5 Things I Wish Someone Told Me Before Becoming CEO
An Interview With CEO Ricardo Santa Cruz
CEO of RSC and Partner of RLH in Mandarina development, Ricardo Santa Cruz has more than 12 years of experience in land acquisition and real estate development in Mexico, having negotiated and acquired more than 4,000 acres of strategic development property on the Pacific Coast. He is a partner of RLH’s Mandarina project and was responsible for negotiating the purchase of its 640 acres. Ricardo currently oversees all sales and marketing efforts for Mandarina. Ricardo holds a Bachelor’s Degree in International Business from the University of Colorado at Boulder and completed the AD2 program from the IPADE Business School. He is a member of YPO and serves on the advisory board for BBVA-Bancomer in Nayarit. Both a U.S. and Mexican citizen, Ricardo is not only fluent in English and Spanish, but truly bi-cultural.
Can you tell us about your journey to becoming CEO?
Two years after graduating college at the age of 25, I started my first company called American Healthcare Products, a medical supply company. While I still continue to own this company and serve as its chairman, I first began my career in real estate development at the age of 34 when I formed my own real estate development company, which is currently RSC.
When I first started to get involved in real estate, I initially became involved in what is currently a project by the name of Xala located south of Puerto Vallarta in the Costalegre region of Jalisco, Mexico. At the start, I had consolidated close to 600 acres of land for an envisioned master planned community. While doing this, I met and began working with Juan Bremer, his brother Jerónimo Bremer and Allen Sanginés-Krause, who are still my business partners today and are the founders of the real estate investment fund currently known as RLH Properties.
We placed the 600 acres I had initially acquired into the fund and began securing more land together. Through this land consolidation and master planning phase of the project, we were able to keep raising additional capital throughout the years via the fund my partners had established. Today RLH Properties is a publicly listed company on the Mexican stock exchange with a market cap just under US$1 billion dedicated to the acquisition, management and development of hotel assets in the luxury and ultra-luxury sector. We now have some of the most exciting real estate and resort developments in the country and are at the forefront of innovating this particular industry in Mexico.
What do you think makes your company stand out? Story?
There are two main advantages that make RSC stand out from any other developer in Mexico.
Number one, there are very few companies, especially in development, that are truly involved in every process. From the early stages of land acquisition, government permitting, the creation and execution of developing the master plan to the sales, marketing and planning that goes all the way up to the end user, RSC stays involved throughout the entire process.
The second key ingredient is the competitive advantage of being a dual US and Mexican citizen and on top of this, being bilingual, linguistically and culturally. This gives us a competitive advantage. We understand the US cultural mindset, the concerns of investing in a foreign country and can directly translate what clients are looking for and be present in the entire process. Thanks to my dual-background, I can bring US investors into their comfort zone, understand from a cultural aspect potential concerns and can translate into real action and results in Mexico.
Being a true American and Mexican partner, RSC is a rare partner where investors have access to the best of both worlds.
Are you working on any new or exciting projects now?
Yes! Nestled along a one-mile stretch of pristine beach, our latest project, Mandarinais the most significant new resort and residential community to grace the shores of Mexico in decades and will draw the most discerning buyers and travelers from around the world to Riviera Nayarit. Just under one hour north of Puerto Vallarta, Mandarina will feature one of the world’s first collections of One&Only branded residences. One&Only Mandarina Private Homes will debut alongside One&Only Mandarina, Rosewood Residences and Rosewood Mandarina, as well as the world-class Mandarina Polo and & Equestrian Club replete with state-of-the-art polo grounds, dressage and jumping arenas, stables and more.
In addition to this, my first 600 acre property, which I mentioned earlier, Xala, is now a 3,000-acre oceanfront property, which will be the site of the new One&Only Xala, an authentic, One&Only Nature Resort.
What is your definition of success? Has it changed since starting RSC and if so, how?
In general terms, success is when you can develop a project that balances out three main pillars. The first two are being environmentally and socially responsible. When you can create a unique project that is environmentally responsible by having the smallest impact possible on the site, that is the first step to success. The second is being able to truly say you are incorporating and improving the surrounding community. Many developers say that, but very few are involved at a grassroots level the way RSC and RLH Properties are. The third is generating profitability for shareholders. When you can balance these three pillars, true success is achieved.
Can you share the most interesting story/lesson that happened to you since you began leading your company?
Since starting RSC, one of the biggest lessons I’ve learned was during the process of land consolidation for Mandarina and Xala, which involved the negotiation of 4,000 acres of strategic coastal property and more than 120 families. Because these sites were considered “Ejido” land, meaning communal properties regulated under Mexican agrarian law, one of the requirements to buy these coastal properties owned by 120 individual families, was to have every single family member sign off on the sale of every single piece of it. Even if the land was in the father’s name, everyone including the mother, father and all the children over 18 years of age (no matter where they were living in the world) had to agree otherwise the deal was considered invalid. As you can see, putting together this jigsaw was high risk and a very ambitious project.
Through this process, I learned to be very patient and became fully involved in knowing the community inside and out. The only way this type of development can work is by making a long-term commitment to the community.
Keeping your word on being socially inclusive of the community goes a very long way when you reach the state of construction and development itself. If you are honest and truly integrate the community, when it comes time, you will have their full support for your project. In my case, I’ve worked more than 10 years in the surrounding communities of our developments before even breaking ground on the construction of the developments.
How is your company working to be more sustainable?
My passion for Mexico is present in my deep involvement in developing Mandarina alongside RLH Properties. From the initial land acquisition mentioned earlier and my efforts to make a positive impact on the adjacent small town of El Monteon (population approx. 6,000 ppl), Mandarina has since invested more than $3 million and counting in the neighboring community infrastructure, including a water treatment plant, potable drinking water, a church and a beach club replete with oceanfront swimming pool and restaurant, which attracts many local visitors every weekend. With Mandarina’s ongoing initiatives to work with the local community, the project has received great local support as it has already enhanced their way of life and will bring jobs and education closer to home, allowing families to stay in the area for generations to come. We also started a foundation to continue raising more money to fund additional projects and educational programs for the surrounding communities.
Another example of our sustainable efforts at Mandarina involves our preservation efforts in environmentally sensitive areas such as the mangroves and estuary. These fragile ecosystems will be kept living in their raw form and never be developed. Being a very low density project, Mandarina has 650 acres and the amount of homes is only 120. Low density decreases footprint and increases privacy. With less surrounding neighbors, there is a more real communion with nature.
In addition to this, great care was taken in protecting the magnificent trees and nature present throughout. Within the hotel portion of the development, there are no cars, only golf carts and bikes. Also, owners are only able to travel via cars upon arriving to their homes. Within the property, they will use golf carts or bikes. By implementing green transportation, this allowed us to make the roads narrower and preserve the lush tropical jungle, Mandarina’s biggest asset on property.
To also provide some of our preservation efforts within our other development property, Xala, we have been lobbying the federal government for more than four years and are about to begin a major agricultural pressurized water system that will serve 230 farming families within a total surface area of 5,300 acres. This will allow them to farm a much wider range of higher value added products because they are currently dependent upon rainfall which is scarce in this region of the country. Also, on the property there is a turtle camp, which has existed there for 20 years. Our team has been supporting them financially for the past seven years and as a result, the amount of additional incubated turtle releases they do each year has increased more than 200 percent. Land preservation and being socially responsible are two of our key principles at RSC and RLH Properties.
Can you share how other CEOs in similar industries can do the same or make similar efforts in positively affecting the environment and those they come into contact with?
- Take time to get involved with the surrounding community early on. It is in the best interest for both the developer and the local community. At end of the day, by doing this, your development will help outlying communities. Once the owners or guests of your development leave the gates, they will want to see what is happening locally and experience the culture. If you benefit those people and they are happy, this can only bode well for your success in the long term.
- Take time to carefully craft your master plan. In development, there is a tradition of the cookie cutter model, which involves the developer trying to maximize the density and profits right from start. If CEOs really take time to make a more conscientious master plan, they don’t have to sacrifice the quality of the development. They can sustain the environment, be socially inclusive and still be profitable. Buyers of high end homes are sophisticated and you have to go the extra mile in creating a more unique and thoughtful product. The traditional master planned communities that are not good stewards of the land and their surrounding communities that simply offer more of the same will struggle.
What advice would you give to other CEOs or founders to help their employees to thrive?
What I think is very important in order for employees to thrive is having a clear vision for your company and what each employee’s role is in contributing to this vision. Empower them with very clear roles and goals within your organization so each member knows exactly how they are contributing to the big picture and then let them run with it. By doing this, they will see they are part of a grand process and not get weighed down by the day-to-day tasks. This will empower them to pursue and fill out that role to the best of their ability.
What are your “5 Things I Wish Someone Told Me Before I Became CEO” and why?
1) Don’t give in to external pressures and stay true to your vision.
2) You will put in more hours than any of your employees.
3) The challenge is not in borrowing money, but in paying it back.
4) Automate or delegate the mundane tasks and focus your energy on the strategic and creative tasks.
5) Fire quickly, hire slowly.
