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Forbes on How That ‘Giant Sucking Sound’ Made the Perots Another Billion Dollars

The cover story of the new Forbes is about how Ross Perot Jr. made another billion-dollar fortune for his family with the Alliance development north of Fort Worth. Writer Christopher Helman discusses that, as well as the relative disappointment of the Victory development in downtown Dallas and the influence Perot’s Hillwood company may have wielded to stifle that rival “inland port” project south of Dallas. (You’ll recall that county commissioner John Wiley Price is the subject of an FBI investigation for his role in those dealings.)

Helman notes that much of Alliance’s success comes thanks to free trade policies with Mexico, something that Ross Perot Sr. was wary of (referring to the loss of American jobs due to free trade as a “giant sucking sound”) as a presidential candidate in the 1990s:

Hillwood’s first big deal with Brookfield was the $900 million buyout of Verde, a warehouse developer with broad holdings that straddle the U.S.-Mexico border–perfectly positioned to benefit from the growing trade with Mexico and to deliver more cargo, more traffic, more growth to AllianceTexas. “We’re building spec warehouses, which is risky,” says Perot, who cites the same warehouse-upgrade dynamic as at AllianceCalifornia.

Thus has the Perot family come full circle. At the end of the day Perot Jr. isn’t scared of free trade, or of the U.S. losing jobs or opportunity to the rest of the world. “The U.S. has the most competitive spirit on the planet, and the economy is stronger than what people say it is,” says Perot Jr. “We complain about it, but America is still lean and efficient compared to the rest of the world.”

What does “Pop” think? The most famous protectionist of the past quarter-century is simply proud that his family is poised to prosper as long as free trade washes over America’s borders. “Alliance showed a lot of creativity and imagination, and it worked,” says Perot Sr.

The article also outlines how often Perot Jr. has turned to local governments for help in indirectly financing his efforts. Take Alliance:

Throughout the process Perot made sure various governments helped subsidize the growth. When he decided that he needed a new highway cutting through his land to make it easier for trucks to get from I-35 to DFW airport, Hillwood spent some $10 million on the engineering and proposed handing over 281 acres of his land for the road. That convinced the Texas Department of Transportation to build it at a cost of $42 million in taxpayer dollars. Hillwood also helped set in motion the far more costly ongoing expansions of I-35 between Alliance and Fort Worth and of I-820 between Alliance and DFW airport.

“He’s the ultimate welfare baby. He doesn’t do anything without subsidies or tax rebates,” says Sharon Boyd, who campaigned unsuccessfully against public financing of Perot projects in downtown Dallas. “He has a mentality that views the public sector as a fat pig that’s going to be slaughtered anyway, so it might as well be by us.”

Of course, it can be argued that these deals are a win for the local governments too:

Perot’s developments have added more than $1 billion to tax rolls and generate some $120 million a year in taxes for the city and surrounding towns. “AllianceTexas is a cash machine for our public partners,” says Perot.