How a Dallas-led 'dream team' made sale of Texas' fabled W.T. Waggoner Ranch a reality

Mar 24, 2016 @ 10:50 AM

DALLAS - Selling the fabled W.T. Waggoner Ranch was the deal that wouldn't get, couldn't get done.

But Dallas real estate broker Bernie Uechtritz knew that he could.

Two and a half years ago, the Briggs Freeman Sotheby's International Realty adviser came up with a Hail Mary marketing plan to keep the 535,000-acre ranch off the auction block.

He put a $725 million price tag on the largest U.S. ranch within a single fence and joined forces with Lubbock real estate broker Sam Middleton. Together they pitched the aura and mystique of the almighty Waggoner to the ends of the Earth.

This was, after all, the historic estate where so many Lone Star traditions, folklore and economic wealth took root.

Think rodeo, quarterhorses and thwarting cattle rustlers. Founder W.T. (Tom) Waggoner discovered oil looking for water. Word has it that he was disappointed.

More than 900 would-be buyers came calling. A half dozen paid $15 million to submit a bid.

And on Feb. 10, the once-warring descendants of Tom Waggoner inked a deal transferring ownership of the legendary estate to billionaire Stan Kroenke, owner of the Los Angeles Rams and Denver Nuggets. The sale vaulted Kroenke into the No. 5 spot among landowners in the U.S.

"This was never a dollar-and-cents proposition," said Uechtritz a 51-year-old GQ cowboy with an Aussie accent. "I'd committed the cardinal sin of what no Realtor should do: Fall in love with the property you are selling. I was bound and determined to find the right steward and caretaker for the next century or two.

"Stan Kroenke provided that fairytale ending."

You could say that saving the Waggoner started with a bush boy's love of John Wayne.

Bernie was the eighth of 11 children in the Uechtritz (pronounced you-tridge) family in New Guinea. One Saturday a month, the family would load up in their dusty Ford station wagon and head to a movie house 40 miles away to see a double matinee of The Duke.

Bernie wanted to come to America, the land of cowboys and war heroes.

Instead of going into the 11th grade, he went to Longreach Agricultural College in Outback Queensland, where he learned to rodeo and manage sheep and cattle.

By his 17th birthday, he was overseeing a cattle, coconut, cocoa and palm oil plantation in New Guinea while jockeying thoroughbred racehorses and playing polocrosse - lacrosse on horseback.

He came to Kentucky in 1989 when he was 22 and got his real estate license in California four years later.

In 1994, Uechtritz cold-called the lawyer for the Jose and Kitty Menendez estate wanting to list the murdered couple's Calabasas, Calif., home. "It wasn't the house that they were killed in, but it was stigmatized - bad karma and all that," Uechtritz said. "It sat on the market for five years, and I sold it in three months."

Coming up with a game plan for white elephant properties became his forte.

The W.T. Waggoner ranch was nothing short of that.

The property spans six counties and covers almost 800 square miles - the size of Los Angeles and New York City combined. Its assets include thousands of cattle, hundreds of horses and oil wells, and 30,000 acres of farmland.

It had been in limbo since 1991, when Buck Wharton, grandson of Tom, launched a fierce legal battle to keep his relatives from selling the estate.

Most people had given up on the idea of an amicable private sale.

In June 2011, the court appointed Mike Baskerville, a local attorney, as the second receiver to be tasked with selling the monumental ranch.

"When Judge 1/8Dan Mike3/8 Bird appointed me, you could have held all of the people who thought I could get this thing sold in a Volkswagen Beetle," said the 67-year-old. And he would have been the driver.

Baskerville focused on an auction, since he had absolutely no reason to believe that Buck Wharton would back down.

"Bucky had said publicly that he would spend his personal fortune to fight a sale as long as possible," Baskerville said. "And he had spent many, many years, going back to 1991, doing just that."

Baskerville began the daunting task of getting the property prepared for a forced sale. The ranch had been owned by the family since 1849.

"No one knew for sure how many acres were in the ranch," he said. "There were some estimates, but the ranch had never been surveyed. There was no legal description."

He and his law firm, Jackson Walker LLP in Fort Worth, arranged for the ranch's first-ever title search and title insurance. "Back in the day, people didn't pay a lot of attention to the niceties of deeds and records. It was a project where we wrote the book as we went."

Baskerville interviewed international real estate and auction companies before settling on a consortium of big international players. Bird was set to rubber-stamp confirmation on Nov. 20, 2013.

That imminent threat of an auction that could have split the ranch up in pieces gave Uechtritz the opportunity he was looking for. He'd been haunting the courthouse and bombarding family attorneys with calls for six months trying to get an audience.

Buck Wharton's Fort Worth attorney Glen Johnson was the first to hear him out. Uechtritz met with him armed with a "stalking horse bid" - an offer that showed that they could get at least $550 million in a private sale - and an international marketing plan that brought the clout of Sotheby's with him.

"Buck and his kids looked at the situation and decided the fight's over," Johnson said. "That gave us the go-ahead to do something better."

The day of the confirmation, Uechtritz met Lonny Morrison, the other family attorney, at 5:30 a.m. in the Wal-Mart parking lot in Vernon, about 50 miles northwest of Wichita Falls, and handed him the marketing plan and the stalking horse bid.

Uechtritz had breakfast at the local diner, went to Roy Orbison's birthplace for good luck and then hightailed it to the courthouse.

"I stood outside and watched as members of the consortium who'd flown in from around the country took pictures in front of the courthouse and high-fived each other," Uechtritz said. "There were about 16 of them all in their black suits thinking it was a bloody done deal."

Instead, the family attorneys approached the judge and asked to meet him in his chambers. When Bird came out, he thanked the wanna-be auctioneers for their interest and sent them packing, saying the shareholders and trustees had decided to try a private sale instead.

Then Uechtritz had to persuade the families to hire him. He came up with a price that turned their heads.

To get to $725 million, he started with a per acre value from recent ranchland sales and added a premium for the size of the spread and its global mystique. Then he valued each of the ranch's five operations - cattle, horses, oil, farming and water - as separate businesses, down to the last plow, screwdriver and roll of duct tape.

Baskerville approved hiring Uechtritz provided that Middleton, principal of Chas. S. Middleton and Son, was added as a second broker because of his extensive experience in ranch-land sales.

"We had what I call the kumbaya hearing," Baskerville said, "where everybody announced that the parties had in fact agreed to a sale and that the property would be marketed through these brokers."

The court approved Uechtritz as a representative of Sotheby's and Middleton as exclusive listing brokers on Aug. 6, 2014.

Uechtritz spent that night in the presidential apartment of the Waggoner Estate headquarters. "I talked to all the Waggoner portraits on the wall. I felt a real power."

The next morning, Uechtritz and Middleton set about to sell the ranch to the four corners of the world.

"We were on mainstream media," Uechtritz said, "print and digital in 120 countries and in 40-something languages. We were in Vanity Fair in France and Sky News Network in Europe. But having a great marketing strategy is a double-edged sword. When you go out to get everybody in the world who might possibly be interested, you get everybody in the world who might possibly be interested. You have to sort through the sawdust."

In January 2015, pre-qualified buyers from China, Russia, the Middle East, the U.K., Germany and Australia began to swoop into town.

"That ranch had a lot of billionaires go through it in the past year or so," Uechtritz said. "It's the kind of property that brings these kinds of people out of the woods."

A South Korean billionaire flew from Seoul into Dallas-Fort Worth International Airport, took a helicopter, spent three days with his team touring the property by air and land and poring over records in an extensive data room set up in the Waggoner Estate Building.

That's not easy to hide in a town of 11,002.

Uechtritz discovered that the best way to keep a secret was to create divergent rumor of his own. "Whenever I wanted anything to percolate around town, I would have a cup of coffee with the guys at the coffee shop. Like all good rumors in small towns, they spread like wildfire."

At one point, townsfolk were too close for comfort about Kroenke. "So I'd say things to them like, 'You'll really like the new owners as soon as you get used to the accents,'" he said with a grin. "That would make them crazy, because they knew we'd had a lot of foreign buyers through town."

Joel Leadbetter, Kroenke's broker at Hall & Hall in Bozeman, Mont., had been trying to sell the Waggoner since 2002. He'd had several contracts that had fallen through.

"When it became listed, Stan and I talked about it, and he decided he wanted to look closely at it," Leadbetter said. "So away we went."

Leadbetter took Kroenke to the ranch in April. The first day was spent touring the ranch. The next day they saw it from the air, giving a better sense of size and scope.

"Stan was intrigued with the land, its enterprises, its history and legacy in Texas," Leadbetter said.

On Sept. 1, Uechtritz and Middleton made an official call for bids that needed to be turned in by October. As Uechtritz is fond of saying, it was time to "herd the cats down the alley to the finish line."

Six buyers put up $15 million cashier's checks. "It sorted the men from the boys, the real from the not real," Uechtritz said.

In mid-October, four finalists - including Kroenke and the South Koreans and ranch and oil consortiums - were invited to the downtown Fort Worth offices of Jackson Walker to pitch their proposals to the shareholder families and estate trustees.

Kroenke checked all the boxes: price, financial resources, conservationist mindset and respectful treatment of his other ranches. The shareholders and trustees unanimously decided to move forward with him.

Both sides describe the next four months of negotiations as difficult and time-consuming but civilized.

"The key to this whole transaction is that all of the principals were absolute gentlemen and ladies through this whole process," Leadbetter said. "They kept us all on track and where we needed to be."

Kroenke and his entourage came to Vernon for the signing and to meet with employees.

Kroenke, Buck and Buck's son and daughter spent the entire day before the closing driving through the ranch. Buck drove, and Stan rode shotgun.

"It was a huge bonding event," Johnson said. "Buck, Bradley and Brooke learned a lot about what Stan's ideas were, and Stan learned a lot about the history of the ranch."

So what's Kroenke going to do with Waggoner Ranch?

"Everybody's going to have to give us a chance to get our arms around this thing and figure out the best direction to head," said Sam Connolly, general manager of the U.S. division of Kroenke Ranches in Bozeman. "But I will tell you straight out, development is not something we do on these ranches."

Leadbetter agrees. "I started with Stan in 1993 and have helped him with many of his transactions, both here and in Canada," Leadbetter said. "Stan has never sold an acre - not one."

Just what Kroenke paid is still a closely held secret.

But when you piece together innuendo, it seems that the family came off the asking price, but probably not that much. The selling price was certainly more than that $550 million stalking horse bid.

"Keep in mind," Baskerville said, "when (the $725 million asking price) was set, oil was much, much higher. At the time, we'd had some offers that were not that far off from that number. When you're selling something, you don't start off with your low-ball price. We wound up getting a significant value for the ranch."

Asked whether the Whartons are happy with the selling price, Johnson said, "I don't think the word happy is going to ever apply to my people. But I will say this, they were satisfied that the marketplace price had been established, and the market price was paid."

According to public documents, the agreement called for a 3 percent commission to be split evenly among the two selling brokers and the buying broker. If the ranch sold for, say, $625 million, Uechtritz, Middleton and Leadbetter got $6.25 million apiece with a portion of that going to their brokerage firms.

The brokers say they earned every penny of it. They also said it took a "dream team" of three disparate personalities and backgrounds to make it happen.

Uechtritz felt the need for closure, so he suggested an intimate cocktail reception at the W.T. Waggoner Room of the Red River Valley Museum in Vernon after the last papers were signed. The family, Kroenke and his entourage, the brokers and the lawyers all gathered to mark the occasion.

"The theme of the night was e pluribus unum - out of many, one," Uechtritz said. "It was the biggest deal ever and a historical one. It would have been a real bloody shame to simply sign papers and have everybody go their different ways.

"Had that happened, the wounds of the past might have been left open and everyone who worked on the transaction would have felt a sense of deflation."

By all accounts, it was an emotional, cathartic and spiritual moment - not unlike a memorial service for a life well lived.

One by one, a half dozen key players gave short speeches in front of a massive Art Deco mural about the ranch and its history.

"There wasn't a dry eye in the house," said Johnson, who's been on this journey every step of the way with the Whartons.

They toasted with premium Texas whiskey labeled with the Waggoner reverse-triple-D brand.

"It's been a long, arduous process," Morrison said. "My clients have strong emotional attachment to that property and the legacy of that ranch. What actually happened was something that very much needed to happen. They're saddened by the circumstances that required that result. But they're pleased to have it behind them."

Connolly, who oversees Kroenke's vast U.S. ranch holdings, studied the mural as he walked up to speak.

"Right then, it wasn't just another deal," said Connolly, who's helped guide Kroenke's purchases of 1.6 million acres of ranchland in Montana, Wyoming, Arizona and now Texas. "My thoughts were about keeping the Waggoner tradition and running it accordingly. There will be some improvements. We don't know what yet. But it wasn't just another deal anymore. I realized Stan had just bought a piece of history."

NEED TO KNOW

Bernie Uechtritz

Title: International real estate adviser to Briggs Freeman Sotheby's International Realty in Dallas.

Age: 51

Grew up: New Guinea

Resides: Parker near Southfork Ranch, Texas

Education: Boarding school through 10th grade, one year of agricultural college

Personal: Married to Annie for 18 years. They have three daughters, 26, 22 and 15, and a son, 17.


Read more here: http://www.miamiherald.com/news/business/real-estate-news/article66598932.html#storylink=cpy

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