The heirs to the family that has run the Jose Cuervo tequila empire for 250 years are mapping plans to transform their dusty Mexican hometown into a ritzy tourist spot, complete with five-star hotels and a cultural center.

In some ways, the marketing appeal of the spot is obvious. The town’s name is, after all, Tequila, and it is here that the liquor was first created in the 16th century out of the blue agave plants that dot Mexico’s western central highlands. But there’s just one hitch: A powerful drug cartel operates nearby. Massacres and executions, including the 2013 killing of the state’s top tourism official, aren’t uncommon. Company officials are undaunted; they say the drug lords tend to leave tourists alone and Mexico is a safe destination for travel.

“It is a very long term plan to make a museum, more restaurants, this place where people can build a weekend house - - like a Napa Valley,” said Juan Domingo Beckmann, 48, chief executive officer of Casa Cuervo SA, who agreed to a rare interview after his 75-year-old reclusive father, Juan Beckmann Vidal, declined to comment.

Frat Drink

Turning a dilapidated area of Mexico into northern California is part of the family’s strategy to extend the Jose Cuervo brand -- often seen as a favorite of frat houses everywhere -- into a more upscale category. Formidable challenges await, and not only from the drugs lords whose activities prompted the U.S. to warn its citizens last year about traveling around in parts of Jalisco, the state where Tequila is located.

Liquor giants including Diageo plc and celebrity-owners such as P Diddy and George Clooney are already jousting in the booming ultra-premium tequila segment, where bottles can sell for as much as $1,000.

“Ultimately the growth will be in higher-end tequilas,” said Ian Shackleton, an analyst at Nomura International Plc, “and everybody out there is trying to have some sort of premium tequila, so it’s a crowded space.”

Jose Cuervo, the world’s biggest tequila producer, has made the Beckmanns billionaires and among the richest tycoons in Latin America, no small thanks to Americans who have long sipped margaritas and downed shots. They control the business through Becle SA de CV, the holding company that owns Jose Cuervo, according to a report on Cuervo’s website.

Mezcal Wine

Beckmann Vidal, who owns 70 percent of the family business through Becle -- a merged company created in a recent corporate restructuring -- has a fortune valued at $2.4 billion, according to the Bloomberg Billionaires Index. Domingo Beckmann owns the rest and has a $1 billion fortune.