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Constructing a Fortune: Robert Rowling, the Fifth-richest
 Texan and Owner of the Omni Hotels Chain
By David Wethe, Fort Worth Star-Telegram, TexasMcClatchy-Tribune Business News

Sep. 24, 2006 - A multimillion-dollar real-estate project breaks ground on the south side of downtown Fort Worth with the financial backing of a publicity-shy Texas billionaire.

But he's not a Bass.

This Metroplex entrepreneur has far-flung investments in oil and gas, fitness gyms, real estate, upscale hotels and dollar stores. He's even donated enough money to tack his dad's name to the football stadium facade at the University of Texas at Austin.

But he's not Tom Hicks.

This man is also a heavy political fundraiser.

But he's not Ross Perot.

So, who's the mystery money man holding the blueprints to Fort Worth's newest skyscraper?

Meet Robert Rowling, 52, the fifth-richest Texan and owner of the Omni Hotels chain, based in Irving.

After months of on-again, off-again negotiations with Fort Worth Mayor Mike Moncrief, Rowling is building an Omni-branded convention center hotel that's expected to have the look and feel of Cowtown.

Rowling, who lives in the Dallas suburb of Highland Park, wants his western neighbors to know that he's a Fort Worth guy at heart. His wife graduated from Paschal High School.

His father-in-law graduated from Texas Christian University.

And back when he and his wife and two sons lived in Corpus Christi, Rowling spent many years going to the Stockyards and other nearby attractions for vacation.

"Fort Worth's a market that I'm just real familiar with," he said in a recent interview at his office next to the Las Colinas Country Club. "When my kids were little, we did every tourist thing there was to do in Fort Worth."

That's one reason Rowling is especially interested in what's going on at the construction site across Houston Street from the Fort Worth Convention Center.

"I've spent a lot more time on this property than most because I feel like I have something to add here," he said.

Rowling said he's not interested in building just a "plain vanilla box" like other new convention-center hotels he sees.

Like many developments that receive public subsidies, the Fort Worth project has attracted its share of criticism from taxpayers and other downtown hotel owners. Many say that Fort Worth shouldn't be offering any help and that the downtown market will have too many rooms.

But Rowling, a native Texan, shrugs off his critics.

"Keep in mind that every tax incentive we're getting is generated by the $175 million we're going to spend -- it's all private money," Rowling said. "We're taking a risk. We're betting that we can fill these 603 rooms on a pretty consistent basis."

Then again, Rowling didn't build a net worth of $5.2 billion and climb his way to the 45th spot on the Forbes list of the wealthiest 400 Americans without rolling the dice.

Modest beginnings

Indeed, one of the largest chunks of Rowling's TRT Holdings portfolio can be attributed to his successful but risky wildcatting days when Rowling and his father, geologist Reese Rowling, drilled for oil and gas, mostly in South Texas.

After earning a business degree from the University of Texas at Austin and a law degree from Southern Methodist University in the 1970s, Rowling tried his hand as a tax attorney for the Houston firm Andrews Kurth in 1980. But he left that job after about a year to join his dad's small Corpus Christi company, Tana Oil & Gas.

Life was anything but lavish in the early going, Rowling said. His dad started off "dirt poor." When Rowling joined the company in 1981, he was one of six employees.

But the new father-and-son combination would later prove fruitful, with Robert's business acumen and Reese's scientific mind, said Jim Caldwell, who began as the family attorney around the same time Robert came to town. Caldwell is now the president of TRT Holdings and one of Rowling's closest advisers.

"A lot of people say, 'Bob just showed up, and he kind of inherited it all,'" Caldwell said. "That is very far from the truth. It certainly was a joint effort by both of them."

Along the way, Tana made some valuable discoveries underground. That allowed the Rowlings to sell Tana to Texaco for a reported $476 million in 1989.

From that point on, Robert Rowling had enough to build on the family fortune.

"The first million dollars is by far the hardest million dollars to make," said Rowling, whose father died in 2001. "I really credit that to my father."

Rowling formed TRT Holdings to manage the family's wealth. He soon bought a bank in Corpus Christi and sold it a few years later for $131 million to the company now known as Bank of America.

TRT Holdings also started buying up real estate in downtown Corpus Christi and elsewhere. The buying spree included eight hotels, making Rowling a franchisee for the first time.

Rather than take directions from the franchisor, though, Rowling and his executive team soon discovered that they wanted more control.

So Rowling started looking around for a hotel company to buy.

In 1996, he bought Omni Hotels from Hong Kong-based Wharf Holdings for $500 million. The deal included 35 hotels that were corporate-owned or under management contracts with Omni.

TRT Holdings again wanted more control and started buying out its franchisees. The chain has since gone from 18 franchised hotels to only four. The company has only sold two hotels, including the first one TRT ever bought, a Ramada in Corpus Christi. Omni has also taken over some nicer existing hotels, including La Mansion along San Antonio's Riverwalk.

Omni also built properties in new markets such as San Diego, San Francisco and Orlando, Fla.

From the ground up

Rowling believes that hotels built from the ground up, including the one in Fort Worth, pose more of a challenge than existing properties because the new ones don't have cash-flow numbers to indicate the hotel's health.

"That's just the way it is; they're always more risky," Rowling said. "Now, it's not like drilling a $20 million dry hole in the Gulf of Mexico, which we've done recently."

All the work to freshen up Omni's image is having some effect on the bottom line.

Source Strategies, a San Antonio-based hospitality consulting firm that tracks hotels in Texas, said Omni's 11 properties in the Lone Star State have shown steady growth over the past five years. Revenue per available room, a common industry measurement for a hotel's health, has increased 36 percent since 2002, to $85.77 from $63.23.

The company has also won the J.D. Power & Associates award for highest customer satisfaction scores among upscale hotels over the past two years.

But Omni is still a difficult company to track because it's privately owned, said Greg Crown, vice president in the Dallas office of PKF Consulting, which advises the hotel industry.

"They've got a good reputation for running nice assets in good markets, and running them well," Crown said. "Mr. Rowling is very wealthy through his oil and gas holdings. The $64,000 question is his commitment to the organization. If that continues as it has been in the past, then there's every reason to believe [Omni] would continue to grow and perform well."

Although there are no guarantees, Caldwell said TRT Holdings intends to own Omni for a while.

"We buy businesses and we hold them," he said. "All of these businesses provide us opportunities to deploy capital and continue to grow."

In addition to running the chain of 40 hotels, Rowling oversees a two-thirds stake in Gold's Gyms. The other third is owned by a silent investor from Dallas, Caldwell said. Rowling also owns Tana Exploration Co., a new oil and gas firm that explores in the Gulf of Mexico, and a one-third share in Waldo's, a dollar-store chain in Mexico. The second-largest chunk in Rowling's portfolio is stock from Chevron-Texaco and PG&E, which bought Rowling's pipeline company in 1997.

Rowling, who has a picture hanging in his office of President George H.W. Bush on the links, is an avid golfer and a Republican fundraiser. He lives in an $8 million mansion that's adjacent to the Dallas Country Club and across the street from noted financier Sam Wyly. Rowling's investment company owns several courses across the country that are tied to Omni Hotels.

Caldwell describes Rowling as a "very intense businessman" and a "perfectionist." But he also says Rowling has a heart of gold.

The three-year-old Rowling Foundation donates to a large number of Christian causes. His Omni chain is reportedly the first hotel chain to ban pornographic movies from its guest rooms. The foundation brought in about $11 million in 2005, all from Rowling and TRT Holdings. It doled out about $2 million, according to filings with the Internal Revenue Service.

Rowling, who owns a large amount of real estate in downtown Corpus Christi, said he is "actively looking" to buy other property if everything goes as planned with his hotel and condo project.

"Hopefully this will be a catalyst for a lot of downtown residential development in Fort Worth," Rowling said, adding that he'd love to see the growth in Uptown Dallas duplicated around Cowtown. Rowling added that he's looking at all types of real-estate projects.

"There will be another hotel built, I would assume and hope, relatively quickly on our heels, maybe even by us," he said.

Hunting for real estate and drilling for oil are businesses Rowling likes and understands. They fit into Rowling's investment strategy, which is not too different from the way fellow billionaire Warren Buffett spends his money.

"I wouldn't compare myself to Buffett, but in some respects, I'm a little bit like him," Rowling said. "Technology is not something I understand. I like to invest in things I understand. We never made a tech investment."

The company does have a couple lines of credit it can draw down on, but TRT usually prefers to buy with cash, Caldwell said.

In that regard, PKF's Crown said there's no doubt Omni has the capability to be even more successful with Rowling's strong financial background.

Rowling said he's just been "flat-out lucky."

"I tell my kids I couldn't repeat what's happened to me," he said. "If you gave me $10 million free and clear and said, 'OK, go do that,' there's not any chance that I could do it again."

After investing in the hotel business for more than a decade now, Rowling is also fully aware of the volatile hotel market.

"Keep in mind we're only one dirty bomb away from the business going totally away," he said. "There are a lot of risks. We can lose our business overnight. Right now, things are booming."

"I've spent a lot more time on this property than most because I feel like I have something to add here."

Robert Rowling

Age: 52

Home: Highland Park

Investments: Owns Omni Hotels, Tana Exploration Co., major stakes in Chevron-Texaco and PG&E, two-thirds of Gold's Gyms, one-third of Waldo's dollar chain in Mexico, Corpus Christi real estate.

One of his latest deals: Omni convention center hotel, Fort Worth

Education: University of Texas undergraduate business, SMU law school.

On the side: His Rowling Foundation donates to large number of Christian causes ... Omni one of first hotels to ban pornography from in-room entertainment systems ... Says he's a "little bit like" Warren Buffett ... Was "Pioneer" committing to raise $100,000 during 2000 campaign for President Bush.

Quote: "I tell my kids I couldn't repeat what's happened to me. If you gave me $10 million free and clear and said, 'OK, go do that,' there's not any chance that I could do it again."


David Wethe, 817-685-3803


Copyright (c) 2006, Fort Worth Star-Telegram, Texas

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