Markus Naerheim
Markus Naerheim

Spoiler alert! - Read Chapter 5

Bay of Hope - Chapter 6

6

 

Sinaloa, Armando Lobos’ home state, was known for being a particularly trigger-happy, knife-plunging, pugilistic region of Mexico. Even before the marijuana boom of the 60’s, it had been common for people to die over a slighted ego. The killing was also cyclical in nature: after a member of one family was murdered, a relation would even up the score. It was the sort of eye for an eye justice in a country where if you were born poor on the rancho, official justice was an abstraction. With the drug economy, the culture of retribution only intensified.

After the visit from the cartel, Armando made a prudent decision and left for the city, in this case Mazatlán, where he invested in a parcel of coastal real estate north of town with the thought of building a small hotel or maybe a few homes he could resell at a hefty markup to tourists.

He had done his research. Talking with the local fishermen in their vernacular and mimicking their humility, Armando learned that they had been promised construction jobs for a future hotel in the area. The parcel he eventually discovered through his inquiries and purchased was that of a lone holdout, a stubborn fisherman who had also heard rumors of the hotel and had refused to sell. Using his country charm Armando befriended the man, got him drunk on tequila, boasted about his love for fishing, and made him an offer he couldn’t refuse on the promise that between hermanos, and on the faith of the Virgin of Guadalupe, Armando wouldn’t sell out.

The land, which once belonging to an ejido and had subsequently been converted into private property by the owner, was an outstanding parcel, the rest having been purchased by private investors who were planning to develop large tracts of beachfront property north of the city. This parcel, located on the edge of the proposed development, turned out to be necessary for certain infrastructure required in the development plan, and it was now in Armando’s able hands.

One afternoon, businessmen came to Armando’s apartment to discuss the prospect of him selling, offering double what he had paid. Armando, though not a licenciado, had been in the agriculture/drug business for many years. Nearly thirty, he was by no means the greenhorn they thought he was. He could read and write and was particularly good with numbers. He was also politically savvy, as his departure from the rancho illustrated, and now he managed to decline their offer while indicating that he was still interested in doing business.

The next time Armando met with the developers, the mayor of Mazatlán and an official from the Secretariat of Tourism were present. Over a private dinner at the mayor’s family residence, they discussed his political affiliations, indicating that if he were loyal to the ruling party, he would be rewarded. He was offered four times what the parcel was worth, and though that was still below market value once infrastructure was provided to the area, Armando accepted. The relief on their faces was evident and it quickly turned into a celebration in which he was welcomed into the fold. They recognized themselves in this clever young man who knew how to make a profit while having enough sense to respect his elders and betters. The government-subsidized hotel was built, boosting the mayor’s popularity while providing jobs for the local population, handsome returns for the developers, and revenue for the city coffers.

From the conversation at the dinner table Armando understood that regional development was to be extensive. So instead of waiting for the favor to be returned, as it likely never would, he spent his time cruising the deserted northern coast in his truck, talking to locals, mostly rural types like himself, smallholder farmers and subsistence fishermen; asking about the weather, the rain, and most importantly the land; and these men, recognizing their peer in speech and manners, opened up to him. In this fashion, Armando bought small isolated parcels over a twenty-mile stretch of beach north of the city.

When additional hotel projects were planned farther up the coast, developers found out time and again that Armando owned a parcel within the proposed project boundaries. He was always agreeable and careful not to offend the powers that be, making good money without being greedy, illustrating that he was a loyal member of the party. He sold five more parcels this way, amassing enough money to invest in something of his own with the help of some partners.

Fortune smiled on him when at a construction industry convention in Monterrey, an American hotelier discussed the concept of timeshares with him in broken Spanish, explaining that it was the next big thing in vacations and lamenting that so far no one was interested in working with him, as an outsider and particularly a gringo. No, they were perfectly content to build their hotels in the government way, when they could really be making money. Using his skill at organizing that had served him so well on the rancho, Armando brought the American, the mayor, and his contact from the Secretariat of Tourism together and proposed they build the first timeshare in the state. While timeshares may have popped up in other parts of the country, they had not yet arrived on the Sinaloan coast. This was the meeting the American had been unable to secure, and it would prove providential, changing the tourism landscape of Mazatlán forever.

The gringo businessman’s argument was convincing. Americans wanted to vacation in the sun and, given its proximity, Mexico was the logical choice. Mexico had the added advantage of being cheap, compared to the warm coastal states of the United States. Given the prohibition against foreign ownership of coastal land in Mexico, the timeshare provided the perfect solution for individuals who routinely vacationed in Mexico, particularly snowbirds from the north. The Mexican Government would lease the land to Armando’s company, which would then sublease to its clients. The year would be divided up in weekly increments so that the units in question could be leased up to fifty-two times at fractional prices that would result in long-term profits well above any one-time sale to an individual owner. In addition, because the property was shared, each temporary tenant would have to pay annual maintenance fees for the property, which would provide added revenue and local employment.

Ultimately, the state government and the Secretariat of Tourism agreed to the project. Armando went in with the developers he knew, who purchased the necessary adjacent parcels, and they leased the land to the American hotel chain. The developers were paid to build the hotel, Armando kept the deed to several units, and the government provided the new paved road to the front gates, in addition to water and power. Sanitation was managed the old-fashioned way: via a sewage pipe that emptied into the ocean. The project included additional perks, including one unit gifted to the local government for use by the mayor for official purposes vaguely described.

Still Armando was not satisfied. It was one thing to buy land and lease condos, but quite another to get a handsome building contract. So he repeated his success by buying more land to lease to the American hotel chain, but this time he also created his own development company, contracting builders to complete the project while taking a healthy cut on what he charged the Americans. Armando did this for three other projects before pursuing government contracts. Known as someone who greased every hand and did it handsomely, he was funneled one public works project after another, with roadways becoming his specialty. But in time the work dried up along with the economy. Armando’s last project involved infrastructure improvements to the historic downtown of Mazatlán, a favor to the mayor who owned a significant amount of real estate in the area.

 

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