J. Patrick Butler: A Golf Course Community Developer Who Maintains A Humanitarian Touch

In previous issues of Golf and Lifestyle Magazine, we have introduced readers to a couple of golf course communities we have fallen in love with in Mexico's Baja Peninsula. Our most recent issue's story on Estrella Del Mar Golf Resort community presented readers with information on that secret gem in Mazatlan. Last year's stories on the El Dorado Ranch property and La Ventana Del Mar Golf Resort Community in San Felipe offered readers a chance to become involved in the exciting prospect that Americans can purchase vacation or retirement homes in Mexico at a fraction of the cost they would normally expect.

Our next quest was to interview the man behind these amazing opportunities for middle class Americans to achieve their wildest dream. That is, of affording a home near the beach, surrounded by a golf course resort. We met Patrick Butler at La Ventana Del Mar and had a wonderful discussion with this humble developer, businessman and environmentalist. His philanthropy projects impressed us as much as the seemingly impossible task he has successfully taken on in creating an affordable golf course community in a location that prompted some to call his plan crazy. They inferred that “nobody would invest in Mexico”.

When asked about the risks of buying in Mexico, he listed three key points and changes that favor foreign investment there. First, the change of Mexican law in 1996 creates the security of the Mexican Bank Trust (Fedicomiso), which holds the title and acts as the fiduciary, when foreigners purchase land. In the case of Butler's San Felipe properties, the bank is HSBC, the world's 2nd largest bank. Second, the piece of mind that American Title Insurance offers through Stewart Title Company, and thirdly the Mexican government is in favor of foreign investment. Tourism creates jobs faster than any other business. Mr. Butler is in the business of creating jobs so locals stay and work in a healthy environment. This ideal and his conviction to follow through (he speaks of WHEN things will be done, not IF things will get done), convinced us of his confidence that ”In another couple of years, La Ventana del Mar will be one the most beautiful resort in Mexico”.

GL: One with so much success in all aspects of business must have some secrets to share. What is your obviously successful business philosophy?

PB: “That we have a considerable responsibility to take good care of our employees. If we treat our employees with care, they will transfer that high-quality attention to our customers. This is an important part of our business that our managers abide by because this philosophy works. You need the boss/employee relationship, but it does not have to be so strict that it is condescending. I absolutely do not allow any type of management by intimidation. When the guests see the workers happy, it tends to make them feel good. They also will notice and recognize that you do hold your employees in high regard, which improves the visitor's experience. You go into some places, there are no smiles on any of the employee's faces, and when they see the management, there is very little interaction. To many of us in the hospitality business it is a turn-off.”

GL: Our R-Mac agents, Tom and Joanne Olson have done that for us here. They are practically giddy when we talk with them about what is going on down here, and have introduced us to a wonderful lifestyle in San Felipe.

PB: “A great word, 'lifestyle'. But of course, it is part of your magazine title. That is what we are trying to do here, is to sell a lifestyle. As a developer, I try to stay out of the expensive areas of Mexico. I like the second tier cities because you can reach a broader range of people. The other areas have gotten so expensive that you are marketing to the top 1 or 2 % American income group. The fact is that so many people work very hard all their life so they can get to a point where they can finally relax a little bit and enjoy semi or full retirement. For them to have a place to come where they can afford I, and enjoy a resort lifestyle, that's utopia!”

GL: That is one of the themes to explore in this story. You have provided a utopia here for the middle-class American, but also for the Mexican employees and the citizens of San Felipe. You have provided a paradise for them through a higher standard of living.

PB: “That is another one of my values. When I first saw this property in 1994 and I had an idea of what it could become. I brought my wife Doreen out here when I owned a little slice of the beach. I told her that someday I was going to build a golf course, some condominiums and a resort hotel here. She looked at me and asked if I was crazy. Back then there was limited capacity of electricity here, and there was no water line so all the water had to be trucked from town. There was very little development done out here. When I started to talk seriously about doing this, many people said I was crazy, that there would never be a golf course out here.

Then one of my neighbors came to me and said he was interested in selling his property. Another neighbor soon approached me to purchase his property. Initially I planned to have nine holes on the beach and then nine holes on the mountainside. When the second owner came to me, I realized I could have an 18 hole course on the sea side and then preserve enough land on the mountain side to eventually have another 18 hole course when golf builds up enough here in town. Therefore, for me it has been a passion, a labor of love to start out with the little vision back in 1994 and see the whole thing grow.

We are the largest employer in San Felipe, currently employing over 500 employees. When we open the new hotel that we are renovating (Club Habana), we will have another 150 employees. We also have a couple hundred employees in Mazatlan at Estrella Del Mar, so in Mexico I employ around 1,000 people. They have had better opportunities with us. Our wages are a little higher than other places in town. So other employers must follow suit to make sure their wages are fair. We maintain high standards for our workers. We uphold a very clean work environment to keep them healthy and happy while on the job. By doing those kind of things, we have very little turnover. They feel we care about them. I do some employee recognition programs. We do parties at the beginning of the season to get everyone ready for the residents and guests coming back. In the middle of season, we throw a Christmas party. By Mexican law, workers who have been on the job all year receive two weeks additional pay. We distribute that, but we also do a type of 401K in which they may put up to 12% of their income and the company matches it. Therefore, during the holiday season they all have a reasonable amount of money to make sure their families are tended to. It is a working philosophy, which is passed on through management to the employees so over time there is a level of expectation. Therefore, we build all of these things together. The American employees are primarily in the sales department. Everything else from finances, customer service, housekeeping, and maintenance are all part of Mexican management teams.”

GL: You probably produce a greater buy-in by giving employees more responsibility. You must have a line out the door of people in town who want to work for you.

PB: “For people from town who want to work in our line of business, we generally have an opportunity for them. We do many educational programs where we bring opportunities here. We just hosted a hotel-education management group who presented a week's worth of courses in hotel management. So, we try to give them continuing education in their field to keep their skills sharp.

The other important thing we do in town that is kind of a personal thing for my wife Doreen and I, is the educational program we do for kids. Las Amigas is a ladies group in town whose purpose is to identify worthy students that do not have the financial resources to continue their education. This group has been providing scholarships to students for 11 years. We started a scholarship program ourselves, and we do one with them. In Mexico, children are only required to go to school until age twelve or sixth grade. After that, if they want to continue they have to pay for school. In a town like this where 25% are fishing families, many of the boys go to the sea with their father, so they are 12 years old and all that they know is fishing. Between the Las Amigas Club and our organization, we take about 250 students a year and help them financially through junior high. Then my organization takes about 40 students per year and provides them scholarships throughout high school and university. Therefore, at any one time we will have maybe 120-150 students in school. The Las Amigas Club also has a college education fund. Because of the Latin culture, they want to return here to be around their families, so when they get out of school they come back and work in the area. Therefore, you have people in the community who have had the opportunity to go to college and they encourage other children to do the same. We have been doing this for over 11 years, so now we have professionals in town that we first met as small children and have helped to put through school.” Over time, this also produces a much more educated vote for Mexico.

GL: The other way you do the right thing compared to other developers is the environmental factors that you focus on, like the salt-tolerant grasses here on the golf course and the sea-turtle sanctuary in Mazatlan.

PB: “With the depletion of the world's fresh water supply, the creation of the paspalum (salt tolerant) grass, which is part of the halophyte family, is important. I found out about it 10 years ago and went to see it at a halophyte experimental farm. The scientists were generally thinking the purpose of the turf was for soccer and other sport fields. Golf courses came to my mind, because fresh water is very expensive in Mexico. I was able to acquire the exclusive rights to the patent and I have the breeding rights in Mexico to this particular variety of paspalum called Sea Dwarf. It is primarily used for greens, but we decided here at La Ventana Del Mar to use it from tee to green on the entire course. We are in a protected biosphere reserve zone at El Dorado Ranch, so we have to get

Federal environmental impact approvals as well as state approvals for everything we do. When I told them we were going to have a golf course out here, and that the grass we would use did not need a fresh water supply, they could not fathom that. So, we got federal permits for wells in the desert, which have a higher level of salinity. In order to grow an ordinary Bermuda grass, you have to limit the level of impurity to around 1000 parts per meter (ppm). That is an expensive desalination process because of the amount of electricity needed to get the water to that low level of impurity for irrigation purposes. Sea Dwarf grass will take up to 10,000-12,000 ppm. As a comparison, seawater is 35,000 ppm. One of the things we needed to do to market the resort to the middle-income group is to have reasonably priced golf. Therefore, we needed to find an affordable way to water the courses. Normal water rates would be around a million dollars in Mexico for irrigation of a firstclass resort golf course. Development of the varietal of salt-tolerant halophyte, Sea Dwarf, helps to keep the maintenance costs down, so affordable golf is achievable at the resort.”

GL: There are stories of other developers who do not take care of the community as you do. Do you think that's part of the reason why you are so successful here?

PB: “I think that has a lot to do with it, the other thing is that I see us as community- builders. I am interested in what I call 'sustainable community development'. We want to go in and do something over time in a population and make some life-changing differences in a community like this. So, instead of being a developer that looks for a piece of property to build a couple of hundred condos and sell them out and leave we like to do things on a larger basis, even though it's riskier. Over a period of 10-15 years, we not only do the development work, but the community work so we can make that meaningful difference. That is what differentiates us; there is no bureaucracy or politics running our business. It is just the basic philosophy of doing the right thing.”