You are here
July 22, 2010
There are critical moments in history where, if events went just a little bit differently then, the situation would be dramatically different now. There are several such instances in the history of Antioch College. Perhaps the most interesting one (with perhaps the greatest possibility for a dramatically different outcome) is how the college dispensed with the Florida lands it received from the estate of Hugh Taylor Birch, class of 1869. The story is best told by Algo Henderson, president of Antioch College 1936-1948, in his delightful autobiography Skyhooks: Riding the Crest of the Industrial Revolution, related in the form of letters to his grandchildren. In this installment he describes the exhilaration of land sales, opportunities gained and lost, and a rather ugly incident of ant-Semitism.
November 27, 1979
Now that you are in college, do you ever think about how a college finances itself? Most students are oblivious to all the efforts that go on behind the academic scenes to subsidize their education. A private college is like a pauper; it has to pass around its begging bowl to get the money to pay the faculty and running expenses, or at least the portion of this that enables the institution to keep going.
While at Antioch as president I did the usual begging, but at one point the college became involved in a real estate operation that was fabulous—a Cinderella kind of venture. An alumnus, Hugh T. Birch, bequeathed to the college a tract of undeveloped land fronting on the most beautiful beach in Florida in Fort Lauderdale.
Seeing that we were faced with a major real estate problem, I hastened to New York to get advice from Joseph P. Day, the biggest real estate wheeler-dealer in New York and perhaps the world. His son Joe had been a student at the college. Day was quite taken with the prospects and on his own made a trip to Ft. Lauderdale to inspect the property. He conceived a plan under which we would develop 80 acres on the oceanfront with apartment houses. The construction would be financed by a huge loan, $30,000,000 from the Metropolitan Life Insurance Company—Day was on their board and claimed he had cleared the matter with the company. We needed only to put our land in the hopper. The income from the leased properties, according to Day, would easily pay all expenses, including interest, payments on the principal, and operating expenses. At the end of 30 years we would have the property free and clear; and each year we would have a handsome income. What more could you want?
I had a lot of confidence in Day and knew he had the college’s interest in mind. Earlier he had given money to buy a house and property, the one in which your mother and Uncle Philip attended nursery school. So we were all set to get on with the deal.
Mr. Day made another trip to Florida. Arriving at Penn station in New York on his return he dropped dead. That was the end of that air castle!
After feeling out the possibilities of selling the land, we decided we would get the most money by developing the land and selling the lots. So the college attorney, Homer Corry, and I employed a staff in Ft. Lauderdale consisting of a local attorney, an engineer, an architect, and a sales manager.
First it was necessary to build a seawall along the intercoastal canal. We decided to make it six feet above normal tide level and to make it out of concrete slabs. Most of the developers in this area used a 4 ½ or five foot wall made out of wood. This was much cheaper, but would not retain the water at its highest levels and would not last long. Furthermore, the wood would be a breeding ground for the little black flies, no-see-ums, that bite so viciously.
Then the mangroves had to be removed from the swamp. Mangrove is as hard as iron and had to be dug by the roots to prevent future growth and also permit the laying of utility lines. Next we negotiated an agreement with the federal government to pump seashell and mud out of the canal and the adjacent river. This was mutually advantageous because it deepened the waterway—used by boats along the eastern coast of the US—and provided us with fill. We pumped the stuff by hydraulic means. Presently we had a nice level piece of property, 80 acres, six feet above mean tide level.
We put all utility lines, including sewers underground. This was tricky because of the new fill and water-logged earth. Some of it required special bedding underneath. Finally we built a system of streets and paved them. For most of this work we were able to employ a Baltimore firm that had had war contracts in the area and still had their equipment available. Fortunately we got a firm price, which came to about $70,000; shortly thereafter a rapid inflation of prices occurred.
One hears a lot about people buying lots in Florida while they are still under water. This was the case with our property. For we had to begin to sell lots before the work was done in order to get money, down payments, to pay our expenses.
Selling lots for small fortunes was a strange experience for me, accustomed as I was to paying $500 for a lot. All of a sudden I had become a “big shot” in real estate. Well, we collected over $3,000,000 from this 80 acres and made a profit of about $2,000,000 and we still had a large tract on the west side of the canal. Of course, these dollar figures do not seem so big in 1979 [2 million 1948 dollars is worth over 18 million in 2010.]. Sabrina, when is a dollar a dollar?
The lots sold like hot cakes. I guess they should have, for the beach was one of the most beautiful in the world and the closest Florida beach to the Gulf Stream. I tried to persuade the trustees of the college to authorize leasing the lots on long term leases. This was on the theory that since a college has perpetual life, the college would have this valuable property in perpetuity, all the while collecting a handsome income from it. But Corry, influenced by the real estate agents, disagreed and the conservative-minded trustees voted with him. I later discovered that the real estate interests were afraid that with leases, the Jews would move in and “spoil” Ft. Lauderdale in the way Miami Beach had been “spoiled.”
I also learned from Corry that one agent had sold a lot to a Jew not knowing he was a Jew; and upon finding this out had voided the transaction. I suspect they bought the man out giving him a nice profit. All of which was revolting. But the real estate operators were an essential part of the team in getting the maximum results from the sales and getting them quickly so we could pay our bills. Just think how the college would have gained, considering today’s values, if it still had the property under those long term leases. Perhaps also the endowment would not have been lost, as have the securities realized from the sale of the land, during the recent wild expansion of the college.
We did one thing of which I am very proud. We donated the beach itself to the city of Ft. Lauderdale. Part of the bargain was in getting the cooperation of the city in building our sewer and connecting it with the city’s disposal plant. But the beach is now a public beach, and not a series of private domains as is the case in Miami Beach and Palm Beach. Furthermore all of the people who live on the interior lots have a perfect right to use the beach even though a hotel may be on the lot fronting the ocean. Jean and I spent our honeymoon on this beach.
Antiochians who visit this part of Lauderdale can recognize it readily because we named the streets after former Antioch presidents and distinguished graduates.