While We Wait Like a Cargo Cult for Amazon to Arrive, Let's Do Some Work

Our pursuit of the Amazon HQ2 has direct parallels with Melanesian cargo cults after World War II.
Our pursuit of the Amazon HQ2 has direct parallels with Melanesian cargo cults after World War II. Wikipedia Commons
Obviously we all get why Dallas and other cities are genuflecting before the great god Amazon, devourer of all retail. Every city hopes devoutly that Amazon will deign to make it the home of its second headquarters, which, if you don’t mind my pointing out, is an oxymoron. Companies are like people. They either have only one head or they’re in the circus.

Whatever. I’m like anybody else and would like to see my city win. Just because. If the last brick of retail must be devoured somewhere, it might as well be here.

But I am struck by this: The extreme avidity with which we seek something like an Amazon relocation has literal and figurative parallels with the John Frum cargo cults that took root on certain Pacific islands after World War II. In those cases, the islanders, abandoned by the Japanese and American troops that had covered their islands with mysterious industrial booty, built mock airplanes and control towers out of bamboo and held military-style drills in an attempt to persuade a deity whom they called John Frum to return to them with fresh planeloads of cargo. Anthropology aside, it didn’t work as a business strategy.

The big difference between the John Frum cargo cults and the Amazon cargo cult is that the Amazon one will work, for somebody. Some city will be chosen. Amazon will rain down all kinds of real estate investment and employment and sales tax and property tax.

Whichever city wins will be better off and very proud to call itself the Great Devourer’s second home. But it’s still a cargo cult. Even if we get it, it won’t be anything we made. We’ll just lure it here with rituals of obeisance.

In the meantime, I assume there’s nothing wrong with trying to produce something ourselves. Something huge, like Amazon. Something out of nothing. Something of our own.

I heard a rich investor say on TV recently (just so you know where I get my business acumen) that the biggest returns come from investing in distressed properties. I assume that’s true for a number of reasons. Distressed properties are cheap. Investing in them is counterintuitive, so competition is reduced. The risk is high, but the payoff if you succeed is even higher. That makes the odds good, except that, of course, all odds are bad if you lose. The all-important ingredient, then, is knowing what you’re doing.

For as long as I can remember, people with money have been telling me why they can’t invest in southern Dallas.

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And where would we look for distressed properties in Dallas? That’s a joke question. We all know exactly where to look. The entire southern hemisphere of the city is distressed. And for as long as I can remember, people with money have been telling me why they can’t invest in southern Dallas.

Nobody south has good credit, I am told. The land values are terrible. It may look as if a vast workforce is available, but most of those people have never had full-time employment and don’t know how to hold a job. The region is beset by all kinds of social dysfunction. The political leadership always has its hand out for a toll.

On the other hand, the fact that everybody knows all of that is why the opportunity exists. And everybody is wrong about the opportunity.

All of those broad-brush clichés about southern Dallas are close cousins of racism, and they fall down for the same reason racism falls down finally: There’s no such thing as everybody. Everybody is not the same in southern Dallas any more than everybody is the same in white North Dallas.

Take the issue of credit. Credit worthiness is one of the things that got lost or glossed over in the recent brouhaha over low-rent housing in West Dallas.

You remember this one. City Hall launched a war against two landlord companies, one owned by the Khraish family and the other by the Topletz family, alleging that the two families charged exorbitant rents for tumbledown rental properties that were in violation of minimum city housing standards.

I don’t want to re-litigate that whole thing here, but both families reacted by deciding that at least some of their rental business was no longer viable, given the political climate. So they have been selling hundreds of small houses to the tenants, financing the deals themselves in an arrangement worked out by a shared lawyer, John Carney.

Only patience will tell if the deals are successful over time. In the meantime, I have been talking to Khraish Khraish, managing partner of HMK Ltd., and to Carney about how they are doing it. I have been especially curious about the issue of credit in southern Dallas. It’s an old interest of mine.

When Texas real estate imploded in the 1980s, all of North Texas was littered with bankrupt properties, and all of the major locally owned Dallas banks went belly-up and were sold. In 1988, North Carolina National Bank (NCNB), now Bank of America, acquired Republic Bank in Dallas and changed its name to NationsBank.

When the North Carolina bankers came to town, some business people in southern Dallas tried to use the 1977 federal Community Reinvestment Act to jaw-bone NCNB into investing in southern Dallas. Some token investment ensued, but the North Carolina guys all told me off the record when I interviewed them that their hands were mostly tied.

They said they couldn’t put significant chunks of money into the ventures that southern Dallas entrepreneurs were bringing to them because the entrepreneurs all had bad credit. Those entrepreneurs told me they had bad credit because that’s what happens when nobody will extend good credit to you.

As I attempted to signal above, my own business acumen has its limits. I think I sort of gave up on that particular puzzle at the time.
click to enlarge Jeff Bezos, founder and CEO of, The Great Devourer. - WIKIPEDIA COMMONS
Jeff Bezos, founder and CEO of, The Great Devourer.
Wikipedia Commons
That’s why I was so curious about the Khraish/Topletz home sales. Khraish and Carney have shown me their paperwork, and I have run it by people I consider objective sources. I’m still working on that. But everybody who has seen the contracts so far has shrugged and told me they look very generic, reasonable, standard issue, almost boilerplate. No big trickery or fraud meets the eye.

I have asked Khraish about it, and he has told me two things. First, not one of the families to whom HMK has extended mortgages could even hope to qualify for a mortgage at a bank or mainstream lending institution, because they are all too poor. Second, all of the people to whom they have loaned money have been paying rent to them for years and have either never missed a payment or have missed payments for legitimate reasons and then later made them up.

Now, if you’re the new mega-banker parachuting in from North Carolina, you don’t have any means of making those distinctions. You know that most people who are that poor cannot carry a mortgage. It doesn’t exactly make you a racist or a son of a bitch (the president can say it) if you opt for a general rule that the whole class of people is a bad risk.

But if you have been on the ground in that community for years doing business with people, then you know that the general rule misses some things. Within the class of people who are poor are individuals who will never miss paying their rent or will always make it up if they do. You can see into the class at the level of individuals, and that specific focus allows you to spot the business opportunity.

The Topletz family, by the way, has a decades-long history of investing in much more than residential property. They have been the de facto bank for countless small businesses and churches in southern Dallas that couldn’t get credit anywhere else.

The standard posture of the political and media elite in the city has been to treat entrepreneurs who do business in the southern sector as villains, as if by doing business with poor people they are the causes of their clients’ poverty. And, OK, I am sure there are some very exploitative business bad guys here and there in southern Dallas.

Meanhile, most big efforts to improve the economy of southern Dallas have been scorched-earth replacement and gentrification strategies, where southern Dallas gets improved by somebody coming in and kicking everybody out.

So here is my pitch. Instead of treating the long-term stable players like the Khraish and Topletz families as bad guys, what if we thought of them instead as experts? If we really look closely at either family, we will see that they are involved in philanthropy and in the larger community and are solid citizens themselves.

Why not go to them and say this: “You people look pretty smart. You have long track records of business success in the city’s poorest neighborhoods.

“Apparently we don’t know how to do that. Can you help us learn how to turn this vast distressed asset called southern Dallas into a great big steaming hot local business success like nobody else has got anywhere else in this country?”

Just saying. While we are waiting to see what John Frum decides about bringing Amazon to us, why not work on making some of our own cargo?
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Jim Schutze has been the city columnist for the Dallas Observer since 1998. He has been a recipient of the Association of Alternative Newsweeklies’ national award for best commentary and Lincoln University’s national Unity Award for writing on civil rights and racial issues. In 2011 he was admitted to the Texas Institute of Letters.
Contact: Jim Schutze