Tom Dundon is the prime money person — he calls himself “the bank” — behind the new Trinity Forest Golf Club that’s under construction in southeast Dallas. (Louis DeLuca - Staff Photographer)

Tom Dundon just bought the 33-story 2100 Ross Ave. building in downtown Dallas and is redoing the top floors for his investment firm’s offices. ( File Photo - Staff )

Not that long ago, just out of SMU, Tom Dundon just wanted to run a good burger joint. In a 1994 review of his Fort Worth restaurant, Izzy’s, a food critic raved about the cheddar fries.

“The fresh potato fries peeking out from beneath the cheese blanket were greasy and delicious, two words I’d never expect to say in the same breath,” she wrote.

Still, the critic gave the place a rating of only 21/2 stars out of five and it closed within a year.

Lucky for Dundon.

In the two decades that followed, he helped build a pioneering company that provides auto loans to buyers with marginal credit, a business concept that became a spectacular success.

Called “brilliant” and “unique” by some who know him, Dundon mastered the intricacies of lending better than he did making burgers and quesadillas. Perhaps more important, he also understood the vital importance of cars to people trying to improve their lives. To them, a car means independence and more opportunity for work.

Over the years, as the value of his lending business grew, Dundon’s early partners took opportunities to cash out. But he remained and increased his stake, becoming a billionaire, or close enough that no one will argue.

“Absolutely, Izzy’s failure was a blessing,” said Dundon, who turned 44 this month.

In July, he stepped aside as CEO of Dallas-based Santander Consumer USA, the lending firm facing regulatory scrutiny along with its U.S. parent. The companies are affiliated with Banco Santander of Spain.

Earlier this year, Santander Holdings USA, based in Boston, failed the Federal Reserve’s stress test for the second straight year. The Fed ordered the bank to improve its operations after identifying deficiencies in governance, risk management and capital planning.

Dundon said the issues didn’t involve him but did affect the approach of the parent company toward Santander Consumer.

“It was just apparent that we had different ideas about how to run a business,” he said. So he and the company agreed it was time for him to leave.

Dundon’s departure triggered an agreement for Santander to buy his roughly 10 percent stake for more than $900 million. He remains a director and adviser.

Now, he’s ready to start another chapter of his life.

He just bought a landmark 33-story downtown Dallas office building. He’s starting his own investment firm, DCP, for Dundon capital partners. He’s the prime money person — Dundon calls himself “the bank” — behind the new Trinity Forest Golf Club. And, he said, he owns nearly one-quarter of TopGolf, the fast-growing entertainment phenomenon.

“I need to be active,” Dundon said. “I need to have stuff going on.”

‘Brilliant executive’

Dundon’s interests range widely. Another new company he backs is trying to create a simpler, more enticing method for individuals to make nominal payments for online content, like this story. The journalism business certainly wishes him the best on that effort.

With the new golf course, located in southeast Dallas, one of Dundon’s goals is to bring elite tournaments to the city. The AT&T Byron Nelson tournament is moving from Las Colinas to the new course. Dundon is aiming even higher.

“I think major championship golf at Trinity Forest is a reasonable thing to hope for,” he said. The course is expected to open next year and the clubhouse in 2017.

Randall Stephenson, the CEO of AT&T Inc., calls Dundon a “brilliant executive and investor.”

“I couldn’t have been more excited when he coupled his business acumen and involvement in our community to make such a substantial commitment to the Trinity Forest project,” Stephenson said.

With TopGolf, Dundon just wants to help bring fun to a sport he loves. “Golf and entertainment become synonymous,” he said.

Some analysts already value the privately held company, which has about 20 locations in the U.S. and United Kingdom, at more than $1 billion. Dundon thinks it could eventually be worth more than Santander Consumer.

“It’s like bar and grill meets driving range done bowling alley style,” said Jonas Woods, Dundon’s friend and golf partner, describing the TopGolf concept.

There are microchips in every ball, tracking where they land. Players earn points for accuracy and distance. Some TopGolf locations in Texas are among the top outlets in their areas for alcoholic beverage sales. Reports of hours-long waits for hitting bays are common.

Woods, a former executive for Ross Perot Jr.’s ventures, runs his own real estate investment firm. The company owns Thanksgiving Tower, the building that houses Santander Consumer’s headquarters. Dundon is an investor in the project.

“We’re probably still in the early innings of Tom’s business career,” Woods said. “He’s not even close to done.”

Charlotte Jones Anderson, executive vice president and chief brand officer of the Dallas Cowboys, has known Dundon for seven years. They met when their oldest children were in first grade.

“He sees things differently and doesn’t get emotional about his decisions,” she said.

Low media profile

For all his financial success, Dundon has managed to keep a relatively low media profile here. His name has appeared in The Dallas Morning News about 30 times since 1987, when he played tennis for Plano Senior High School.

In fact, high school tennis accounts for a quarter of his mentions. He also has been in Alan Peppard’s society column a few times.

Only a half-dozen or so mentions have directly involved the business of Santander Consumer or its predecessors.

“There was no benefit to getting attention,” he said, explaining that since the company was in the subprime lending business and had made a lot of money, it was trying to stay under the radar.

For the second quarter of this year, Santander Consumer reported net income of about $285 million, up 16 percent from the comparable period a year earlier. Santander makes non-prime and prime loans on new and used cars. It keeps some of the loans and bundles others into securities that it sells.

Despite those profits, some are concerned about an overheating subprime auto lending market. Because of the mortgage crisis a few years ago, Dundon said, the term subprime carries a stigma even though there are key differences between auto lending and home lending.

“There’s no correlation between subprime mortgages and subprime auto except the word subprime,” he said.

One big difference, he explained, is that in auto lending, the assumption is that the value of the car — the collateral — will go to zero at some point.

Subprime auto lending made it through the Great Recession, the ultimate stress test for banks. Subprime home lending, based on assumptions that values would remain stable or even increase, did not.

“We are very disciplined in our underwriting to control risk,” Dundon said.

Since he isn’t running Santander Consumer anymore, Dundon said, his attitude toward attention has changed. “It’s no longer bad,” he said.

And, he said, people might find something useful in his story, lessons about persistence and coping with failure, lessons about taking good risks as well as believing in yourself and your partners. And, yes, lessons about luck.

Coming full circle

Over the past several weeks, Dundon has talked with The News through in-person and telephone interviews and communicated by email and text messages, telling his story.

On a recent Sunday, he sat for a two-hour interview at Dallas National Golf Club, where he is a member. The session offered a peek at how the business and social lives of Dallas’ business leaders intersect.

Dundon had just finished a round of golf and lunch with Jim Lentz, CEO of Toyota’s North American operation, which is building a new headquarters in North Texas.

Later, as Masters champion Jordan Spieth walked across the room, Dundon called his name and Spieth came over to the table. Spieth’s longtime golf coach Cameron McCormick is leaving Brook Hollow Golf Club to become director of instruction at Trinity Forest.

Dundon also talked briefly with restaurant entrepreneur Joe Palladino about a possible restaurant partnership. “My deal is we do a couple, and if they work we go,” Dundon said to Palladino.

He told The News that his restaurant venture would be "just for fun." In a way, though, it also would bring him full circle to the business he began 20 years ago. Izzy's.

“I knew from the beginning that the math didn’t work,” Dundon said of the failed Fort Worth venture. He said the long hours were brutal. He almost never left work, sometimes sleeping on the floor at the joint, located near the TCU campus. There was no profit.

After Izzy’s, and only about a year out of school, Dundon estimated that he was roughly $80,000 in debt. Partly because of the restaurant but mainly student loans.

He started working in finance with a group of associates at the Frank Parra Autoplex in Irving, one of the area’s major dealerships. The idea was to learn lending and then become consultants and train other dealerships in how to finance cars. His first boss was Tom Brower, one of the initial partners in what later would become Santander Consumer.

Subprime auto lending was in its infancy, Dundon said. Everything was done by hand and very time-consuming. Meeting face to face with customers, he taught himself the business.

“Just because someone has bad credit doesn’t mean they are a bad person,” he said.

Beginning at Parra, Dundon learned the importance of making sure borrowers — no matter what rate they pay — receive a fair deal; otherwise, they won’t pay back their loans.

He also learned that lesson about the importance of transportation. Some customers would pay their car loan before their rent or mortgage so they could keep going to their jobs.

“We had Frank Parra selling an extra 100 cars a month in subprime, up from one a month,” he said.

Business takes off

The consulting idea didn’t materialize, but after a slow start, the group of partners eventually began working with other dealers on subprime loans, mostly for used cars, and marketing the finance programs of banks.

In 1998, the group joined with FirstCity Financial of Waco to form FirstCity Funding.

“Instead of brokering the loans, we were actually making them,” Dundon said. “So we owned 20 percent of a finance company instead of 100 percent of nothing.”

Dundon’s stake in the enterprise then was 2.5 percent. A period of stunning growth in his business and personal fortunes was about to begin.

In 2000, HBOS plc — BOS stands for Bank of Scotland — invested, and FirstCity Funding became Drive Financial Services.

“We went from entrepreneurial to professionally managed at this time, and it was just luck,” Dundon said.

The partners resisted the change for a while, he said, but it was the best development that could have happened. Bank of Scotland, strong in systems and infrastructure, helped move the company into the next generation of technology.

“Tom thinks of the company as a technology company and not as a lender,” said Daniel Zilberman, a managing director of Warburg Pincus. “His business is faster and more efficient than any competitor, by a mile.”

In 2004, FirstCity Financial sold its remaining stake in Drive Financial to HBOS, and in 2006 Banco Santander bought 90 percent of Drive from HBOS and some of the founders for about $650 million.

Dundon, who then owned the other 10 percent, became CEO. He was the last of the original founders still involved.

“I’ve never been risk-averse,” he said. “I’ve always thought you should bet on yourself and bet on the people you trust.”

In 2011 three private equity firms, including Warburg Pincus, invested in Santander Consumer USA, and in 2014 the company went public. After the stock offering, the value of the firm exceeded $8 billion.

‘Like Shaquille’

Zilberman, who has known Dundon since 2006 and considers him a friend, said Dundon is “unique” in how he processes data and finds “simple and logical outcomes” in situations most people find complex.

“At what he does,” Zilberman said, “there’s nobody even in the same league. He’s like Shaquille O’Neal playing with a bunch of JV kids.”

In his years as CEO, Dundon was rewarded for that capability. He received substantial pay packages, with total compensation valued at about $110 million for the years 2012 through 2014, including stock option awards.

That provided a secure life and more, including a mountain home in Colorado and half ownership of a Falcon 900 jet.

He and his wife, Veruschka, have four children with another on the way. Their home near Northwest Highway and Inwood Road is a kids’ paradise, with a baseball infield, swimming pool, tennis courts and a golf green.

“I have never met him, but I’ve met some members of his family, and they are wonderful neighbors,” said Dallas attorney Jeff Tillotson, who lives nearby.

The landmark downtown office tower Dundon just bought is 2100 Ross Ave., once known as San Jacinto Tower. He said he is redoing the top floors for his investment firm’s offices.

The building has some history. It was the fictional home of the Oil Barons Club in the old TV show Dallas.

In real life, about the time Dundon was still at Plano Senior High, those top floors were the headquarters of Tyler Corp., a Fortune 500 company run by Joe McKinney, an associate of Jim Ling, the conglomerate builder who created LTV Corp.

In the end, Dundon’s golf partner and friend Jonas Woods might best sum up Dallas’ newest billionaire.

“He’s very competitive, whether in sports or business,” Woods said. “Probably in anything, for that matter.

“He doesn’t like to lose.”