Wednesday, January 6, 2010

Cooling cool cars: Vintage Air keeps classic autos on the road in style

by Adolfo Pesquera
(originally published Feb. 25, 2008 in the San Antonio Express-News)


An ever-present reminder of Jack Chisenhall's grandiose run on the Bonneville salt flats, the modified 1953 black Studebaker Coupe he took up to 219 mph -- with the air conditioner on -- dominates the available space in the small lobby of the Vintage Air factory.

The sleek "Stude" with its 1,000 horsepower Chevy V-8 is Chisenhall's version of Affirmed: both are champion thoroughbreds. Marketed as "A Cool 200" -- the thermometer at the dashboard read 37 degrees -- his 1995 measured mile put Vintage Air on the hot rod world map.

"It was a stunt," admitted Chisenhall, president of the San Antonio company that pioneered air conditioning on classic cars and hot rods. Chisenhall, now 60, wanted to silence once and for all any critics as to whether his air-conditioning systems were a drag on performance.

The company was already a success by the mid-1990s, but the run catapulted Chisenhall to celebrity status in hot rod circles.

"Everybody knew that Jack was going to do that," said Bob Barry, a retired hot rod restoration specialist in Preston, Conn. "It was in Street Rodder, Popular Hot Rodding, all the magazines."

Chisenhall is today recognized by other celebrities. "Tonight Show" host Jay Leno twice praised Vintage Air's products in video clips on his "Jay Leno's Garage" Web site.

The inventor-manufacturer is cagey about how much his company makes, but the firm stays very busy. He admits to selling between 4,000 and 10,000 systems a year at between $1,200 and $3,500 a piece. The company has 87 employees.

"We sell more than 800 systems a year just for 1955-1957 model Chevys, if that gives you an idea," said Rick Love, executive vice president.

When Chisenhall started his business in 1976 as Chisenhall Auto & Truck Air, the hot rod culture was more a grass-roots movement than an industry. Used parts pulled from junkyards were nearing depletion and the aftermarket parts business was at its nascent stage.

"There was no marketplace at the time," Chisenhall said. "These old car guys were taking the AC out, if the car had one. We had to convince them that AC was a good thing."

But that year, Chisenhall stuffed his first-generation air-conditioning systems in a van and went to the Street Rod Nationals in Tulsa, Okla.

"The minute we opened the door, people started asking, 'What's this?' There was a built-in demand," Chisenhall said.

Bob Barry first met Chisenhall at that Tulsa event.

"It was hot and I wanted an air conditioner," Barry recalled. "I became his first dealer."

Vintage Air now has 850 distributors worldwide and is the recognized leader in AC systems for cars built before the mid-1970s.

As other companies attempted to enter the market, Vintage Air distinguished itself by being the most committed to research and development.

Mike Millsap, general manager of Sachse Rod Shop in Dallas County, oversees a shop that grew with the hot rod industry from the restoration side. Millsap started in 1982 making chassis, but now builds the complete vehicle.

"I've been selling Vintage Air products for over 20 years," Millsap said. "There's a couple of other companies, but they cater more to the universal-related stuff. Vintage will bring in several models of a car. They're going to make sure it fits, repeatedly."

There are very few components in an AC system that Vintage Air doesn't make in-house. The company keeps hundreds of molds for duct work, vents, controls and evaporators. It makes its own aluminum front engine cover mount, tubing, heating coils and more.

"We spend a huge amount of time developing a product," Chisenhall said. "It takes us a lot of sales to recoup that expense."

Vintage Air is best known for compact, efficient AC systems that replace obsolete systems on muscle cars and that are for earlier cars never intended to have AC. The company's reputation for research and development attracts new manufacturers, too.

Ford Motor Co. relied on Vintage Air to design and to build the AC system in its 2003-2006 Ford GTs, a high-tech supercar that does 205 mph and retails for $155,000. Vintage Air also landed a deal with specialty car maker Thoroughbred Motorsports Inc.

Thoroughbred, based near Tyler, launched sales of its Stallion in December. A three-wheeled motorcar that looks similar to a motorcycle, the Stallion actually has a Ford Ranger 2.3 liter engine and is governed to max out at 118 mph, said Cristy Stanley, the company's marketing director.

A hybrid of a motorcycle and a convertible, the Stallion's sides and top are open to the elements.

"If you talk to any person who owns a convertible, they'll tell you when you come to a stop sign, you're still going to want the AC blowing on you," Stanley said.

Orders are especially strong from women who prefer the comfort, Stanley said. The company makes two Stallions a day and anticipates increasing to at least 10 a day this summer.

Vintage Air doesn't just make cool, it's a cool place to work. Hot rod memorabilia litters the desks and halls. Chisenhall claims half his staffers are vintage car fanatics he met at auto shows or grabbed from custom auto shops. Their love for vroom has been integral to the company's success.

"You can teach people a lot of things," Love said. "But you can't teach them enthusiasm."

A greener way to recycle water

by Adolfo Pesquera
(originally published May 20, 2007 in the San Antonio Express-News)


Here's a brainteaser.

What does a long-forgotten ballistics engineer have to do with a once prominent Texas home builder, one of America's favorite food companies and a mysterious tiny bubble that could conserve billions of gallons of Earth's freshwater?

Answer: They all have a role in the emergence of VRTX Technologies, a Schertz company whose only product makes little bubbles.

General Mills Inc., the Minneapolis-based international marketer of breakfast cereals, was an early adopter of VRTX's bubble machine. That machine was the brainchild of San Antonio ballistics engineer Cliff Ashbrook, who came up with the technology by shooting bullets in a water tank. And the grandchildren of Texas home builder Ray Ellison Sr. are now the majority owners of VRTX.

"I believe this is the future for water treatment," said Mike Dwyer, a Chicago-based sales manager for VRTX. "It's environmentally friendly, can accomplish all the goals of conventional treatment systems, and it saves water."

The machine offers a chemical-free way to purify water used in cooling towers, the prevalent system used to cool commercial buildings. Depending on the building's use, cooling towers consume from 20 percent to 50 percent of the water that goes into most large buildings, and almost all of the buildings use chemicals to keep contaminants at bay.

The 18-employee company isn't revolutionizing the cooling industry, though.

"Probably 99 percent of the market is still using chemicals," VRTX CEO David W. Nicholas said.

Meanwhile, VRTX is chipping away at the market in its quest toward profitability.

"We are probably going to be in the neighborhood of tripling sales this year," said Nicholas, who would not disclose revenue figures or losses. "We expect to approach break-even some time in the next 12 to 18 months."

In 2002, General Mills won the Minnesota Governor's Award for Excellence in Waste and Pollution Prevention.

General Mills' award had its genesis in a 1995 hazardous-materials training session among employees of the company's Chanhassen, Minn., plant. Workers asked for an alternative to the toxic chemicals needed to operate the factory's cooling towers.

Factories, office towers and other large buildings use cooling towers to get rid of indoor heat. They work by blowing vast quantities of water down a manmade waterfall. The water that doesn't evaporate is recycled, but to prevent bacteria buildup and scaling on the equipment, chemical treatment has been and remains the standard industry practice.

General Mills found no viable alternative to chemicals in 1995, but VRTX came into existence in 1998. The following year, General Mills installed VRTX equipment at the Chanhassen plant.

After a test period, General Mills reported an amazing chain of results. Water usage was cut 40 percent for a yearly savings of more than 3.6 million gallons. All toxic chemicals used for cooling-tower operations were eliminated, 6,544 gallons a year.

That means no more sodium hydroxide, sodium molybate, sulfuric acid, chlorine or biocide that could work their way into the groundwater.

Annual factory emissions fell by 2.4 million pounds for carbon dioxide, 6,200 pounds for sulfur dioxide and 6,000 pounds for nitrous oxide.

General Mills reported an annual savings at the plant of $108,000 and said it would install 21 more VRTX (pronounced "vortex") devices at its other plants.

Jerry Wohlers, a manufacturer's representative with Chanhassen-based Power Process Equipment Inc., sells cooling-tower parts for various manufacturers. His VRTX clients in Minnesota include General Mills, Schwann Food Co. and Lund's Foods, he said.

In Minnesota, VRTX has a proven record, Wohlers said, and it's competitive.

"In 99 percent of all cases, we're coming in at less cost (than chemical treatment)," Wohlers said.

By Wohlers' account, VRTX's expansion in Minnesota sounds inevitable because the state government is insisting all public institutions using state money for their facilities use approved environment-friendly architectural standards.

If VRTX secures its foothold in the industry, the company's potential for growth is tremendous.

Industry analyst Freedonia Group estimates the water-treatment-chemical industry's U.S. market at more than $3 billion, with a growth rate of 4.5 percent this year.

Resistance comes chiefly from the facilities managers who are VRTX's point of contact for sales. Use of a chemical-free system is still too new a concept for many, Nicholas said.

But the principle behind the VRTX device is mechanically simple.

"Our goal is to make as many bubbles as we can and collapse them as fast as we can," Nicholas said.

That concept came from Ashbrook's experiments, shooting bullets into a water tank.

He noticed that sediment builds up on the tank's floor and theorized that in-solution particles were somehow displaced by the violent vortex caused when bullets zip through water.

"Ashbrook thought you could do interesting things with a vortex zone," said Nicholas, adding that the inventor has died.

Time proved Ashbrook right. A hydrodynamic cavitation device -- which produces bubbles as an object forces its way through liquid -- evolved from that idea.

"Pumped water runs through a set of horizontally opposed nozzles," Nicholas said. "This causes the sudden formation and collapse of low-pressure bubbles."

At the center of a conical nozzle that spins at 600 mph, a vacuum forms where bubbles measuring 50 microns -- about the width of human hair -- implode.

"Bubbles collapse asymmetrically, and a microjet forms," Nicholas said. "This collapse blows the bacteria cell wall apart."

Oddly, tiny hot spots forming at 3,000 degrees Fahrenheit occur in the bubbles, but water temperature remains ambient.

All this violence doesn't just kill bacteria. It strips minerals from water, preventing them from adhering to cooling-tower parts and causing scaling. This newly formed sediment gets filtered, and clean water is recycled.

Chemical treatment also recycles water, but chemicals function on the premise that they'll keep sediment in solution longer. This soup of dying bacteria and minerals eventually must be purged, Nicholas said, "or you end up with thick water."

VRTX started as a property of Boston-based A.W. Chesterton Co., a manufacturer of industrial fluid seals, which bought the technology from Ashbrook. Chesterton had litigation problems with one of its other holdings, Nicholas said, and sold VRTX to raise cash for its legal battles.

VRTX was always in Bexar County, but it wasn't locally owned until the Ray Ellison Grandchildren Trust took majority ownership in 2002.

"I think it's a fabulous product," said Baker Duncan, a Ray Ellison trustee on the VRTX board.

Ellison was famous for creating one of the largest home-building companies in Texas in the 1960s through the 1980s. But his heirs hope VRTX may someday overshadow Ellison's home-building legacy by toppling the dominant chemical companies.

VRTX is the trust's only venture capital investment, Duncan said.

"Like all venture capital, you've got to have fairly deep pockets because it seems like it calls for more most of the time," Duncan said.

The trustees' investment strategy for VRTX is to expand it aggressively, Duncan said, adding that they'll back Nicholas "to the hilt."

The trust has no plans to sell the company, Duncan said. The sale of a trust's assets isn't considered until it reaches a certain level of maturity, he said, "and the company is not viable, yet."

Dwyer, the Chicago sales manager, understands better than most the challenges VRTX faces. Dwyer, who spent 25 years selling water-treatment chemicals, came from what Nicholas calls "the dark side."

"It's a hard sell," Dwyer said of the VRTX device, "mainly because other technologies have been used in the past."

Despite VRTX's proven record, potential clients still lump it together with magnets and electrowave devices that didn't perform well.

Reluctance to the product in the United States has no parallel overseas. VRTX has an office in Amsterdam, and sales in Europe are doing much better, Nicholas said. "They're much more environmentally aware," he said. "Water is more expensive there. Sewer treatment is, too. Some countries, Sweden and Finland, want to completely eliminate biocides due to concern for groundwater."

Who invented the cell phone? A San Antonio inventor stakes his claim

by Adolfo Pesquera
(originally published Jan. 6, 2008 in the San Antonio Express-News)


Inside a huge glass case cluttered with electronic artifacts, propped next to a 1990-model laptop computer, David Monroe keeps a black-and-white photograph from the 1994 movie "Clear and Present Danger."

The photograph depicts the laptop's use in the movie. It was the first laptop that could transmit high-resolution photo images, and it once was used for government military and espionage operations.

"We built the laptop computer a quarter-inch smaller than a standard Samsonite briefcase," Monroe said. "The government loved it; we sold a ton."

During research for novelist Tom Clancy's film, Paramount Pictures learned of the laptop and asked to borrow one.

That's a snippet in Monroe's extraordinary life. An industrious inventor since his teenage years, Monroe is one of the 20th century's pioneers in image transmission technologies.

"In the first Gulf war, the camera that followed the bomb down to its target, that was his product," said Bob C. Curfiss, Monroe's former patent attorney. "He has a real expertise in telecommunications and in miniaturization and high-speed, high-quality digital communications."

Monroe and the San Antonio-based companies he founded or worked for gave the world such devices as the first camera cell phone, video teleconferencing and early breakthroughs in items we know today as laser printers, Flash RAM memory sticks and microprocessors.

Monroe's latest venture is e-Watch Corp. A company he started in 2000, it was inspired by the Columbine High School massacre.

"People were shot just by running into harm's way, not knowing what they were dealing with," Monroe said.

The company designs and manufactures sophisticated full-motion video and audio surveillance systems for schools and for government and corporate facilities.

Denton Independent School District was an early adopter of e-Watch products. Jack Farguson, the district's network administrator, said the surveillance system was less costly, more versatile and easier to maintain than its predecessor.

"When we first started using e-Watch, it was very unique," Farguson said. "There are more comparables now, but it's still one of the best quality systems."

Monroe, 55, doesn't disclose earnings. Except for a brief period in the 1990s when his previous company, PhotoTelesis Corp., was owned by Texas Instruments and then Raytheon Co., his ventures have stayed in private hands and all research and development is self-financed.

"The last venture capital I went out for was with Image Data Corporation," Monroe said, referring to a company he founded in 1983.

At Image Data, he invented and mass-produced the Photophone, a desktop device that transmitted photographs over a standard dial-up telephone line. It was a predecessor of the camera cell phone he later invented at PhotoTelesis in the mid-1990s.

"The first Photophone prototype was a Sony TV set we modified on my kitchen counter," Monroe said.

Its breakthrough commercial success came in the medical field, Monroe said. It was widely adopted in Canada in the mid-1980s to transmit X-rays to places where transportation could be impossible in winter.

Government agencies then asked Monroe to develop a similar model to function on encryption devices. However, his board of directors repeatedly turned him down on the grounds that government agencies were hard to work with and slow paying their bills.

Convinced that the idea had merit, Monroe left Image Data in 1985 to start PhotoTelesis.

The laptop that caught Paramount's eye was but one of many image transmission devices PhotoTelesis churned out. Black boxes installed in AH-64 Apache helicopters flew over Bosnia in the mid-1990s, helping U.S. peacekeepers.

"Within seconds, we can identify friend or foe and, if it is foe, get permission to engage," 2nd Lt. Kevin McAninch, then of the 17th U.S. Cavalry, told the San Antonio Express-News in a 1995 article on the devices' introduction.

Smaller hand-held versions were developed later for the U.S. Army. The Lightweight Video Reconnaissance System allowed soldiers to take high-resolution images and to mark them with a stylus the way a television sports analyst might do to explain a football play on a frozen frame.

In a field where innovation is constant, Monroe must contend with copycats. Others, for example, have made claims about inventing the camera cell phone, but he has the patent.

Monroe holds 25 patents and has patents pending on another 35 inventions.

"I'm suffering from my low profile," Monroe said, explaining that so much of his work was done for defense and covert operations. Launching e-Watch was motivated in part by a desire to expand his presence in commercial markets.

Curfiss, an expert in patent and intellectual property, said he worked with more than 50 of Monroe's patent applications. The Houston resident said he stopped representing Monroe a few years ago, but they maintain good relations.

"Some years ago, he went into an aggressive enforcement program, challenging people around the world that were using his patented technology," Curfiss said. "The firm handling it for him has the right to hire their own patent attorneys."

A Kansas native, Monroe enrolled at the University of Kansas as a physics major. Before graduating, he left college for a chance to work at San Antonio's Datapoint Corp.

"Datapoint is near and dear to my heart," Monroe said. "Datapoint was my college education."

At Datapoint, Monroe worked for Chief Technical Officer Victor Poor, the head of a team credited with inventing the first microprocessor chip that made personal computers possible. Monroe moved up in Datapoint during its heyday as a Fortune 500 company, leading development on numerous products.

Poor, who is 75 and living in retirement in Florida, said Monroe worked on various projects involving early desktop computers. Monroe was best known for Datapoint's advancements in video teleconferencing, he said. When Monroe left to start Image Data, Poor said he retired from Datapoint to be Image Data's president.

"Image Data was pretty well under way when I got there," Poor said. "I was president until we could recruit permanent management; I didn't need another career."

Monroe still sits on the board at PhotoTelesis, which has 25 employees. But the company was acquired in 2005 by Symetrics Technology Group, based in Melbourne, Fla.

Neither PhotoTelesis nor e-Watch manufactures its own products today. As orders grew, Monroe said, manufacturing was farmed out to manufacturing companies.

A Houston company makes e-Watch's surveillance equipment, and Symetrics Industries makes the entire PhotoTelesis line.

"Our expertise is really in engineering," Monroe said. "We keep generating new designs."

Judge sanctions lawyers: fraud in DaimlerChrysler defective product case

by Adolfo Pesquera
(originally published May 19, 2000 in the San Antonio Express-News; reprinted summer of 2000 in Reader's Digest)


District Judge David Peeples slammed three attorneys fighting for their professional lives with devastating sanctions Thursday at the close of an inquiry into evidence tampering in a $2 billion product liability suit.

The 224th district judge ordered attorneys Robert Kugle, Andrew Toscano and Trey Wilson to pay more than $865,000 in legal fees incurred by law firms hired by DaimlerChrysler.

Kugle is senior partner of the Kugle Law Firm that was representing Juan Fabila and his wife. Fabila's two children and two sisters were killed in a 1996 car rollover in Mexico.

The civil court judge also said he would report his findings to the State Bar of Texas and to the Bexar County district attorney for possible action.

DaimlerChrysler's allegations of evidence tampering and witness bribing were the basis of Thursday's punishment and could lead to disbarment and criminal indictments.

A federal investigation is under way. Roy Spezia of the Austin firm Clark, Thomas & Winters, one of several firms representing DaimlerChrysler, went to the U.S. attorney's office in late April after he concluded Kugle's attorneys knew as early as July 1998 that their lawsuit had no merit.

Spezia, in concert with the Brin & Brin firm of San Antonio, sought the sanctions. They also requested, and Peeples agreed, to dismiss the suit with no option to reinstate it.

In response to a question about the Fabilas' culpability, Peeples' parting shot at the end of the weeklong evidentiary hearing was: "Obviously, I find there is complicity in a number of ways."

George Brin, the automaker's lead counsel, constructed a conspiracy theory through many pieces of evidence, including:

  • Before-and-after photographs taken in summer 1998 that show the steering column intact, then broken. Whether a steering column decoupler was defective was at the heart of the Fabilas' allegations.
  • A Kugle investigator's report stating the steering mechanisms were "unremarkable," and an affidavit from the same investigator denying authorship of the report after DaimlerChrysler was anonymously sent a copy.
  • A deposition from a Mexican federal officer claiming that Bridgett Fabila told him her husband fell asleep while driving and that she contributed to the accident by jerking the steering wheel too hard. That officer and his partner claimed they were offered a bribe to change their testimony.
  • Testimony from the investigator who took the first set of photographs claiming Wilson told him in March that the suit was dismissed because his firm was "running a bluff, but we had our hand called."

    The Kugle Law Firm did not file to dismiss the suit until the photographs showing the steering column intact came to DaimlerChrysler's attention. Brin called Kugle's attempt to dismiss the suit tantamount to a confession.

    "I know Mr. Wilson is a young lawyer. I know Mr. Toscano is a relatively young lawyer. There is no triumph here for anyone," Brin said. "This has held our entire profession up to shame, and they need to be punished for it."

    Toscano never appeared in court, and Wilson and Stephen Garza, the investigator who denied writing the report, both asserted their Fifth Amendment right not to testify. Kugle waived his right to keep silent and in testimony Tuesday claimed DaimlerChrysler bribed witnesses and tampered with evidence.

    Toscano's attorney, John Pinckney, argued that blame might be pointed at Bridgett Fabila because an insurance investigator took her statement about the accident two years before DaimlerChrysler was involved. Pinckney proposed, however, that Kugle withheld that information, as well as the photographs and Garza's report, from the attorneys in his employ.

    But Brin argued that as lead counsel up until the last five months of the suit, Toscano must have known about the tampering.

Aztec Theater's extreme makeover

by Adolfo Pesquera
(originally published March 24, 2006 in the San Antonio Express-News


Surrounding the great chandelier of the Grand Lobby of the Aztec on the River, the stone faces of Xochitl, the Mesoamerican guide, will come to life in eight days to tell modern mortals of ancient mysteries.

As dazzling as a Las Vegas multimedia light show, the laser and thunder magic of Canadian-based Science North heralds the re-emergence of the 80-year-old Aztec.

This is more than an opulently restored landmark. In its second incarnation, the Aztec has the goods to be a major tourist destination with a culturally resonant theme and a rich personal history that includes the grandiose vision of a Belgian farmer.

A 483-seat auditorium with a giant Iwerks Extreme Screen is the main event. But the multimillion-dollar renovation itself and a growing list of theme-appropriate tenants add to the gilded theater's allure.

Three restaurants and two boutique shops are under contract. The state of Durango, Mexico, is opening a trade office and professionals are booking office space. With river and street levels and five upper floors to fill, the Aztec has the potential to be a smaller anchor on the west end of the River Walk the way Rivercenter with its competing IMAX Theater anchors the east end.

With its giant screen and surround-sound system, the Aztec will show the same kind of three-dimensional films and high-impact outdoor adventure movies that IMAX offers.

Originally constructed with authentic reproductions of Aztec and Mayan petroglyphs, statuary and funeral urns, the 1920s picture house will be home to the first U.S. retail location for Oro de Monte Alban.

Located at the river level, this Oaxacan-based company makes jewelry certified by Mexico's National Institute of Anthropology and History as authentic pre-Columbian reproductions.

"Our mission is not only to sell jewelry, but also to expand our culture," company spokeswoman Georgina Cárdenas said. "We were looking for the right place in the United States for 21/2 years. This is the perfect place."

Euro-Alamo Management Inc., the developer, is bringing Austin-based Iron Cactus Mexican Grill and Margarita Bar to its River Walk entrance. Leasing is brisk in the 100,000-square-foot building; about 42,440 square feet are dedicated to office and retail.

Megan Stendebach, the Aztec's marketing director, is blanketing the hospitality industry. There are back-scratching deals to be made.

"We're building a boat ramp," Stendebach said. "We are in negotiations with Rio San Antonio Cruises about them leasing space here to sell boat ride tickets."

The Mayan Revival palace first opened in 1926 to the pomp of a 26-piece orchestra and Aztec chorus girls. The first day drew 3,000 people. But by the 1970s the Aztec was in disrepair and struggling; remodeled into a multiplex, its architectural beauty was hidden. It closed in 1989.

Saving the Aztec from ruin was the inspiration of Theodore Bracht, a Belgian multimillionaire who had no experience with commercial real estate development. Bracht describes himself as a farmer who mostly tends the family business; he owns palm oil, tea, rubber and other cash crop plantations on nearly every continent.

Friends who'd visited during the dark years of the real estate crash in the early 1990s introduced Bracht to San Antonio. His ears perked up from enthusiastic stories of great bargains to be had. He came and bought, including the Alamo National Building in 1991.

He formed Euro-Alamo Management to take care of his local investments and became a regular visitor. Looking across the street from Alamo National, he wondered why no one showed interest in the Aztec, a grimy, lackluster structure.

During a February gala preview, Bracht told his guests how he walked through the dark, tomblike theater. The dusty faces of the corn goddesses had lost their fresh colors, their eyes no longer glowed red, and they seemed to be crying out to him, he said.

He bought it in 1998, then collaborated with neighboring landowners and the city to create river-level access. He persisted through years of painstaking and expensive historic preservation phases.

In 2004, he sold the Alamo National to Drury Southwest Inc. to complete the project. That deal that included a $9 million loan and a partnership agreement; Drury brought its construction expertise to the Aztec.

It was nothing like farming, Bracht noted: "It was a major new development in my life."

The Aztec is Bracht's playground. He won't discuss total cost and the checks still are being written, but Bracht spared no expense and had great fun with it. He bought a 1931 Mighty Wurlitzer organ console, one of only three Waterfall-style consoles ever made by the Rudolph Wurlitzer Co. It was connected to a 1,700-pipe and percussion system bought from Oral Roberts University, and reconditioning included computer controls.

Giant serpents covered in gold and copper leaf provide the facade to the organ lofts, which are on both sides of the fire screen -- known by old-timers for its panoramic painting of Montezuma meeting Hernán Cortez in 1519.

Ted Voss, 51, is the grandson of Theo Voss, the German immigrant who at age 28 was tasked with building a steel and glass chandelier that is estimated to weigh more than 2,500 pounds.

"The goal was to make it in 30 days and 30 nights," Voss said.

Voss, heir to the family business, was asked to take down the Aztec chandelier and restore it. Voss cut it in two, the same way his grandfather did, to get it to his shop. He ripped out a spaghetti heap of wiring with woven insulation that turned to dust when touched. There were 278 light bulbs and bulb sockets to replace.

"It's all riveted and screwed together," Voss said. "It was made before the days of welding."

Bracht would visit Voss and check on progress. Globetrotter that he is, he always found time to keep up with the Aztec. Farmer that he is, he describes micromanagement with a French rancher's colloquialism.

"It is the eye of the owner, that makes the calf fat," Bracht said.

One of the entrepreneurs to discover Bracht and his project is James Beswick, a Londoner who toured the United States last year looking for a place to open a restaurant. He settled on Charles Court, opposite the Hotel Contessa, where he soon will open Drink, a coffee bar by day and wine bar by night.

But one day Beswick and his wife wandered through the scaffolding at the Aztec and took a peek inside.

"The first thing we said was, 'Wow, we want to be a part of this,"' Beswick said.

Opposite Bracht's mechanical room show, Beswick's Happy Bean will open the same week as the Aztec. He also leased a street-level space with access from Commerce Street and inside the theater. By early July, it will open as Café Cubana.

"We're about something entertaining, something with relevance that will initiate thought," Beswick said.

Bracht couldn't agree more.

Henry Cisneros: Reinventing urban America

by Adolfo Pesquera
(originally published Feb. 25, 2005 in the San Antonio Express-News


Had Henry Cisneros said five years ago that he would reinvent urban housing in America, such a declaration might have come across to many as just so much hollow bombast.

The former San Antonio mayor and one-time Department of Housing and Urban Development secretary was more circumspect, stating only that he was launching a company to exploit what he believed was an untapped market for market-rate affordable homes in neglected older neighborhoods.

American CityVista, the company Cisneros started in 2000, has a score of communities under development. Most are in Texas, and they've done well - so well, in fact, that Cisneros harnessed the expertise gained from his experiment to start a second company, CityView, about two years ago in California.

CityView is a joint venture between American CityVista and Saybrook Capital, a Santa Monica-based investment bank best known for restructuring bankrupt companies. It claims among its restructure assignments such companies as Kmart, Adelphia and Delta Air Lines.

As with American CityVista, Cisneros leveraged his name and knowledge to get big-name companies to participate in a joint venture. But CityView's ambitions far exceed those of American CityVista.

"Within six months, we will be north of $1 billion in development (projects)," said CityView CEO Joel Shine. "There is no reason we won't be a $1 billion-a-year company in home sales."

When Saybrook opted to be a partner with American CityVista in the CityView joint venture, Shine's credentials earned him the top job.

CityView, Shine said, started with the idea that it would act like a traditional capital provider to homebuilders. But its mandate was to build inner-city housing for working-class families - an area where many builders were uncomfortable.

CityView, Cisneros said, would find the land, envision the project, clear regulatory issues with local governments, qualify the builder, help the builder with financing and insurance, have a say in the final design and market the project.

"We set up as a one-stop shop," Shine said. "Our seat at the table is as a traditional equity source and a bank. But we're much more nimble than the typical structure."

Where American CityVista works with one builder, KB Home, CityView works with many builders. While American CityVista does single-family housing, CityView will do single-family, condominiums and town homes, and even mixed-use projects with housing and retail.

CityView had its genesis in 2001 with a request for proposals from the California Public Employees' Retirement System. With a $189 billion fund, CalPERS is one of the largest real estate investors in the nation.

"They didn't have an urban portfolio, nor an affordable housing portfolio," Cisneros said. He put his American CityVista chief operating officer and former North American Development Bank CEO, Victor Miramontes, in charge of developing a company that CalPERS would be willing to fund.

Miramontes lost a year in fruitless negotiations with KB Home. When it opted out, Saybrook stepped up. American CityVista and Saybrook capitalized the startup and share in its governance. Miramontes is managing director and Cisneros is chairman.

CalPERS, the major investor, allocated $40 million in 2003. It upped its allocation to $100 million last year on the condition that CityView expand its service area beyond California to include Arizona, Nevada, Oregon and Washington.

"CalPERS takes its role as a financial partner very seriously," Miramontes said. "And because it is so big, it can change markets."

That, he said, translates into projects of a magnitude that can revitalize neighborhoods.

CityView takes on the most challenging sites, even abandoned and polluted land. It has cleared defunct oil fields. It recently leveled an old retail center in Pomona for town houses.

Between American CityVista and CityView, Miramontes said, Cisneros has changed the way homebuilders think about the inner city.

"Five years ago, others were suggesting this was crazy," Miramontes said. "Now they're trying to catch up."

Cisneros is not satisfied with either company. He is creating a third entity that will have as its scope a national mandate to do what CityView does on the West Coast. Cisneros wants a company that will take the CityView model into the Midwest by the end of this year and into the Southeast in 2006.

"The national fund will build off of the success we've had in California," Miramontes said. "We'll leverage what we've learned."

Hispanic immigrant remittances: Sending money home

by Adolfo Pesquera
(originally published July 23, 2006 in the San Antonio Express-News)


Dusk approaches on a Friday - payday - and Josef Delgado, 25, enters La Michoacana Meat Market on Fredericksburg Road to send money home.

The store has a booth operated by Barri, one of the ubiquitous company logos inside Loop 410 at almost every convenience store in Hispanic neighborhoods. Remittance companies like Barri have been growing for about five years along with Texas' immigrant communities.

"Immigrants are not very keen about banks," said Julissa Bonfante, a spokeswoman for international banking company BBVA Bancomer. "They're going to feel more comfortable going to these small mom-and-pops."

All kinds of small businesses - coin laundries, bus lines, notaries public and clothing stores included - offer wire-transfer services with names like Vigo Remittance Corp., Giromex and DolEx. Even the U.S. Postal Service and banks have their own remittance arms.

But banks have been less accommodating to the small remittance companies, shutting many of their accounts in fear that banking examiners will penalize them for helping an industry seen as a haven for terrorist or drug trafficker transactions.

If regulatory oversight is too heavy-handed, some experts fear it will drive underground an industry vital to the interests of U.S. trading partners in Latin America.

Hispanic immigrants sent $53.6 billion from the United States to Latin American countries in 2005, an increase of 17 percent over the previous year according to the Inter-American Development Bank. Mexico received more than $20 billion. The remittances represented 17.1 percent of the gross domestic product in El Salvador and 12.2 percent of GDP in Guatemala and the Dominican Republic.

That growing volume attracts non-traditional remittance service providers. The U.S. Postal Service launched its "Dinero Seguro" in 1997, and several national banks began providing wire transfer services over the past four years.

Still, the majority of customers flock to small retail operators in their neighborhood.

At La Michoacana Meat Market, Delgado sent $300 to his family in Ciudad Hidalgo in the central Mexican state of Michoacán. His transaction is representative of the national average: $307.21.

When Delgado arrived in the United States more than eight years ago, he used Western Union. At that time, there were few choices. He prefers Barri, which provides a face-to-face transaction with a teller as opposed to a direct-line telephone to a distant representative.

"With Barri, it's more comfortable. It's cheaper," Delgado said.

Barri, a small 25-year-old Houston-based, Mexican-owned company, entered San Antonio in the spring of 2004, said María Bazaldúa, the San Antonio district manager.

"We have nine locations here, and we're looking for more locations," she said.

The vast majority of remittance transactions occur through small convenience stores and other retail locations, said Bonfante of BBVA Bancomer. BBVA of Spain owns Laredo National Bank but does not see advertising remittance services through banks as the best way to handle that market, she said.

"We have 40 percent of the market share of money that goes from the United States to Mexico," Bonfante said.

Bancomer Transfer Services is the wire platform used by the U.S. Postal Service, Wells Fargo and many other companies. Mexicans know the Bancomer name, one of the most dominant retail bank chains in Mexico, but it has almost no retail presence in the United States except for a few branches in California.

The mom and pops are so widespread some store owners think they need their remittance service even if they feel ambivalent about it.

David Padilla's grocery on Culebra Road has been in the family for 50 years. In the mid-1990s, many of the old Tejano families died out or moved to the suburbs. Padilla estimates the majority of newcomers are recent immigrants from Mexico and Central America.

Around 2001, Padilla recalls, customers frequently asked for "envíos de dinero," the wiring of money.

He keeps telephones on the counter for Western Union and Orlandi Valuta. Both are companies owned by Denver-based First Data Corp., which also recently acquired Vigo.

"For the paperwork I have to deal with and the complaints I get, the fee I make is hardly worth it," Padilla said. "But people ask for it and I do sell telephone cards."

People who send money often buy a prepaid phone card to tell the recipient how to retrieve the money. The knowledge that Padilla's competitors offer the service keep the money wire phones on his counter.

Most transactions are legitimate, but in 2004 concern over terrorist financing led bank examiners at the federal Office of the Comptroller of the Currency to take action that hurt the remittance industry. Because of the longstanding problem of laundered money tied to drug trafficking, the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN), state financial departments and the Internal Revenue Service closely monitor money service businesses.

The OCC never should have put the onus of policing these businesses on banks, said David Landsman, a spokesman for the National Money Transmitters Association.

"The guidance that has come out from regulators to the banks in the last year is the worst thing that ever happened to us," Landsman said.

San Antonio Federal Credit Union jumped into the money wire business in 2002 by joining forces with Vigo Remittance Corp. It found the unusual level of monitoring and the extra steps involved in completing transactions to be too much for the little business generated. Verification of delivery to the recipient involved not just dealing with foreign banks but also retail locations all over Mexico.

Immigrants, many of whom are undocumented, do not have bank or credit union accounts. Vigo convinced SACU that if the credit union provided a money wire service, the credit union could develop relationships with these clients and get them to open accounts.

"The problem we found was most of these folks didn't want to come into a bank," said Mark Dwyer, SACU first vice president of treasury management. "Part of the problem, too, was foreign transactions are being so highly scrutinized. Ever since 9/11, it really becomes a headache."

SACU dropped the business by the end of 2004.

Banks risked criminal penalties if they did not intensely review these accounts. Rather than mess with it, many banks dropped the business or severely cut their involvement.

Joseph Rooney is deputy commissioner of the Maryland Division of Financial Regulation and president of the Money Transmitter Regulators Association. He speaks on behalf of state financial regulators before FinCEN and other federal agencies. On July 7, he complained to FinCEN's director that examiners go so far as to advise banks to stop serving money service businesses because the industry is too high risk.

The crackdown on remittance services is more serious on the East Coast, and many small businesses closed. The New York State Assembly is considering a bill that would make it illegal for banks to refuse remittance company accounts. FinCEN took steps to fix the situation by issuing more elaborate guidance last summer, but the complexity of the rules made the problem worse, Rooney said.

A FinCEN spokeswoman, Anne Marie Kelly, said the office closed its comment period last week for a new set of rules it will release later this year in hopes of coaxing banks into retaining remittance firms' accounts.

"This is our attempt to address an issue we see as quite alarming," Kelly said. "We hate to see this industry driven underground where there is no transparency in transactions."

Gaspar Silva, a San Antonio native, knows first-hand how difficult it is to keep a bank account. His remittance business, Cash Casa Inc., has been based in Dallas since 2003. In spring 2005, Bank of America gave notice his account would close in 60 days, but he could only make deposits for 30 days.

A money wire company pays the receiver before the sender's money gets deposited. To cover the lag time, money service businesses maintain a fund with a bank that has a relationship with a foreign bank.

The shutdown "gave us a lot of problems," Silva said. "We had 30 days to set up a new banking relationship. Not just any bank has all of the services we need."

After a mad scramble, he found a safe harbor at Comerica.

Banks have been closing accounts to their money service licensees for the past two years, said, Stephanie Newburgh, a deputy commissioner at the Texas Department of Banking.

"It occurs more with the smaller companies, the mom-and-pop organizations," she said.

To help put banks at ease, the state Banking Department is conducting an outreach program, holding seminars around the state to assure bankers that licensees are heavily regulated, she said. To obtain and hold their state licenses, remittance companies must be registered with the IRS. They also go through financial and criminal checks and various reporting requirements.

Bank of America shut most of the accounts it had with money wire firms, but it wasn't shy about offering the service directly. In January 2005, Bank of America launched a revamped service that eliminated its transfer fee and foreign exchange fee to users who would open a checking account. The program went nationwide nine months later.

Wells Fargo has taken a different strategy than Bank of America. While the bank still tries to lure new accounts with wire services, it has also taken a page from the Barri playbook.

"We are in (the Austin) Fiesta Mart," said Raúl Lomeli, Wells Fargo's director of diverse growth for Central Texas.

Wells Fargo does not disclose its wire remittance volume, but Lomeli noted that since 2001 more than 750,000 accounts have opened nationwide with the "matrícula consulares," consulate-provided national identification cards.

Barri, however, is more concerned about competition from DolEx and other small retailers than it is about banks.

"This is a company with good growth," said Bazaldúa, the San Antonio manager for Barri. "We are responsive to our customers. If they say they drive too far to get here and we see the demand for service, we open a new location. We win their confidence and offer them more than one reason to come here."