(05-23) 04:00 PDT Borrego Springs, San Diego County --
The desert backcountry of San Diego County has always been a great place for
long shadows. But in Borrego Springs right now, nobody throws more shade
than a slim, 6-foot newcomer named Gregory Perlman.
Sporting sunglasses and stubble, Perlman strolls the grounds of the
oldest and foremost hotel in town, then stops at an outdated fountain.
"This is terrible," he says. "This is 1982 Palm Springs."
The 42-year-old Perlman owns this place. And the place up the road. And
several other places. Since 2004, Perlman and his investment partners have
bought up thousands of acres here, including Borrego's largest
golf-and-vacation-home community, now known as Montesoro.
In December, his company, GH Capital, added the town's marquee hotel, La
Casa del Zorro.
Perlman has spent almost $45 million so far - but he has also closed down
one of the town's two grocery stores and inadvertently bulldozed a nearly
two-mile path through Anza-Borrego Desert State Park. On June 30, he'll
shutter La Casa del Zorro for a summer overhaul, the first time anyone can
remember it closing for an entire season.
Borrego is buzzing. Are Perlman and his partners visionaries who
understand that this patchwork of ranch houses, mobile home parks, golf
courses and desert dirt is the last piece of paradise left in Southern
California? Or are they obnoxious latecomers who will ruin it?
"They're doing what they damn well please," said Chuck Bennett, a retired
engineer who has been involved with Borrego civics for more than a decade.
"Anybody who has invested here is rooting for them," said Gwenn Marie,
president of the Chamber of Commerce.
Perlman's new neighbors can't complain when he calls this desert outpost
"the most beautiful setting in Southern California that doesn't look at an
ocean." They can only assume that the hundreds of fancy homes he wants to
build will secure jobs and boost property values.
But if you ask Perlman about the town's main drag, Palm Canyon Drive,
he'll tell you, "The way it is now isn't quaint. That needs to be fostered."
If you ask Anza-Borrego park Superintendent Mark Jorgensen, a 30-year
resident, how the new guy is doing, he'll say, "We didn't know there was
anything wrong with us."
Borrego Springs tends to seduce entrepreneurs, then exhaust them.
Like Palm Springs, Twentynine Palms and Joshua Tree, this desert retreat
cradled by dry, dramatic mountains lies a few hours' drive from Los Angeles.
A desert island
But Borrego is a desert island: 70 square miles of unincorporated town
(no chain stores or restaurants), surrounded by the 935 square miles of
Anza-Borrego park, the biggest state park in California.
Whether you live in a luxury home by De Anza Country Club or a mobile
home at the Roadrunner Club, you probably buy groceries at Center Market and
stop for a cold one at Carlee's Place. Come October, if you're not marching
in the Borrego Days parade, then you'll know people who are. The community
telephone directory, spiral bound, still lists four-digit phone numbers
because everybody's number starts with 767. When the fire district buys a
new ambulance, it's front-page news in the twice-monthly Borrego Sun.
Paved roads, telephones and outside electricity didn't arrive until the
1940s. James Copley, the late publisher of the San Diego Union-Tribune
newspaper and one of Borrego's key boosters, took over the town's first
hotel in 1960, renamed it La Casa del Zorro and built a 42-acre oasis of
private villas and formal service.
1980's pipe dream
Up the road from the Casa, Rams Hill was supposed to transform the town
in the 1980s with its golf course and 1,000 new houses. Instead, it fell
into bankruptcy - twice - leaving about 700 homes unbuilt, 18 golf holes
unfinished and nine gone fallow.
This history is known to Perlman. He knows that more than a quarter of
the area's 2,856 residents are over 65, and that many flee every June when
five months of 100-degree days begin. He can quote Borrego's hydrology
reports in detail - Borrego is slowly drawing down its natural aquifer to
meet the demands of citrus growers, golf courses and vacation lodgings.
But he's an outsider, living in Encino with his wife and three children,
working out of GH Capital's office in the Sherman Oaks district of Los
Angeles, visiting the desert every week or two.
Raised in Los Angeles, Perlman went to college at Boston University's
School of Management, met his wife, then came back West.
In the early 1990s, he began buying and operating apartment buildings
whose tenants rely on federal Section 8 subsidies. GH Capital owns about
12,000 of these apartment units, which translates into a steady stream of
federal dollars. HUD records show that all of Perlman's buildings are in
compliance with federal standards.
By 2002, Perlman branched out. First, he bought the Holiday Inn in the
Los Angeles neighborhood of Brentwood, and spent $12 million to create the
boutique-style Hotel Angeleno.
In July 2004, a business associate told him about a distressed property
called Rams Hill, a 3,100-acre planned community in the dry outback of San
Diego County, midway between the mountain town of Julian and the Salton Sea.
So Perlman laid eyes on Borrego Springs for the first time, went looking
for dinner at La Casa del Zorro and was barred from the dining room for lack
of a jacket. He ate in the bar with two associates, taking in the darkened
desert outside and the frolicking foxes painted on the walls ("zorros," in
Spanish).
It felt like "The Twilight Zone," he says, but he also felt more
genuinely rooted in the desert than any place he could think of in Palm
Springs or Palm Desert.
Golf courses purchased
So he bit. Two months later, GH Capital bought the golf courses and
hundreds of unbuilt lots at Rams Hill for about $15 million. Perlman
announced that golf designer Tom Fazio would refashion 18 of the holes.
Later would come 600 new homes. The new name would be Montesoro.
"The town was pretty excited," said Jorgensen. "But some people set back
with reservations and said, 'We'll see.' And I'm one of them."
The first bump in the road came when the Wiles Group, which GH had
retained to manage Montesoro, dropped out of the project. Amid legal
wrangling, the course fell behind schedule.
But Perlman kept buying. In mid-2006, he picked up the Whispering Sands
Motel and converted it into employee housing. Then he added about 1,400
acres near Borrego Air Ranch (including a 5,000-square-foot mansion and
airplane hangar). Then the Borrego Valley Foods grocery store.
That was the second bump. Perlman had hoped to close the store - "one of
the most horrible stores you've ever seen" - then reopen it with a more
upscale focus.
More than a year later, the building still stands locked and silent,
produce shelves and checkout stands gathering dust. Perlman insists he is
waiting for just the right person to take it over.
This misfire raised doubts about the new guy, but the events of May 8,
2007, raised a few more.
That day, an employee of Montesoro Golf & Social Club was assigned to
blaze a trail for off-road vehicles on the land near Borrego Air Ranch.
Somehow, he crossed property lines and by the time he was done, the
bulldozer had scraped more than a half-mile of tracks across property owned
by the nonprofit Anza-Borrego Foundation and Institute - and almost 2 miles
of tracks within the state park itself.
"A real jaw-dropper"
"That was a real jaw-dropper," said Gwenn Marie. "We were all: What?"
Perlman and Montesoro officials quickly apologized and took
responsibility. Still, Jorgensen told the Borrego Sun he was "appalled" by
the "totally irresponsible" act. Jorgensen has passed the case to the state
attorney general's office, which is expected to negotiate a restitution
price with Montesoro.
"We'll make it right," says Perlman. "This was just a total mistake."
Several weeks after that incident, Perlman's team staged a sales blitz
and announced 52 homes and lots sold, for a collective $33 million, in a
day. But the economy was slowing, and the mortgage market was headed toward
upheaval. By Perlman's count, 18 of those deals fell through.
Still, he kept building and buying. In November, after an estimated $20
million in work, the golf course opened. Then, in December, Perlman bought
La Casa del Zorro and furnishings for $4.5 million.
For Borrego Springs, this was the abrupt end of an era. The last
remaining Copley enterprise in town, the Borrego Sun, was left to cover the
firing of 30 of the hotel's 115 employees.
La Casa del Zorro "was losing a lot of money," Perlman told a Sun
reporter, explaining the layoffs and low purchase price. Buying the place,
he said, "further confirms our long-term commitment to Borrego."
With the help of the private equity firm Lubert-Adler, Perlman plans to
spend many more millions here, remaking the hotel as a lively oasis where a
new generation of vigorous visitors might be inspired to buy his lots next
door.
But Perlman wants to reopen in October and capitalize on the fall tourist
season. Instead of dropping in every week or two, Perlman expects to spend
three days a week here, sweating details of his plans. When it comes to
details, he says, "I'm very, very particular."