The Last Resort

When Steve Smith bought the remote Big Bend town of Lajitas in 2000, he dreamed of building a lush, five-star retreat that would attract the likes of Tiger Woods and Tom Cruise. Instead, he paid dearly to learn an age-old lesson: The desert always wins.

December 2007By Comments

At first blush, it’s almost impossible to tell the age of a resident of south Brewster County, and there are two good reasons for that. The first is the effect of the arid Big Bend environs, of the baking sun, beating winds, and unrelenting dust. Faces age faster in the desert, the skin browning and creasing and toughening up in ways that city and suburban dwellers don’t have to worry about. But the other reason for the difficulty in determining someone’s age out there cuts the other way. There’s a light in people’s eyes in far West Texas, a joy that comes with living exactly where and how a person wants. Make no mistake, desert life is hard, and the sacrifices required are made hourly. Nearly every living thing a desert dweller encounters—be it plant, bug, or beast—is capable of drawing blood. The round-trip drive to Alpine for big groceries is 190 miles. During droughts, people will live on water saved in rooftop rain-catchment systems, showering and flushing the toilet once a week. During sudden storms, their power will go out, and they’ll be trapped wherever they are, the roads made impassable by flashing creeks trying to find the Rio Grande. And the heat beats anything foretold in Revelation.

Still, when the sun sets each night, when the dry desert air turns gold and the clouds go from white to purple to orange to gone and a desert rat can put himself to sleep by counting stars, that hard life is worth it. It brings a satisfaction, not of beating the desert but of surviving it. The soul stays young, and that youth glows in the eyes, as lined as they may be. So when you meet someone who lives in Terlingua or Study Butte or Lajitas—that area known in local shorthand as South County—you might not be able to tell if he’s thirty or sixty. And at that point, reconciling the desert’s harshness and beauty is your problem.

It became Steve Smith’s problem when he bought the town of Lajitas at a public auction in February 2000. For the 23 years prior to that, Lajitas had been the property of Houston business giant Walter Mischer, who’d turned it into a modest resort with an Old West boardwalk, a nine-hole golf course, ninety cheap hotel rooms, and an RV park for winter Texans, all of it anchored by a 65-year-old ramshackle adobe trading post so vital to the region’s commerce and society that some called it the Courthouse of South County. Mischer never made much money off the place and held onto it mostly out of love. When he decided to sell, Smith, a 54-year-old Austin-based telecommunications tycoon, showed up unannounced and unknown, stepping out of his helicopter just before the auction began to buy Lajitas on a whim for $4.25 million. “My first thought was, I’d spend a million to spruce it up a little bit,” he told the San Antonio Express-News shortly thereafter. But he insisted that his intention was little substantive change.

When I met him nearly two years later, he was thinking differently. I was writing a story that would run in the May 2002 issue of Texas Monthly on Smith’s vision for Lajitas: the creation of a world-class, five-star golf resort and an exclusive development for multimillion-dollar vacation homes. By then, consultants and friends had convinced Smith that the dream could be real, and toward that end he had already spent $40 million, which he estimated would be half of his ultimate outlay. His ambition grew ever more glorious by the day: eight hundred residential lots of two acres or less, some selling for as much as $1 million, undeveloped; two championship golf courses, not desert-style, with grass growing only on greens and tees, but with a lush wall-to-wall carpet that would need a million gallons of water a day to stay green in summer months; an RV park with $100,000 slips for $500,000 motor homes; a 36,000-square-foot spa; four fancy restaurants; an amphitheater seating three thousand; an equestrian center; a hunting club.

Twelve miles east, on the Terlingua Ghost Town porch—the stretch of cement in front of the come-and-go storefronts where locals gather each evening to watch the Chisos Mountains change colors in the sunset—Smith’s Ultimate Hideout, as his marketers called Lajitas, was already being derided as the “Ultimate High Doubt.” But unlike their city friends who made annual pilgrimages to Big Bend and worried that the new Lajitas would ruin the area, the beer drinkers on the porch watched Smith spend and felt a surprising amount of concern for him. Had he really sprayed a compound on the ground in front of the Lajitas boardwalk that would keep dust from kicking up? Was he actually planning on repopulating Big Bend with the superrich dust-averse? When Lajitas’s marketing team suggested that all the resort needed to take off was a visitor with A-list celebrity credentials, one Tom Cruise or Tiger Woods, Terlingua just laughed. There was a reason Big Bend hadn’t already been overrun by the wealthy: the Chihuahuan Desert.

While few doubted that Smith genuinely loved the area, they saw no signs that he knew how hard it was to live there. His whole model was based on the idea that he could somehow tame the desert, refashion it to suit his plan, and it was just a matter of time before his vision became known as Smith’s Folly. Sure enough, the hotel struggled to maintain even 50 percent occupancy, and a mere five private homes went up in his subdivisions. Then, this summer the Lajitas resort declared bankruptcy, announcing some $15 million in debts and $500,000 a month in operating losses, and went on the auction block. Though it was appraised on the Brewster County tax rolls at $16 million, Smith’s own investment in the place has reportedly been more than $100 million. “I’ve heard he spent between $80 million and $100 million, but I don’t know,” said one of the creditors’ attorneys, who asked not to be identified while the bankruptcy was pending. “And frankly, I don’t think Smith even knows. I think he was just writing checks.”

If you talk to the people who live in South County, you’ll quickly sense the difference between them and the kinds of people Smith meant to attract, and it is not one of money but philosophy. For those traditionally drawn to the place, whether they were rich or poor, comfort wasn’t the major consideration. Marlin’s David Tinsley has been a Lajitas weekender since falling in love with the region on his first river trip through Santa Elena Canyon, in 1974. In 1986 he sold his Huntsville-based restaurant chain, Tinsley’s Chicken and Rolls, and made millions, and he used part of that haul to put a house on the river just upstream from Lajitas. But instead of a big Spanish villa, he built a modest, 1,800-square-foot cottage with an outdoor fireplace. On the one hand, he’s wealthy and owns his own plane. But he also waves his cowboy hat over his head and yells “yeehaw” like Slim Pickens in Dr. Strangelove whenever he flies it into the Trans-Pecos. And when he describes how he discovered a hole in a Lajitas urinal once upon a time—“I’d had a few beers and went to take a leak, and my foot kept getting warmer, and I remembered I had my Birkenstocks on, and . . .”—he sounds as if he’s remembering the greatest day of his life. He loves it out west.

“If you’re on a mountain out there and a cold front comes in, you could freeze and die,” he said. “If you fall off a cliff, you will die. If you get bitten by a rattlesnake, you’ll die. You cannot mess with that country. It’s dangerous. And hell, that’s the appeal!”

Linda Walker, who has run the Lajitas Stables for more than twenty years, guiding horseback tours near the park and into Mexico, is not rich. She’s quieter than Tinsley but on the same page. “It’s a small section of the population that gets it out here,” she said. “Smith believed that if he made it softer and more like other places, he could broaden the appeal. But it’s a thin margin to begin with, and it just didn’t play out for him.”

The idea that the desert could somehow be softened gets at a practical divide that would prove even wider. “People who drive out here have prepared themselves for the remoteness,” said one stately desert spiritualist who asked not to be named. “Seven or eight hours in a car gives you a sense of how far this is from civilization. If you take a plane, you just show up. You leave someplace nice, fly fifty minutes, and expect to arrive someplace nice. You’re not prepared for what you get.”

It can be quite a jolt. In June 2003, Texas Golfer sent a writer to stay at Lajitas for what would be a cover story for the monthly magazine. On his first day there he got an audience with Smith and a tour of the resort, the scale of which left him impressed. The second day was to be spent on the Ambush, the only course Smith ended up building. Though a “biblical rainstorm and lightning display” in the night knocked out the resort’s electricity for twelve hours—a common desert occurrence that, among other things, might incapacitate an alarm clock and cause one to miss an early tee time—he was still able to get on the course because no one else was playing that day. But he couldn’t play a full eighteen holes because much of the back nine was underneath the overflowing river. If you’re traveling on the cheap, that could make a funny story. But if you just paid $7,000 to fly your jet out there, $900 a night for a condo on the boardwalk, and $165 for greens fees, you expect a little more.

And there was one other significant problem. Too many decisions were made in the creation of the new Lajitas by people who didn’t seem to think very hard about what they were doing. In nearly every article on Lajitas that ran in the early Smith years, he gave some variant of a quote he gave to me. When I asked him what would happen if his dream didn’t work, he said, “Well, at least me and my friends will have a really nice golf course to play.” (Smith declined to be interviewed for this article, and Texas Monthly happens to be one of his unsecured creditors, owed $35,000 for unpaid advertising.)

That’s the way the project was run, as if success was secondary. Smith’s money was the safety net, the answer to every problem, be it the overall concept or everyday moves that didn’t work out. The decision-making rule of thumb so popular in modern business—that managers should ask for forgiveness, not permission—was taken to its untenable extreme. Projects were undertaken with designs drawn over lunch on place mats. Hundreds of trees, including pears and plums that had no business being in the desert, were ordered before there was a plan to plant them and then planted before there was a way to water them. They died. Grass that was seeded on the golf course couldn’t survive on the brackish well water. It had to be replaced. Rooms were scattered all over the grounds, along the boardwalk, on the golf course, and across Ranch Road 170, driving up operating costs. A skeet range was put in that had shooters firing over the bike trail. Six beautiful tennis courts were built, then ripped up.

To be fair, Smith did do some good. He gave generously to local fire and EMS departments. He housed and subsidized an infirmary that provided affordable, reliable health care. The resort’s 250 workers made Lajitas the largest employer in South County, and it paid nearly 30 percent of the taxes for the schools in Terlingua. His state-of-the-art gray water filtration system created a wetlands area on the golf course that, along with a 64-acre sanctuary on the river, brought birds to the region not commonly found in the desert. And he managed to build and landscape some beautiful facilities. On the wooden boardwalk, guests checked in in the grand lobby of the elegant Badlands Hotel, which is decorated like a high-dollar Old West guest house. Just beyond the far end of the boardwalk, a long, columned breezeway divided the dark, leather-bound Thirsty Goat Saloon and the glass-walled Candelilla Café overlooking the golf course. And on the other side of the highway and a tall adobe wall, the Cavalry Post and La Questa rooms opened up onto a swimming pool lined with ristra-strung arbors and a view of Lajitas Mesa.

Despite all this, Smith never did manage to get people to come in meaningful numbers, and when I stayed there in October, I understood why. Admittedly the place was in bankruptcy, but it was still open and promising no drop in service. I paid $320 for a mid-priced suite in the Officers’ Quarters. It was neat and comfortable, but somewhere in the two rooms there should have been a desk, and the television should have provided a clear picture and more than nineteen channels. (I’d have liked to watch the baseball playoffs, but I blame TBS for that.) And when I tried to pull open my window, the knob should not have come off in my hand. The three-hundred-yard walk to dinner that night was unlit and took me through a construction pit, and the meal for me and my friend at “the gourmet Ocotillo” was decent but bland—the venison chop, snapper filet, and rattlesnake cake all tasted like their sauce. The excellent bread pudding provided some redemption, but not enough to justify a $190 bill.

But the true injustice came with my breakfast: $33 for coffee, a small bowl of granola, some strawberries, concentrated orange juice, and a cute little box of Special K, like the kind my mom used to provide before she trusted me to pour from the big-boy box. Now, we all know people who wouldn’t blink at a $33 breakfast. But we also know that they expect more than Kellogg’s and Minute Maid. The place seemed to be about three stars shy of the target, fine for the desert but not for the price.

There’s a simple story of manners that gets retold on the porch when Lajitas is discussed. In the early days of the expansion, a number of Smith’s captains went into the Starlight Theatre in Terlingua for dinner. The party was large, maybe ten men and women, all drinking. Nothing unusual about that or about the fact that a couple of the men were somewhat flirty with the waitress, an attractive young woman who’d been living in the area for about a year. But about halfway through the meal, one of the guys, no doubt feeling that freewheeling mixture of margaritas and desert remove, commented to the waitress, “We’ve got a pool going to see if your tits are real or fake.”

There was laughter from the table but not from the waitress. She said, “You guys are execs at Lajitas, aren’t you?” When they acknowledged they were, she said, “I can’t wait to tell everybody what redneck assholes you are.” The table went silent, and when she walked off, one of the guys followed her to the bar and asked her not to say anything. Her answer: “No dice.” At the end of the meal, he tipped her $50. She stared at him. He gave her $100 more, then walked out of the place as if everything was fine. But it wasn’t. The woman, and, for that matter, all of Terlingua, was offended. And the recollection of that night is one of the reasons there will be no pour-out on the porch for the death of Smith’s vision.

When I visited the Starlight in October, that waitress was still there. She and her husband have since purchased the place. When I asked a local sitting at the bar what he remembered of that story, she happened to be on the other side of me and interrupted, “That was me!” She’s still angry about it, and she ticked off the details as though it had happened the night before.

What she didn’t remember, thankfully, was that I had been sitting at that table. I had been down in South County reporting for that story on the new Lajitas (and in my defense, I’d not participated in the pool). She also had no way of knowing about the rest of the night’s events.

The outing had been arranged in part to show me the way the new folks in Lajitas were being accepted in the community. After dinner some of our group went back to the resort, but my tour guide on the trip, the Lajitas general manager who’d been assigned to babysit me, wanted a nightcap. Wisely, he decided to move the party up the highway to what was then the only other bar near Terlingua, La Kiva. The name comes from the bar’s design, a dug-out cave/mineshaft, and it has always had a more permissive atmosphere than the rest of the area. It is the kind of place where, after a few drinks, you’re apt to forget that there are any rules at all. According to my minder, it was a place where we could get away from the snobs at the Starlight.

It was live-music night at La Kiva, the best of it played by a young female fiddle player from the Northeast who’d put off grad school to take a job at Lajitas. There was, in fact, a large contingent of resort employees in La Kiva that night, all of them transplants from around the United States but for one young woman who had grown up in the area. She was all smiles when I met her, one more witness to the greatness of Lajitas. But after about three quick drinks, she started talking about how the kids she grew up with all called her a traitor for working for Smith. Eventually she started sobbing, and I was whisked off by the minder into a crowd of happier revelers.

He sat me down at a table with a guy in his late-thirties named Dennis, who was a carpenter on the crew redoing the lobby of the Badlands Hotel. And the beauty of that, as it related to Steve Smith, was the free rein Dennis had been given to create whatever he wanted. There was no plan at all, no directions from above. Any idea Dennis came up with was worth a try. If it didn’t work out, Smith would just hire somebody else to start over.

Dennis smiled and said something that hinted roughly at the wonders of clean canvases, bottomless toolboxes, and endless lumber supplies, and then excused himself to go to the restroom. As he walked off I noticed that he was stooped and relying on a cane. Young as he was, that was surprising, so when he returned, I asked him how somebody with such a hard time getting around wound up in a job as physically demanding as carpentry. He said his condition was a recent development. A few months earlier he had been a passenger in a small plane that had taken off from Lajitas and had run out of gas over Ozona. Neither the plane nor its pilot was affiliated with the resort, and Lajitas was in no way responsible for the crash. Still, Dennis struck me as an odd person to be championing the resort’s willingness to act without a game plan.

Of all the wrongheaded moves made at the new Lajitas, it was the sanitization of the trading post that broke the most hearts. Bill Ivey owns the Ghost Town at Terlingua now, but he ran the trading post through the eighties. When I met him for a quick lunch in Alpine in October, his memories of the old store grew the conversation to two hours. “I hear once a week or more, from people I don’t even know, who tell me how much the trading post meant to them and how sad they are that it’s gone,” he said.

Ivey can speak to that loss with singular authority. His dad, Rex, a Brewster County commissioner, owned Lajitas for nearly thirty years before selling it to Mischer in 1977. In Rex’s time Lajitas consisted of the trading post and an old cavalry post that was used as a hunting lodge, and Rex met Mischer when he came out for deer and dove hunts. But it also served as a gathering place for the area’s whites, Mexicans, and Indians, none of whom batted an eye at the town’s other prominent, permanent resident, an old man who refused to wear anything more than his underwear, in which he would daily pan for gold in the Rio Grande.

Bill grew up in that Lajitas, in the late fifties and sixties, attending school in Alpine but spending his weekends, holidays, and summers down by the river. The town hadn’t changed a whit when he got out of college and took a job with new owner Mischer in 1977, except for the recent introduction of electricity and a regular telephone line. It looked much the same when Ivey took over the trading post in 1980.

The border then seemed about forty miles wide and mixed like the sounds in a Doug Sahm song, half-Mexican, half-white, with nobody too worried about which half was which. The trading post was that community’s heart, the hub for little villages on both sides of the river. Built in 1912, it was just a beaten-up, dirt-floor adobe, with a front porch constructed of railroad ties and rails drug from Terlingua’s languishing quicksilver mines, and shade provided from a willow-leaf awning held in place by goat-pen wire. The store itself was stacked deep with every conceivable necessity, from bulk beans and flour to appliances, auto parts, clothes, and ranch supplies. Ivey would even get customers’ prescriptions filled on his weekly runs to Alpine.

“I was doctor, vet, lawyer, marriage counselor, pharmacist, and an importer of wax. I even ran the rafting business out my back door,” Ivey said. “I only had two rules: no fighting and no spitting, at least not in the store. And everyone carried guns back then, but they knew to check them with me at the door or I’d lose my beer license.” Ivey shakes his head as he realizes that this wasn’t that long ago. “I’d hold out a brown paper sack that they’d put their guns in, and I’d put their groceries in that sack and hand it back to them when they were leaving.” The trading post was also the only chance for gas in the area, and it wasn’t unusual to see a pilot like Tinsley taxi his plane down the highway to the pumps to refuel. Checks were cashed and loans were made, and Ivey accepted payment in dollars, pesos, or by barter. You could get a six-pack of beer or a spark plug for a live chicken.

And he did sell plenty of beer, the most of any business in Brewster County, he estimates. Every day at five o’clock sharp, when the whistle blew at Lajitas, the porch at the trading post became the spot for Big Bend happy hour. Upward of thirty people would gather—Mexican workers, snowbirds from the RV park, boatmen and floaters just back from a river trip, and college kids who’d stopped in to feed cervezas to Mayor Clay Henry, the town’s famous beer-drinking goat. Folks lolled in the shade, shot pool on a felt-free pool table on the porch, rolled dice in the corner, and fed quarters into a jukebox that Ivey stocked with Vicente Fernández 45’s that he bought on regular trips to Juárez. He also hosted monthly dances and impromptu barbecues, when conjunto bands, crossing back into Mexico after performing stateside quinceañeras, would stop in and play for free beer. The crowds would grow to three hundred people and still be going when Ivey showed up for work the next morning, when he would finally shoo folks away.

According to Ivey, Mischer encouraged all this. It was part of the borderland experience, and everyone got along fine. Before they were priced out of the RV park, snowbirds were staying for three- and four-month stretches to play $10-a-day golf, and they got to know all the resort’s workers. And Mischer wanted the place to be fun. He even had employees “ambush” chartered busloads of seniors headed to his hotel, stopping their caravans on the highway and stealing their valuables. The contraband would be returned at a reception when they arrived.

So life went in Lajitas, through the end of Ivey’s tenure in 1993, right up until Mischer sold out to Smith. But there was no place for a Mexican jukebox in the new Lajitas. In the summer of 2003, Smith opened a remodeled trading post complete with air-conditioning, indoor baños, and a wine-and-coffee bar. The gas pumps were gone, as were the willow leaves and goat-pen wire. And the people. When I visited it in August and October, the trading post was dead.

“Every facet of life in that trading post was filled with spirit,” Ivey said. “When I go down there now, all I see are a few workers, but they’re not allowed to talk to anybody. It’s sad.

“The Big Bend is not the kind of place you want to drive through and look out your window at,” Ivey continued. “It’s not the Grand Canyon, where you park your car, walk to the edge, take a picture, and then say, ‘Okay, let’s go to California now.’ Big Bend tourists want an active part in what’s going on. They want to hike, raft, and go get a beer on the porch in Terlingua. When I bought the Ghost Town, I wanted to make it a place you needed to go to if you were in Big Bend. But it’s not the reason anyone’s coming out here, and that’s why I’m proud of it. I did nothing more than let it happen, and a real community is there now.

“The people in Lajitas now know nothing about the place or its past at all. That’s a huge mistake. They should be selling its history and its culture. Otherwise you’re just buying dirt.”

At some point in 2006 Smith decided to stop pouring his own fortune into Lajitas. Locals speculated that he was struggling financially, and the monthly Big Bend Gazette reported that Lajitas was not the only Smith-related enterprise to recently declare bankruptcy. He was also involved in a dispute with the IRS over $140 million in tax shelters. Others wondered if Smith’s bean counters had prevailed upon him to fund his dream with other people’s money. In any event, last summer Lajitas borrowed $12.5 million from a financial house in Connecticut. Then, this summer, after resort revenues failed to live up to the terms of the loan, the lender posted the property for foreclosure, and Lajitas filed for Chapter 11 protection. A bankruptcy judge in San Antonio opened a three-month window for Lajitas to acquire new financing, but Smith, who by all accounts was still in love with the area, was unable to pull it off. In mid-October, Lajitas was back up for sale.

The latest auction of Lajitas was marked by considerably less drama than the last one. No stranger rode into town with his checkbook in his teeth to run up the bidding and take the place over. Instead, a San Antonio law firm opened one of its large conference rooms to groups representing six would-be buyers, the interested and the curious. The auction itself was off-limits to the press, as lawyers for Lajitas worried that the presence of reporters would chill the bidding. But there was insight to be gleaned in the law firm’s lobby. John Poindexter, the owner of Big Bend’s Cibolo Creek Ranch resort, was among the last to arrive and the last to leave. Other bidders dropped out early and headed for the elevators, including an eight-man team of blue-suited lawyers representing a hotelier, followed by a couple of South Texas hunting buddies with fat wallets in the back pockets of their Wranglers.

The high bid at day’s end was $13.5 million, but the bidder, who wished to remain anonymous, hadn’t offered enough money to pay all the creditors, and no deal was reached. At press time two weeks later, the various parties were still trying to hammer out an agreement, and the door was open for someone else to swoop in and snatch it up. Rumors from the summer started to resurface. A major hotel chain. Smith and a group of hastily scraped-together investors. Some other rich guy desiring a private playground. Asian money.

Down in South County, where the economy desperately needs Lajitas to remain open, locals hoped that whoever bought the resort would scale back the dream, place it somewhere between the best plans of Mischer’s and Smith’s. The vision on the porch was of rooms priced at $150 a night and an RV park that is open to snowbirds, that will tolerate the occasional rattletrap trailer. With the border now closed, the trading post will never return to its Ivey-era glory. That party is over. But the place could be friendlier to residents on this side of the river.

Still, in a larger sense the buyer and his intentions don’t really matter. The ultimate fate of Lajitas won’t be decided by any new owner. That determination will be made by the desert.

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