Parking Lot Bill," the air-castle builder. Commenting that I had turned down a reported two million dollars for the property, which the Post felt should never have been sold in the first place, they went on to say I had picked it up for a mere $818,000 and furthermore had not fulfilled my commitment to build. The editorial went on to note that perhaps in two more years, when Mile High Center was finished, "Parking Lot Bill" would get around to building Court House Square. It would take another four years, they said, to have something visible on the ground that had so trustingly been sold to me. "We can't wait," said the editorial in closing.
I had long since learned to put up with a certain amount of scoffing, but as I am a man who likes to get things done, I was more upset by the delays we were faced with at Court House Square than by any of my critics. Meanwhile, I was in the midst of complicated transactions in Denver, which were the result of the sudden breakup of my association with Boettcher. Coming at the touchy time it did, that last editorial hurt, but there was nothing very dramatic I could say or do. We carried on with the construction of Mile High Center; I announced that we would begin construction at the square by 1954, and redoubled my now single-handed efforts at setting up a workable situation for the square.
What we needed for that square was a large department store, a magnet to pull shoppers out of their old shopping habits and walking patterns downtown and put them into new ones around our property. Part of our problem, however, was that there were three such people-pullers already in existence in Denver. One was the Denver Dry Goods Co., four blocks below Court House Square at Sixteenth and California streets. Two blocks below that, at Sixteenth and Champa streets, was a May Company store, and Daniels and Fisher lay yet another two blocks downtown, at Sixteenth and Arapahoe streets. Together these three establishments defined the east-west axis of Denver's shopping district and threatened dangerous competition to any newcom
er moving into the far edge of things at Court House Square. Although I had persuaded Macy's and, later, Gimbels to set up branches at our new Roosevelt Field shopping center on Long Island, neither they nor any other major chain was interested in opening a store in Denver. Neither were any of the local stores willing to move to our site. I was blocked in all my moves. That is, I was blocked until I broke from the established pattern of play by taking a gamble that solved two problems and set Denver businessmen agog.
I bought the Daniels and Fisher store.
Daniels and Fisher, known throughout the region as Denver's quality store, catered to those with taste and money. It was to Daniels and Fisher, for instance, that well-to-do ranchers from as far away as Wyoming, Montana, and Idaho might bring their families once or twice a year to stock up on a thousand dollars' worth of goods. But Daniels and Fisher, a Neiman-Marcus without oil in its backyard (or flair in its front office), was beginning to falter, partly because of its poor location. Though the store had helped pioneer the original southeastward growth of Denver by moving in 1875 to what was then the edge of town, more than seventy-five years had now passed. Even in slow-paced Denver there had been changes. Daniels and Fisher was now the lonely western anchor of top-level real-estate locations and was being hurt by the decaying properties around it. The store's uninterested third-generation owners lacked the talent or drive to stay in control and make changes. But by moving to Court House Square, Daniels and Fisher would be able to leapfrog past its competition and into a new place of prominence. A move by this store from one end of Sixteenth Street to the other would shift the polarity of Denver shopping patterns as surely and swiftly as a moving magnet under a map of Denver would shift scattered iron filings through its paper streets. It was for this reason that I bought the store.
Control of Daniels and Fisher cost roughly 1.6 million dollars in cash, which I raised in New York. Then, in mid-1954, having negotiated a lease for Daniels and Fisher at Court House Square, I got my cash out by selling to a combine of Midwestern purchasers: Jerome Nye and Younker Bros., who operated stores throughout Texas and the Midwest. The new owners had both the capital and the managerial talent to run a competitive enterprise, and I, for the price of a little effort and ingenuity, had solved two problems: I now had a tenant—and a favorable pattern of pedestrian traffic for Court House Square.
I was very pleased with our prospects, because back in New York I had already arranged with the Statler Hotel chain for their leasing and operating a seven-hundred-room hotel in Denver, the hotel and department store to be built back-to-back on Court House Square. Things were looking so good for the square that I planned to have the project finished by the end of 1956 or early in 1957. After that it would be good-bye to Denver and on to the dozen other projects which I had in mind or were already under way.
One of these "other projects" was acquisition and operation of the Statler Hotels, whose management I had negotiated so successfully with as regards Denver. The Statler chain, another closely held company with absentee ownership, had been quietly on the market for some time. Our takeover talks with management had gone so well that we had agreed on price—seventy-six million dollars, or fifty dollars per share—and I had lined up sources for the necessary funds. The deal, already known to the press, needed only a formal stockholders' approval, which was less than a week in the offing, when Conrad Hilton and a group of backers intruded. Moving swiftly and silently on my flank, they bought half the stock in the hotel chain, at the same fifty dollars per share, by dealing directly and secretly with a key number of owners, trustees, and heirs. Rather than get into a stock fight, I wired Hilton congratulations on his maneuver and urged that he keep the excellent management already running the hotels. Later I tried to purchase the Statler chain from Hilton for eighty-six million dollars, which would have given him an immediate ten-million-dollar profit, but he turned me down. I tried to get him to go ahead with the Statler plan for a Denver hotel, but here, too, I was rebuffed. The net result for Denver was a ceasefire on further developments till we could find a hotel, but true to my promise, we began to dig in Court House Square.
Toward the end of 1954 we put up a fence and began excavating the ground in part of Court House Square. The really serious digging got under way in 1956, at which point, with Mile High Center completed, the more than six acres of the square looked like a very promising bomb crater. We kept digging through 1956, during which time men working on three-shift basis had pulled out 421,000 tons of material, and in the course of all this digging we had a little fun.
At first the engineers had recommended that we drive sixty-foot piles into the ground for our building supports, because the square, situated over a prehistoric stream bed, was sixty feet or more above bedrock. They suggested piling because it would cost only one million dollars to drive piles, as against three million to excavate. But I had them test-core the fill for sand and gravel that we might use for our concrete and for the prefabricated mosaic surface of our buildings. It turned out that if we used our own material, we could save one million dollars in construction costs. This meant excavating would really cost only two million, while at the same time opening up an enormous space beneath the plaza for a profitable garage. Thus demonstrating the difference between an engineer and an entrepreneur, I told them to excavate, but since we were in Rocky Mountain gold country, over an old creek bed, I also had them test their core samples for gold. If they found gold, we could run it through a sluice while washing off the fill for its sand and gravel. They did find gold. We announced discovery of a small gold-bearing stratum of sand under the square, and this brought on a two- or three-day furor that must have had the old-time miners roaring in their graves. Denver's new mayor, Quigg Newton, immediately announced that any gold under the square should belong to the city. The next day the town district attorney jumped up to second this claim, and I, playing my part, publicly warned off any and all politicians and claim-jumpers. Then, of course, I cautioned local citizens not to start digging up their backyards unless they needed the hole, because we really weren't getting much gold from the site. Things quieted down. In all, we got fifty thousand dollars or so from our "mine," and I got one good nugget, which Marion had a duplicate cast from. I use these now as cufflinks and am no longer sure which is the original.
But as we poured the foundations for the square, which gradually rose toward ground level and above, the department-store deal I had so foresightedly arranged with Daniels and Fisher became unglued at the edges.
The post-Korean War recession had arrived, and the new owners at Daniels and Fisher were worried about expansion into a new store at Court House Square. I kept on building the store while looking about for some solution. I thought a merger between two Denver stores might be the answer, but the men who controlled the Denver Dry Goods Co. were reluctant to give up their good location. The May Company seemed even more set against a merger deal, but a refurbished and relocated Daniels and Fisher store under new management was a loaded gun pointed right at the heart of the May Company store, which would be left as anchor store in the "old" downtown. And, as I had made it my business to learn, the May Company had been busily branching out over the country and was now facing special difficulties. In the wake of recent expansions, the aggressive management at the May Company were discovering that bumping hard against entrenched, locally owned stores, in the farm belt, could be very painful. Younkers, meanwhile, bothered by the May Company incursions in Iowa, were nervous about future lumps they might take from their Daniels and Fisher incursions into Denver. It was an interesting case study of strategy, tactics, and painful stalemate in geographical warfare, which I eventually resolved for both parties. After a series of negotiations the May-Younkers confrontation was eased, when the May Company, raising the white flag in Iowa, gave up its store there to Younkers. Younkers, in turn, allowed the May Company to take over the Daniels and Fisher store in Denver. As part of the deal, the May Company, once it merged with Daniels and Fisher, would
move into Court House Square. Webb & Knapp would take over both the old Daniels and Fisher and the vacated May Company properties in the same way auto dealers take in second-hand cars as trade-ins.
The May Company, recognizing that my own needs for a lessee were urgent, proved very tough bargainers. Though the shell of the new department store was now seventy-five-percent complete, they whittled down the terms of the lease, added to the costs of the building and by demanding more space than we had planned for the original Daniels and Fisher building, necessitated a basic change in plans for the square. Instead of having a hotel and department store back-to-back, we now had to plan for a five-story department store situated across the street from the hotel on Court Place and connected to the hotel both by an underground tunnel and by a covered overpass. Another proviso of the May Company deal was that we could not lease their old building to another department store.
On the other side of the coin, we now had a very powerful retail operation going for us on Court House Square and an arrangement whereby we would share in the profits from the new store. My only problem now was that of getting a hotel under way in the square, but when I say only problem I mean my only problem in Denver.
Elsewhere, I was involved in dozens of activities which I hoped would result in Webb & Knapp's becoming the greatest and most productive real-estate company in the world. These non-Denver activities were so extensive, numerous, and important that Denver can be properly viewed only in perspective with all of Webb & Knapp. Every single year, regardless of whether our operations in Denver moved ahead or were delayed, the firm of Webb & Knapp, as I shall show in the subsequent chapters, grew, changed, and was active, literally all over the map. Suffice for now to say that many of our deals were interrelated.
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