How did Frost Bank become involved in the original underwriting campaign?
The bank itself was not apart of the campaign, I was and the bank underwrote just to make that clear the process was quite interesting. Bill Sinkin called a meeting of several business leaders and said our U.S. Congressman Henry B. Gonzales would be glad to carry a bill for a federal pavilion if San Antonio would like to have a celebration for the the city’s 250th anniversary in 1968. Several of us thought it would be a great idea, his big picture thought was Seattle had just hosted the 1962 World’s Fair and would like San Antonio to host a World’s Fair as well. He talked about how our city was in the middle of the two confluences of civilizations: the Anglo and the Hispanic and the city would be the place to have a Fair and honor the confluence of the Americas.
During the meeting we thought it would be worth while and felt the best way to start was to look at Seattle and their Fair which was quite successful. From that we learned their genesis was an economic study created by Economic Research Associates out of Los Angeles, so we contracted them to carry-out the same study for a World’s Fair in San Antonio which was financed by the clearinghouse banks in San Antonio. Once the study came back with positive results the banks reviewed the study where one of the keys on how Seattle did theirs was their banks provided loans to fund construction and the loans were guaranteed by local businesses. In the end it was decided that we would follow the same plan and every bank (approx. 26 at the time) signed on. The Fair corp. allocated underwriting according to capital and they also would not participate as a loan but give as a business their share of the underwriting. So the Frost Bank was one of several downtown banks who paid for the study and when the study came back was also in the group of banks who agreed to be in the line of credit for the first of three underwriting’s to provide San Antonio Fair, Inc. with an initial line of credit and that we would guarantee it ourselves. After that I was a part of the group which went out asking businesses to be apart of the underwriting and one of the things we told them was that their bank was already an underwriter so they could talk to their bankers about the reasonableness about participating and feel more comfortable about signing on. Along with Marshal Steeves who at the time was the head of the finance committee and several others we raised seven million dollars from local businesses.
You mentioned HemisFair ’68 had three underwritings, what can you tell us about the second & third?
The financing went along and what happened was we used-up the seven million dollar line of credit and needed more money. This was mainly because the Fair had expanded greatly beyond the original numbers in the feasibility study resulting in more expenses and we also were not hitting the daily average 40,000 admission tickets sold. There was a stipulation in the first underwriting that a percentage of each admission ticket sold would be put in trust to repay the original seven million dollar loan, as a result we needed a second underwriting campaign which was headed by our treasurer Bill Flanery. I can not remember the exact amount needed but it was done based on people being given tickets in consideration for their underwriting, one of the biggest ticket holders was a local contractor named Cosmo Guido who was the largest construction contractor on the Fair. He joked about having had a pick-up truck to go an pick-up the tickets, unfortunately that campaign was not adequate. Around the same time we had some internal issues where both Bill Flanery and Forest Smith almost left and our general manager by the name of Dingwall actually walked out one afternoon.
At this point the Fair had been open for a few weeks and the concern was that we would not have sufficient funds to meet an upcoming payroll due in a week or two. So my father called a meeting of half dozen of the major underwriters in his office here at the bank; including H.B. Zachary and the McDonna brothers who owned the quarry area where Six Flags Fiesta Texas and the Rim shopping area is now. At one point my father asked Mr. Zachary on behalf of the group if he would come in and take over the operation of the Fair with full authority to run it his way. Here I was a young guy sitting in a corner of my father’s office and I’ll never forget his reply. ‘Yes, Tom”, he said to my father then tuned to me and said: “If your son Tom will raise the three million dollars we will need to meet the payroll and keep the Fair open”. So I’m sitting there gulped and everyone is looking at me and my father says “Will you do it”, and I said “well of course”. So there I was back in the financial picture.
Afterwards Mr. Zachary and I went back into my office and talked about how to raise the funds. At one point I said, “Ok, we will need to meet with every underwriter and just make a clear story that we are in a ditch and need more funds, otherwise we may have to close HemisFair a third of the way into the six month run”. Over the next week I had several meetings with many of the underwriters and every one of them signed up knowing full well that they would loose 100%. Once the funds came in we paid part of the original seven million dollar underwriting and part of the second underwriting, naturally everyone knew we could not pay anything on the third but it kept the Fair open.
Were there any issues after Mr. Zachary came in to manage HemisFair?
One story was during the same meeting I had with him after my father asked him to take over the Fair. A woman from the Fair’s office came in and said “Mr Zachary, we need you to know that Marshal Steeves (President of San Antonio Fair) is over in the Fair’s press section stating that you are coming to manage the Fair as Chairman of the Board with the funds needed to keep HemisFair open”. All he said was “Thank you”, after she left I said “Mr. Zachary I am going to tell you something you probably do not want to hear, I hope you will agree that if asked about funds that you will have to lie to the press and say that you already have it as to not start a panic”. He agreed went over to the fairgrounds and spoke with the press and to my relief they never asked him. The amazing thing about Pat Zachary is with his expertise they never thought funds (or lack there of) was ever an issue, in the end he never had to lie about not having the funds yet and that I would be working on getting it in the coming week.
What was the overall feeling of the Fair by the underwriters after the six month run was completed?
Positive. I was involved as all the banks were in the effort to collect on the three loans which were backed by the businesses of San Antonio. It was mostly handled by the Bexar county banks I think there was only one who refused to pay, actually it was his estate, but the minute we filed in court they sent a check. I am going to say that every underwriter gladly paid because they felt the city was transformed, until the Fair we had no major hotels or convention center. Afterwards we had several new hotels including the Hilton, La Quinta, La Masnion; as well as a new three building convention center complex to host large conventions and banquets in one location (before they were split between multiple hotels).