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The New Costa Rica

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Photo: Amanda Pratt

Arguably one of the best-connected men in North and Central America, Alan Kelso has networked his way into meetings with CEO’s and money men around the world; his brainchild, Peninsula Papagayo, is a multibillion-dollar work-in-progress worthy of an anthropological dissertation: a planned community for the international eco–jet set. I met Kelso in his ground-floor office, which abuts the octagonal stone-and-glass clubhouse of the development’s Arnold Palmer–designed golf course (the next course is being designed by Jack Nicklaus). Fearing he might recognize our several-hundred-million-dollar-a-year income gap, I gazed at him with an air I hoped suggested I owned a continent. But Kelso, the nerdy child of a middle-class San José family, turned out to be completely unpretentious. Unlike most developers in Costa Rica, he is a native, one reason public criticism of the project died down. Kelso’s enthusiasm was infectious. Soon, he was driving me in his SUV to one of the 17 beaches on the peninsula’s 15 miles of coastline. "I used to come here as a kid to water-ski," he said, pointing to the waveless blue sea. "The fun we used to have here—it’s the most beautiful piece of land I’ve ever seen in my life."

Thanks to its physical splendor, Peninsula Papagayo has for years been at the heart of the struggle between Costa Rica’s environmentalists and entrepreneurs. Finally, in 1993, the government made a controversial decision to lease the property to a Mexican company with ties to Mexico’s disgraced former president Carlos Salinas. Before the Mexicans could get anywhere, they were sued for multiple environmental violations. In 1997, the project’s minority partner, Costa Rica’s national beer company, privately met with Kelso to ask if he would consider buying the Mexicans out. Kelso had made his name putting together the Los Sueños Marriott, a highly successful property 140 miles south. In the past years, he’d turned down all such offers, but this time, "I didn’t even have to think about it," he says.

For a sum he would describe only as the value of "maybe one or two villas today," Kelso bought out the Mexicans and went to work developing a master plan for the peninsula. He envisioned an exclusive, independent city. There was literally nothing on the land, so Kelso began planning and building roads and creating and hiring his own fire department, security, and emergency response network. He established a NASA-like telecom center that digitally controls everything from the water supply to electricity. "We have traffic mapped out for the next fifteen years," he says. Then he set about selling off pieces of the property to carefully selected "bell cow" investors such as Steve Case and Ross Perot Jr.—both of whom are building exclusive time-share villas—and bringing in a Four Seasons Hotel, which he knew "had a following of its own."

By the end of next year, Kelso will open a 382-slip marina, more than twice the size of any other in Central America. And he has hired the architect of Beaver Creek, Colorado, to help design a surrounding village, set to open in 2009. There are also independent homes for sale, some of which come with the option of service from the staff and restaurants of the Four Seasons. People like Madonna are rumored to have bought in. "I don’t know if we’re an ecotourism destination, but we are environmentally responsible," Kelso says. He keeps his golf courses green in part using desalinated seawater, and rather than trying to skirt Costa Rica’s law that all beaches remain public property, he runs a bus service carrying locals to the peninsula’s shores. "We had 75,000 visitors last year," he says, proudly. And whereas the Mexican group had planned to build 16,000 residential units on the peninsula, Kelso’s plan is capped at 2,500. "That’s what I wanted," he says. "I actually negotiated for less."

My three days at the Four Seasons were so idyllic, I could have been convinced Dick Cheney had brokered a world peace accord. I slept on the beach and kayaked in the ocean. One day, I hired a local boat captain to take me to some nearby islands for snorkeling; he dived in with me and placed a live spiderfish in my hand. At night, I had my choice of dining at any of the site’s five restaurants. The entire experience was almost dreamlike—I actually became suspicious that the monkeys singing outside my villa’s windows were on the payroll.

I left this paradise in a Hola! Rent-a-Car with a trunk that didn’t open, setting off south for the beach town of Nosara. (For the record, Kelso departed in a striped black helicopter.) When I arrived in front of my new hotel that night, I was greeted by Luis, the same man who had set me up with the one-way rental in the morning; he was there to retrieve it. This was indeed convenient, but having torn myself from the lap of luxury, I couldn’t imagine anything could console me. I was pleasantly surprised, however, as soon as I was ushered into the aptly named Harmony Hotel.

Three years ago, the land on which the Harmony sits was about to be turned into a condominium complex when American entrepreneur and environmentalist John Johnson bought it in order to save it. Having never been involved in the hotel business before, he hired a team of eco-consultants who designed a 24-room beachside property—including a yoga studio, a juice bar, and a pool—that not only aspires to be environmentally sound but also employs an on-site sustainability coordinator to make sure that it is.


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