Carl Berry's Philosophy: Work the Stream
By Rosalie E. Leposky
In trout fishing and timesharing alike, "Work the stream, don't sit on the shore," is a philosophy that for many years has guided and served Carl G. Berry, RRP. Working the stream has enabled him to catch many fish and to create and popularize significant aspects of the timeshare-resort industry, including urban timesharing, which recently began a period of vigorous growth.
|Milestones in Carl G. Berry's Career|
Urban timeshare projects in sales today are benefiting from over ten years of untapped consumer interest, says Richard L. Ragatz, Ph.D., RRP, executive vice president of RCI Consulting, Inc., in Eugene, Oregon.
"Exclusive of Las Vegas, before the current interest in urban timesharing less than 1,000 urban timeshare units had been developed worldwide in about 30 projects. Today, about 1,000 new urban timeshare units either became available recently or will be available soon." Carl Berry can take much of the credit for the existence of those statistics.
Berry clearly pioneered the urban component of the timeshare industry in North America, in which the city's attractions and amenities are the draw, but his role in the industry's history neither starts nor ends there. Although no one can be sure exactly which timeshare developer was first to introduce the timeshare-resort industry to North.
America in the late 1960s and early 1970s, Berry undoubtedly was one of the first.
"A man with tremendous vision, Carl Berry always been a forward thinker and a true timesharing pioneer," says Mario F. Rodriguez, founder of Interval International and current chairman of Resort Advisors International.
Berry, president of California Resorts in San Francisco, is tall, lean, handsome, and distinguished-looking. Long-time business associates remember when he wore glasses and resembled George Reeves, the television actor who portrayed Superman/Clark Kent in the 1950s.
Along with Paul Gray, now president of BayCity Suites in San Francisco (a provider of extended-stay units to the human-resources departments of large companies), Berry invented the urban timeshare concept.
Gray recalls that in 1967 or 1968, he was introduced to Berry by Jim Davis, a Phi Delta Theta college fraternity brother who was a venture capitalist. "I had finished my military service in Korea, and was in California looking for business opportunities," Gray says. "Carl rented Jim a vacation apartment at an early stage of what grew to be Creative Leisure International."
Providing Rental Programs
Berry and Gray established Creative Leisure International in the late 1960s to provide rental programs for Caribbean, Hawaiian, and Mexican condominiums. Berry and Gray's partnership survived until 1992 when Gray, the father of two teenaged children, wanted to travel less and founded BayCity Suites. Davis also joined Creative Leisure, as did two other creative men who in 1969 helped Berry and Gray decide what to do next:
In 1972, Berry and Gray sold Creative Leisure to Peter F. Henze, who had been its Midwest regional manager. "After 30 years," he says," Creative Leisure is United Airlines' longest continual Hawaiian tour operator. It continues to provide rental services to high-end second-home condominiums and villas and offers tours to Hawaii, Mexico, the Virgin Islands, and the United Kingdom."
A Timeshare Opportunity
Berry and Gray had planned to offer timesharing in the Caribbean, Hawaii, and Mexico, but before they could put those plans into action, they were offered an opportunity to develop a timeshare project on Lake Tahoe.
"In the summer of 1972," Berry recalls, "we joined David Irmer, chief executive officer of Innisfree Corporation (a subsidiary of Hyatt Corporation) to develop Brockway Springs in Kings Beach, California. Hyatt wanted to develop condominiums, and we understood condominiums."
In the 1960s, Don Pritzker (son of A.N. Pritzker) purchased two hotel chains -- an airport hotel company with hotels in Los Angeles, San Francisco, and Seattle from a Dutchman by the name of Hyatt; and a chain of EconoLodges in California's San Joaquin valley. In 1969 or 1970, the Pritzker hotels went public. Don died and A.N. Pritzker's son-in law, Skip Friend, operated the Hyatt hotels. Friend was in charge while Innisfree was a subsidiary, and he had the foresight to make Brockway Springs happen.
"Our silent agenda was to have Hyatt introduce a timeshare product. By mid-1972 we were selling regular condominiums in California at Brockway Springs in Kings Beach, California. We were going through the research and development and taking steps to obtain approval from Placer County and the State of California to sell timesharing, arrange buyer financing, and secure 52 title-insurance policies for one timeshare unit. These were momentous steps. We were dealing with theory. State and local authorities had to review our offering and make sure that it made sense.
"We had to arrange financing and appraisals for whole condominiums that sold for $100,000 and now would be worth $300,000 as timeshare units. The timeshare concept was new to California appraisers."
"We needed the resources of Hyatt Corporation, and it helped to have their name on our masthead. The support of Hyatt's lawyers was crucial to our ability to market the Brockway Springs timeshare product.
"In the fall of 1972 when we were putting things together, we talked to Los Angeles advertising agencies and bankers using the name multiple ownership, for want of a better name. One afternoon Charlie Bird, a bright and creative ad-agency owner, suggested a jazzier name adapted from the then-new concept of mainframe computer timesharing. The concept was the same -- shared computer time or shared condominium time."
In the winter of 1973, Innisfree started timeshare sales. "We sold 14-day interests," Berry says, "because we were afraid to break down the product into a one-week interest. People might perceive one week was not long enough. We sold fixed-week waterfront condominiums for $3,200 to $9,500."
Five of Brockway Springs -- 75 waterfront condominiums were sold as 25 two-week interests, and 70 were sold as whole-owner condominiums. Brockway Innisfree sold four product lines -- acreage, condominiums, homesites, and timeshare. Owner financing and title insurance were offered -- a combination of first, second, and third mortgages from AVCO Financing. Thus, Hyatt became the first name-brand hotel company to offer a timeshare product.
Financial and legal experts prefer deeded timeshare sales. Owners are better protected. Some lenders still do not loan money to right-to-use projects where there is no direct security. Both Disney Vacation Club and Hilton Grand Vacations Clubs use a point program of the type pioneered by Vacation Internationale in Seattle, Washington. Disney and Hilton are large enough companies to offer unsecured consumer financing, as compared to real-estate-based financing.
"Many people felt that if you could not convey a title, you were not selling a real product," Berry says. "As evidence of that important fact, most United States timeshare products still pass a title that can be recorded. Brockway Springs pioneered creating a deed recognized by the real-estate industry that could be recorded, and the acquisition of timeshare title insurance. One of our first owners, the family of an Arthur Andersen accountant, still own and use their unit."
With Hyatt, Innisfree Corporation developed a second timeshare property, the 54-unit Vail Run Resort in Vail, Colorado, which sold out in mid-1976. Located in a seven-story building with 20,000 feet of retail space, Vail Run was a joint venture with Colorado Savings and Loan Association.
With the success of Brockway Springs, Berry and Gray began in 1972 to provide timeshare consulting services to other projects in their spare time.
The 1974-1975 gas crunch affected the income of Hyatt's hotels. Company earnings and stock values slipped. In 1975 a security analyst suggested that Hyatt was displaying a mixed image and should keep the airport hotels and jettison the other subsidiaries. The Pritzkers sold off their air conditioning company, budget hotels, furniture company, and land development - including resort development.
In January of 1976, Carl Berry, Paul Gray, and David Irmer purchased Hyatt's interest in Innisfree Corporation. "Hyatt was the first hotel firm to offer timesharing, and it would be 20 years before Hyatt re-entered the timeshare industry," says Berry.
Holiday Inns Joint Venture
Truly entrepreneurial, Innisfree developed a 50/50 joint venture with Holiday Inns International in Memphis, Tennessee, to create Holiday Club International and sell a right-to use product with a 12-year term. Marketing of Holiday Club began in 1976. "With 34 cooperating Holiday Inns from Bermuda to Hawaii, Holiday Club was self-contained," says Berry. "No external exchange system was required. Owners received a special set of amenities and services. From 1976 to 1979, these club memberships were sold from Las Vegas.
"In 1979, Holiday Inns said they liked the club business and wanted to move the operation to Memphis. We were asked to move, and refused."
Holiday Inns purchased Innisfree's interest and operated Holiday Club International until 1989.
Berry and Gray acquired a Holiday Club franchise at the Holiday Inn Fisherman's Wharf in San Francisco. "We sold Holiday Club memberships from 1979 to 1981," says Berry. "After Paul and I left Innisfree in 1979, David Irmer continued to operate the company. In 1979, Paul and I founded California Resorts."
Urban Timeshare Pioneer
The seven-unit Jackson Court in Pacific Heights was California Resorts' first urban timeshare project, and probably the first such project in North America. It still exists. "In 1981, Jackson Court was a prototype for urban timesharing," says Berry. "Located in a very residential neighborhood, by today's standards, Jackson Court has a bed-and-breakfast inn format.
"We experimented with urban timeshare marketing on someone one else's nickel. No one had done an urban project before. A decade after inventing the product, we were back at pioneering new aspects and applications of timesharing."
Sales began in 1982 for California Resorts' second San Francisco urban timeshare project, the 16-unit San Francisco Suites on Nob Hill.
"With its interesting architecture and design, San Francisco Suites survived difficult economic times," Berry says. "It was a slow sell-out. We started when interest rates were 19 or 20 percent, ran out of money, and had to refinance twice with Home Federal Savings and Loan in San Diego. Home Federal was a good lender. At one time they had several California timeshare projects. Like so many saving and loans, they merged with other banks in the late 1980s.
"San Francisco Suites finally sold out in 1986. Today it is the best known of the smaller urban timeshare developments. I still personally own and use weeks there. We learned a lot from developing, marketing, and selling San Francisco Suites."
In 1986, John V. Santopadre asked California Resorts to be a partner in developing the 256-unit Avenue Plaza Hotel and Spa on St. Charles Avenue in New Orleans. "In 1988, when Santopadre's savings and loan crashed, we agreed that we would back out of our deal," Berry says.
"We did not want to become involved with Louisiana banking politics. We gained a lot of good experience. After a five-year hiatus, John subsequently purchased his project from the Resolution Trust Corporation and developed it with the Kosmas brothers."
About 1988, Gray and Berry's interests began to diverge. Gray became more interested in corporate extended stay, and Berry wanted to do fifth-shares in a development of single-family homes in Sun River, Oregon. "Sun River is a four-season mixed-use resort community with over 7,000 homesites and 2,000 condominiums near Mount Bachelor in central Oregon," he says. "I purchased home inventories when prices were low, and stopped when prices rose."
Berry spent two summers in Oregon, creating and operating a separate company there, Shared Vacation Homes. Returning to San Francisco in 1990, he assumed the marketing contract for the 32-unit Powell Place, next door to San Francisco Suites on Nob Hill. "Powell Place was developed in the 1980s. It was half sold in 1986 when the developer lost the rest of his inventory to his bank for reasons totally unrelated to Powell Place. The bank called me in 1990 when the inventory was available for sale. Some Club Donatello and San Francisco Suites owners own Powell Place weeks.
"We sold Powell Place in 1991 and 1992, using direct mail and mini-vacation offers to market both San Francisco Suites and Powell Place. We did not advertise in gay publications. We found that our best marketing vehicle was through direct mail to people in our suburbs who wanted a pied-à-terre (city apartment).
"In the early 1980s we worked on a project in the Russian River area that we would have marketed exclusively to gay populations. The project would have come to market except that a flood of the century damaged the resort we were converting. The resort owner became caught in flood-related insurance problems, and shortly thereafter the international AIDS epidemic occurred."
Timesharing New York
Most recently, Berry has a new title as senior vice president of Eichner Enterprises, helping long-time New York developer Ian Bruce Eichner to create New York City's first timeshare property, The Manhattan Club.
"RCI's east coast representative, Darla Zanin, introduced Bruce and me at ARDA's 1992 spring meeting in Las Vegas," says Berry. "Bruce had contacted Darla and asked how to learn about timesharing, and she encouraged him to attend the next ARDA meeting."
The Manhattan Club is a mixed-use timeshare project in the former Park Central Sheraton Hotel at 200 West 56th Street, a 25 story H-shaped building with 1,440 rooms. The first timeshare phase will include 253 timeshare units, retail and office space, and a yet-to-be-determined number of traditional hotel rooms. "The Manhattan Club building has been completely gutted, and is purpose-built inside the building's external skin," says Berry. "We hope to receive the first owners there in August of 1997. Owners from San Francisco Suites and Powell Place already have purchased at Manhattan Club."
"As part of the total building renovation, we've been able to restore the 1920s neoclassical limestone exterior of our building," says Scott Lager, chief operating officer of the club's corporate entity, Continuum Company. In South Florida, Continuum recently acquired 13 acres of Atlantic Ocean beach frontage from Thomas Kramer, a controversial German developer. The site, next to South Pointe Park on Miami Beach, may be developed as a high-rise hotel and timeshare project.
Now that urban timesharing has become increasingly popular, Berry is looking ahead to the next innovation in the industry -- high-end urban product in increments of more than a week. "I expect to develop twelfths (30 days), fifteenths (24 days), and twentieths (18 days) for older, affluent empty-nesters with disposable income," he says.
Contributions to ARDA
Berry's positions and contributions to the American Resort Development Association have been significant. An early and active member of the original American Land Development Association, Berry was instrumental in the mid-1970s in focusing ALDA's attention on timesharing.
Some ALDA members already were interested in timesharing, including Jon DeHaan of Resort Condominiums International; developers George F. Donovan and C. Randolph Warner of Fairfield Communities, Inc; Salt Lake City attorney Keith Romney; and Robert M. Taylor of Mariner Property Management, Inc.
Other members of ALDA were slower to realize the importance of timesharing. In the fall of 1974, DeHaan attended the first ALDA timeshare meeting, organized and chaired by Berry at Chicago's O'Hare Hyatt Airport Hotel. "A man I had never seen before asked to speak,"
Berry recalls. "Jon DeHaan stood up, introduced himself, and announced the creation of his new exchange company, Resort Condominiums International. John was so far ahead of everyone else in anticipating the need for exchange."
At Lake Tahoe in 1973, a single-owner condominium cost about $120,000. The average price for two fixed weeks was about $5,000 -- $3,500 in spring and $7,500 in summer. "DeHaan was smart," Berry says.
"He knew that our owners did not want to be locked into only coming back to Lake Tahoe. With exchange, timeshare owners could go other places. ALDA's board members became interested and formed a committee to study timesharing.
"When I was ARDA's chairman in the mid-1980s, I saw our campground membership slip from 115 to five. With the exception of Jerol Andres, chief executive officer of Eagle Crest Partners, Ltd., and the Thousand Trails representatives, the campground developers never invested the time to make ALDA work for their interests. We never had a critical mass with the recreational-vehicle industry. Trade associations have to serve their industry. We asked ALDA to represent us, and we stayed until we had a large enough number so that we had to be recognized."
For Berry, staying meant being active and attempting to influence the direction taken by ALDA/ARDA. In 1989, he received the ARDA Man Of The Year Award when he retired as ARDA chairman after serving 14 years on the organization's board of directors. He also served as chairman of the National TimeShare Council from 1982 to 1985, chairman of ARDA's meetings committee from 1984 to 1986, chairman of ARDA's Alliance For Timeshare Excellence (a successful industry-wide public-relations program) from 1989 to 1995, and communications council chairman from 1995 to 1997. He was in the first group to receive ARDA's Registered Resort Professional designation.
From Trees to Land Development
Carl G. Berry is the grandson and namesake of Carl G. Brown (1876-1957), his maternal grandfather and founder of California Casualty Company. "The G in our names is for Grover Cleveland, a distant relative." Says Berry California Casualty, created following the passage of California's 1913 Workman's Compensation Act, remains a family-owned insurance company. Today it sells the modern version of workman's compensation -- worker's compensation -- and automobile and home insurance.
"My grandfather pioneered low-risk insurance to groups with good driving records," says Berry. "California Casualty sells automobile insurance to teachers in 22 states. My father, Kenneth G. Berry, joined my grandfather's firm in 1930. My uncle, Carl G. Brown Jr., is California Casualty's chairman emeritus and my cousin, Thomas R. Brown, is chairman. Today California Casualty has annual revenues of about $400 million.
"Grandfather Brown came from the small California town of Watsonville, just south of San Francisco. He met my grandmother, Susan Sawyer, in Salt Lake City on an insurance business trip. My parents, Dorothy Brown and Kenneth C. Berry, both now deceased, met while attending San Francisco's James Lowell High School class of 1924,"says Berry, who was born in San Francisco in 1938. Other members of my family who attended Lowell High School were my grandfather Brown (class of 1896); my older brother, Kenneth G. Berry (class of 1953), an investment councilor and owner of Pillar Point Capital Management Company, Inc.; and me (class of 1957)." Lowell is the oldest public high school west of St. Louis. Berry's older sister, Susan, now deceased, attended a different all-girls school.
Berry elected not to follow his parents and older brother to college at Stanford University in Palo Alto, California. " I wanted to be a forester and work outdoors, so I went instead to the University of Idaho in Moscow, Idaho," he explains. When he discovered that the curriculum in his first two years was the same as that of the engineering students, he switched to a liberal-arts major.
After graduating from the University of Idaho in 1962 with a Bachelor of Science degree in education and English, Berry student-taught and applied to three school districts. "I never taught, once I learned that beginning teachers in 1962 earned about $2,400 a year," he says. He discovered that he could make more as a traveling secretary for Sigma Nu, his college fraternity. After a year, during which he married, Berry left Sigma Nu to work for his family's insurance business during the week while developing homesites on weekends for his first enterprise, Palouse Property Company. Palouse is a Nez Percés Indian word for the Columbia Plateau, their historic tribal lands and North America's richest wheat-growing region. The area around Moscow, Idaho, is rich in Nez Percés heritage."
Palouse developed 23 homesites on Henry's Lake, Idaho, which is near West Yellowstone, Montana. Berry paid about $20,000 for the land and spent about $5,000 in land-development costs to survey it, install septic tanks, and make sure the ground would leach. Rural electric services provided free power installations. Berry sold Henry's Lake sites on weekends to Los Angeles firemen, and with the profits he developed another 121 homesites on 130 acres along Lake Shasta, a reservoir built in the 1930s near 14,162-foot Mount Shasta in Northern California.
"In the mid-1960s there were no out-of-state registration requirements to sell subdivisions," Berry recalls. "I sold Idaho homesites in Los Angeles."
In 1968, Berry left the family insurance business because he wanted to be a full-time resort developer, and launched Creative Leisure International.
Divorced in 1972, Berry remarried in 1982 to the former Linden F. Hanger, from the St. Louis suburb of Webster Groves, Missouri. Mrs. Berry, a Vassar College graduate and former high-school counselor for college-bound students, is now a University of San Francisco graduate student studying for a Master of Arts degree in family counseling. She will begin an internship in September at the Apple Family Center in San Rafael, California.
The Berrys have one son, Josh Farrar, 25, a graduate of Wesleyan University in Middletown, Connecticut. Farrar spent two and a half years as an administrative assistant to Harvard professor Robert Coles, a famous child psychologist who in 1981 received an award from the John D. and Catherine T. MacArthur Foundation. Recently he left Coles' staff to form a rock band, Spanish Johnny's Opera.
Berry's civic and philanthropic activities focus on the world of education. He is a member and past president of the University of Idaho Foundation and the University of Idaho Alumni Association, and he serves as president of the board of trustees of Lick-Wilmerding High School, a private school founded in 1896 and owned by a trust. Berry's son Josh, graduated from Lick-Wilmerding. As chairman of the school's building campaign, Berry recently helped raised $7 million toward a new library.
Recently he presented 390 diplomas to members of the graduating class. Berry maintains two identical offices, one in downtown San Francisco, the other in his Victorian-style Pacific Heights residence. "I work at home unless I have to meet with bankers and lawyers," he says. He also has a second home in Montana.
In his spare moments, Berry likes to hike, kayak, go mountain biking, and fish for trout. He considers Silver Creek, just south of Sun Valley, Idaho, to be one of North America's top five trout streams.
Rosalie E. Leposky is managing partner of Ampersand Communications, a news-features syndicate based in Miami, Florida.
For More Information
Carl G. Berry - Home
Resort Development & Advisors, Inc.
The Registry Collection Fine Leisure Assets
WFR Seminars - http://www.wfrseminars.com
© Copyright 1997 Ampersand Communications
All Rights Reserved
Published in The Resort Trades, August 1997.