I thought it would be fun to run a magazine

Ray Washburne's Texas Business is a case study in how not to run a business

Washburne graduated from Highland Park High School in 1979, and went on to Southern Methodist University. He majored in history and graduated in 1984. "I worked my way through college," he says emphatically.

Well, sort of. Washburne did indeed work, though it was hardly necessary to cover the tuition. Washburne's jobs were a series of entrepreneurial endeavors. He sold carpeting and rented small refrigerators to dorm residents, and he rented Coke machines to apartment buildings throughout the Park Cities. "Ray used to have cases and cases of Coke stacked up in the family garage," recalls ex-wife Caldwell. "His mother used to drive him around in her station wagon, and he filled the machines."

Washburne earned his commercial real-estate license by age 19, and soon fashioned himself a master in the art of the deal. While he would later let others cover his obligations, he made clear early on that he would seek, with the tenacity of a Rottweiler, redress for even a relatively modest sum owed to him.

On May 6, 1981, according to court documents, Washburne, then 20, agreed to loan two Sigma Alpha Epsilon fraternity brothers, David Wayne Schmidt and Bruce Busse Lawson, $10,000 to invest in a Pennsylvania real-estate deal. Schmidt and Lawson signed a promissory note pledging to repay Washburne $12,000 exactly 30 days later. The time passed, but the frat brothers never paid.

Washburne pursued them for nine years, long after he had launched a successful real-estate career involving millions. Finally, in 1989, he sued, asking a state judge for the full principal plus $11,191 in interest. Schmidt and Lawson fought the suit on the grounds that Washburne was charging a usurious interest rate.

In a deposition, Washburne explained that Schmidt and Lawson had first approached him in March of 1981, inviting him to make a short-term investment of $500 in a company called Realty General Associates Ltd; other college students, they said, were making large returns on their investments. Washburne said in his deposition that the two promised him he would get $600 back within 30 days. Washburne invested and he indeed made his investment back, plus a $100 profit.

His fraternity brothers' failure to repay the $10,000 investment--the funds for which he borrowed from a bank at 20 percent interest--forced him to "risk everything I had, including my plans for completing my college education," he said in court documents.

Lawson responded to the suit with a letter to Washburne's lawyer explaining that, after the investment failed, "David [Schmidt] and I did not receive anything in return except this continued harassment by Ray, with whom we entered into this matter in the spirit of fraternal brotherhood. Thus our shock that Ray chooses to go outside that brotherhood to dun us for funds which he well knows we really do not owe him."

The suit was dismissed on August 20, 1990, after the parties reached a confidential settlement. Washburne, by then barely 30, was making decent money, having worked six years for Dallas contracting giant Austin Industries.

Through his contacts there, and with the aid of his solid family reputation, Washburne rubbed shoulders with members of some of Texas' shiniest old-money families, including Lamar and Clark Hunt and Ken Murchison. He shared in the glory of the '80s real-estate boom, rehabbing several Oak Lawn and Highland Park luxury townhouses. There was more new money to tap into as well; Washburne eventually bought small pieces of Phil's Natural Grocery; The Bone and The Terminal, two Deep Ellum clubs; and massive tracts of undeveloped land in Carrollton, Flower Mound, Hurst, and Bedford.

On June 29, 1991, Washburne married Hockaday School graduate and Dallas debutante Mattie Caldwell. They helped raise funds for SMU and trained together for marathons. They appeared intermittently in Alan Peppard's Morning News society column and bought a 6,000-square-foot stucco home on Highland Park's Overhill Road, appraised in 1995 at $859,000. "It was a showcase home, really lavish," says Washburne associate Slaughter. "It was just the two of them, rattling around in this huge house."

Shortly after their marriage, Caldwell decided she wanted to take up motorcycle riding. She bought a 1991 Harley-Davidson Low Rider. "I did it much to Ray's great consternation," Caldwell says. "He thought it was unseemly. He would have preferred I ask his permission."

One night, she says, she rode the Harley, with Ray on back, to a party. "People there started teasing him, saying he was 'riding bitch' on his wife's bike. A few days later he went out and bought the most expensive Harley he could find, a Softail, for about $17,000.

"Ray can be impulsive," Caldwell says. "He's really just a kid in an Hermes tie."

With its clean black, white, and gold decor and midpriced menu, Mi Cocina's debut at Preston Forest Shopping Center was an instant hit.

Today, the chain (Washburne disdains the "McRestaurant" connotation of that word, prefering to call it a "collection") includes seven locations and 250 employees. Washburne shares ownership of Mi Cocina Inc. with Michael "Mico" Rodriguez, his brother Dick, and longtime SMU chum Bob McNutt, whose family owns the famous fruitcake-producing Collin Street Bakery in Corsicana. Mi Cocina Inc. is privately held, and neither Washburne nor Rodriguez will discuss its worth.

Expanding the restaurant business, especially choosing smart locations, appears to be Washburne's forte.

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