THE FOUR SEASONS PROFITS FROM FLEECING AT COSTA PALMAS

Irongate’s luxury resort development known as Costa Palmas in Las Cabos, Mexico grew in large part on its partnership with the Four Seasons. There is a five star Four Seasons branded hotel at the resort, along with a golf course, spa, yacht club, and world class beach front facilities. Costa Palmas also offers buyers the opportunity to purchase a Four Seasons branded home, ranging from condominium units to palatial estates, supposedly with all of the perks afforded to guests of the Four Seasons hotel. Jason Grosfeld, who has overseen the development of Costa Palmas, aggressively markets the Four Seasons “experience” to potential buyers, with great success. According to Irongate, it has sold homes totaling more than $1 billion in Costa Palmas, and the Four Seasons reaps huge benefits from its partnership with Grosfeld in Mexico.

According to some buyers in the neighborhood, owners must pay a hefty six figure marketing or branding fee to the Four Seasons when they buy a home or sign a contract for construction of a home in Costa Palmas. Owners also pay HOA and other fees that they understand are shared with the Four Seasons and/or substantial fees for the rights to use the Four Seasons’ facilities and amenities.

Despite the Four Seasons’ dominant presence in Costa Palmas, the revenues it receives from homeowners, and its controls over Four Seasons branded properties, the Four Seasons appears to turn a blind eye to the struggles owners in Costa Palmas claim to face at the hands of Irongate and Grosfeld. Many owners interviewed complain about unreasonable delays in completion of their homes, sometimes years after they were supposed to be finished. One owner complained: “I went down there [to Costa Palmas] before the Four Seasons existed. Now 5 years later my home isn't done and they promised that they couldn't open the Four Seasons without my home being done, and well here we are. Their hotel is open and my house isn't even close to being done.”

Many owners advise that when their homes were finally completed, they discovered that Irongate’s construction was substandard or shoddy, sometimes resulting in uninhabitable and unsafe homes, for which the owners believe they have little or no recourse. Some owners reported having to wear ski jackets during the winter because their “luxury” homes have poor insulation, inadequate weatherproofing, and defective or non-existent heating systems.

There can be no doubt that the Four Seasons is aware of these problems, as owners claim to have reached out to the Four Seasons for help in getting Irongate to complete their homes or to make needed repairs to make those homes livable. Owners build in Costa Palmas because they are assured that the Four Seasons will have their back, based in part on the Four Seasons’ financial interests in the development: “Four Seasons is supposed to defend the homeowners; though they get a 9% commission from each sale.” According to some owners, the Four Seasons does not have their backs. They say the Four Seasons “does nothing” to help resolve the rampant quality construction issues. That begs the question: Has Grosfeld purchased the Four Seasons’ complicity with a share of the profits some claim he fleeces from buyers?