What do you get when you cross a horse with a white elephant? The Las Colinas Equestrian Center.

"I bought a horse in the fall of 1984," recalls Jim Moore, a managing director at Merrill Lynch. "The equestrian center was so successful I had to wait from October until January to get in. It was clean, and it was safe when DCURD had it."

But DCURD's files suggest the place took more than its fair share of attention. "It was always management-intensive," Brune says. Others put it less delicately. "It's just sad. The place was turmoil," recalls Elizabeth Carpenter Frater, Ben Carpenter's daughter, who once rode there and also ran the tack shop. Like any unregulated luxury business where anyone can become an "expert" and customers have money to burn -- the art world comes to mind -- the horse business attracts more than its share of charlatans, and its denizens are famously disputatious. At one time or another, some of the best-known hunter-jumper trainers in North Texas have headquartered at the equestrian center, only to leave in a huff or be tossed out.

Still, in an endlessly escalating real estate market, DCURD might have quietly subsidized the place forever. But in 1986 came the seven-year real estate and banking trough. The last office building in DCURD's portion of Las Colinas went up in 1988; by 1989, the Carpenter family empire was teetering on the brink of bankruptcy. At the last minute, a number of investors headed by the New York-based Teachers Insurance & Annuity Association of America staved off foreclosure of the Las Colinas properties, pumping $289 million into the Carpenters' Southland Financial Corp. The Carpenters and their new investors formed a partnership to operate and develop the undeveloped portions of Las Colinas. The Carpenters continued to manage both Las Colinas and DCURD -- a state of affairs that wouldn't last for long.

Danielle Leak (left), one of the few remaining boarders, talks with Jenny Tell (right).
Danielle Leak (left), one of the few remaining boarders, talks with Jenny Tell (right).
In 1996, Linda Tedesco paid $20,000 for the exclusive right to give riding lessons at the equestrian center. She took up the boarders' cause, quit paying rent, and was evicted in 1997.
In 1996, Linda Tedesco paid $20,000 for the exclusive right to give riding lessons at the equestrian center. She took up the boarders' cause, quit paying rent, and was evicted in 1997.

Jake Hersman's gold Chevy truck is parked in front of his lawyer's office, a small storefront in Denton. Inside, Hersman and his lawyer, William Wood, wait.

"The reason I have to be here is because of the litigation," says Wood, who introduces himself as "not only [Hersman's] lawyer but his friend." Wood frequently finishes his client's sentences and is quick to fill gaps in the timeline when Hersman loses track.

Hersman, 44, is a short, dark, somewhat shy man with a bushy mustache and bright blue eyes. Possessed of big dreams, a cast-iron skull, and enormous charm, he resembles a smaller, slicker version of the Marlboro man. He was raised on a Denton-area ranch and attended Oklahoma State University on a football scholarship. When an injury ended his football days, he transferred to Texas A&M, where he graduated in 1980 with a veterinary degree. He spent two years in Miami, working on high-priced show horses and racehorses before he moved to Argyle, Texas, and set up his own clinic, which he sold in '89.

In January 1990, he presented DCURD with a proposal to open a veterinary clinic on a small corner of the Las Colinas Equestrian Center. DCURD was delighted. Carpenter had long envisioned putting a "first class" veterinary facility across Royal Lane and had even had DCURD option a $3 million piece of property for that purpose during the mid-'80s. Now here was Hersman, proposing to finance the whole thing at minimal cost to DCURD.

Hersman received an 18-year lease for $1,300 a month. Along with veterinarian Wes Williams, he built the 4,000-square-foot Las Colinas Veterinary Clinic. He paid his rent on time. He was low-maintenance. DCURD considered him a model tenant.

He soon set his sights on the equestrian center. Hersman had long dabbled in real estate development, and he knew that DCURD, in his words, "wasn't having a real fun time" managing the center. He says he can't recall who approached whom, but that by 1992, "we both realized there was potential" for Hersman to run the center.

His timing couldn't have been better. In 1992, Teachers Insurance fired the Carpenters' management companies and brought in new managers; the Carpenters, in turn, filed suit against their investor-partners, claiming they had been hoodwinked into giving up control of their properties. The investors also sued, claiming that Las Colinas was an economically troubled development still suffering the effects of the Carpenters' free-spending ways. In the end, the Carpenters lost control of DCURD as well as their development, settling the lawsuit by selling their interest in Las Colinas to Teachers Insurance for an undisclosed sum.

The new managers brought in by Teachers Insurance instituted cost-cutting measures. In 1992, they told DCURD to shut down Las Colinas' vaunted people-moving tram system, and they put pressure on the district to get rid of the deficits at the equestrian center, which were averaging more than $107,000 a year. (The cumulative deficit during DCURD's management had climbed to $861,000.)

"You have five ways to make money there," Brune explains. "One, board horses. Two, train horses. Three, give lessons. Four, hold events. And five, sell things, which relates to the volume of people coming through the doors.

"We found out very quickly that the first three ways conflict with the last two. And I can tell you categorically that the only way the equestrian center can cash-flow is to hold events. So we made a concerted effort to get the number of events up, and that would have involved investing in infrastructure, which would in turn have created a whole new set of conflicts."

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