10/23/2006

Plunging into Baja

Plunging into Baja

Leading the charge south of the border, Southland buyers are snatching up bargain-priced retirement or second homes on the beach.

By Ann Brenoff, Times Staff Writer
October 22, 2006

THE trick to buying a home in Mexico, say those who have done it, is to not leave your brain at the border. The days of writing up deals on bar napkins and sealing them with a handshake and a shot of tequila are over — or should be, experts say.That said, you can buy an oceanfront home in Baja for about one-third of what it would cost 30 minutes north of the border. And that alone was probably enough motivation for the 1.5 million Americans who own homes in Mexico today, according to estimates from the Mexico Assn. of Real Estate Professionals. The number is expected to jump to 12 million within 20 years as more baby boomers retire south of the border.

An AARP study last year ranked Mexico fourth among places in the world Americans are retiring to. As healthcare improves in our neighbor to the south, expect more Americans to get comfortable with the idea, said Mitch Creekmore, coauthor with Tom Kelly of "Cashing In on a Second Home in Mexico."

Fueling the trend is the fact that financing is becoming more available and the process of buying in Mexico more streamlined, transparent and professional.

"Just use common sense," said Mauricio Monroy, a tax expert with the firm of Deloitte in Tijuana, speaking at a September conference at UCLA on buying in Baja. "Apply the same cautions you would have about conducting business in the United States.

"The worst thing a purchaser can do, author Kelly said, is to remain ignorant of Mexican law.

Buying a home isn't a simple process, and the rules of the Mexican real estate game are radically different from those in the U.S. To start with, little is regulated, few involved in the process are licensed, and to some extent, a few margaritas may be necessary to achieve the proper level of blind faith.

So before you jump into the Gulf of California, here's the short course on buying in Mexico:

THE HISTORY. The Mexican Constitution says foreigners can't own property within 100 kilometers (62 miles) of the border and 50 kilometers (31 miles) of the coastline. Foreigners have always been able to directly own land in the interior, with a few limitations on specific agricultural tracts. But for second homes or retirement, Americans want the beach. Since the early '70s, non-Mexicans have been able to purchase coastal and border properties through a Mexican bank trust known as a fideicomiso.

HORROR STORIES. Back in the 1980s and 1990s, land and homes in Mexico were so cheap that even if all the Ts weren't crossed, Americans — giddy at the prospect of how far their dollars would go — bought them. Many were in held in ejidos, communal land agreements that date back to the time of Aztec rule in Mexico. Under the ejido system, the land is owned by the government and supported by a national bank.

Since the constitutional reforms of the early '90s, ejido land now can be converted into private property and sold to third parties, including foreigners.But the effect of events such as the eviction of U.S. citizens from the Punta Banda peninsula south of Ensenada in 2000 lingers. In that case, the mostly retired homeowners had built their houses on ejido land, and when Mexico's Supreme Court ruled that the ejido group was not the land's rightful owner, some of the Americans were forced to abandon homes worth hundreds of thousands of dollars.

THE FIDEICOMISO. The closest legal mechanism to a fideicomiso in the U.S. is a family trust. The bank — the "trustee" — holds the legal title to the property. The trust "beneficiary" (the foreign buyer) holds all rights and privileges of ownership. The beneficiary has the right to occupy or rent the property, and can transfer the title to any legally qualified person. Beneficiaries can modify the property in accordance with local zoning regulations and receive the full appreciation on the property when it is sold.

Trusts have an initial term of 50 years and are renewable at any time for a $1,000 fee for additional 50-year periods.

Banks charge a predetermined fee to establish a fideicomiso, plus a percentage of the property's value, to cover the costs of preliminary studies and the drafting of the trust agreement. The bank also charges an annual fee to maintain the trust, about $500 per year.

THE DEAL. Real estate transactions involve several players, including the buyer's lawyer, a notary public who functions as a neutral agent to both buyer and seller, a real estate agent or broker, and a bank.

10/17/2006

Gringos turn tide crossing border Boomer retirees invading Mexico

Gringos turn tide crossing border
Boomer retirees invading Mexico

Mike Davis
Sunday, October 15, 2006

The visitor crossing from Tijuana to San Diego these days is immediately slapped in the face by a huge billboard screaming, "Stop the Border Invasion!" Sponsored by an rabidly anti-immigrant vigilante group, the Minutemen, the same truculent slogan reportedly insults the public at other border crossings in Arizona and Texas.

The Minutemen, once caricatured in the press as gun-toting clowns, are now haughty celebrities of grassroots conservatism, dominating AM hate radio as well as the even more hysterical ether of the right-wing blogosphere. In the heartland as well as in border states, Republican candidates vie desperately for their endorsement. With the electorate alienated by the dual catastrophes of Baghdad and New Orleans, the Brown Peril has suddenly become the Republican deus ex machina for retaining control of Congress in next month's elections.

A faltering GOP hegemony, too long sustained by the scraps of 9/11 and the imaginary weaponry of Saddam Hussein, now has a new urgency in its appeal to the suburbs. Not since Kofi Annan conspired to send his black helicopters to terrorize Wyoming has such a clear-and-present danger threatened the republic as the sinister armies of would-be busboys and gardeners gathered at the Rio Grande.

To listen to some of these demagogues, one would assume that the twin towers had been blown up by followers of the Virgin of Guadalupe or that Spanish had recently been decreed the official language of Connecticut. Having failed to cleanse the world of evil by invasions of Afghanistan and Iraq, Republicans, supported by some Democrats, now propose that we invade ourselves: sending the Marines and Green Berets, along with the National Guard, into the hostile deserts of California and New Mexico where national sovereignty is supposedly under siege.

As in the past, nativism today is bigotry as surreal caricature, reality stood on its head. The ultimate irony, however, is that there really is something that might be called a "border invasion," but the Minutemen's billboards are on the wrong side of the freeway.

What few people -- at least, outside of Mexico -- have bothered to notice is that while all the nannies, cooks and maids have been heading north to tend the luxury lifestyles of irate Republicans, the gringo hordes have been rushing south to enjoy glorious budget retirements and affordable second homes under the Mexican sun.

Yes, in former California Gov. Pete Wilson's immortal words, "They just keep coming." Over the past decade, the State Department estimates that the number of Americans living in Mexico has soared from 200,000 to 1 million (or one-quarter of all U.S. expatriates). Remittances from the United States to Mexico have risen dramatically, from $9 billion to $14.5 billion in just two years. Although initially interpreted as representing a huge increase in illegal workers (who send parts of their salaries across the border to family), it turns out to be mainly money sent by Americans to themselves to finance Mexican homes and retirements.

Although some of them are naturalized U.S. citizens returning to towns and villages of their birth after lifetimes of toil on the other side, the director-general of Fonatur, the official agency for tourism development in Mexico, recently characterized the typical investors in that country's real estate as American "Baby Boomers who have paid off in good part their initial mortgage and are coming into inheritance money."

The extraordinary rise in U.S. sunbelt property values gives gringos immense economic leverage. Shrewd Baby Boomers are not simply feathering nests for eventual retirement, but also increasingly speculating in Mexican resort property, sending up property values to the detriment of locals whose children are consequently driven into slums or forced to emigrate north, increasing the "invasion" charges. As in Galway, Corsica, or, for that matter, Montaña, the global second-home boom is making life in beautiful, natural settings unaffordable for their traditional residents.

Some expatriates are experimenting with exotic places such as the Riviera Maya or Tulum in the state of Quintana Roo on the Gulf of Mexico, but more prefer such well-established havens as San Miguel de Allende in central Mexico and the coastal resort town of Puerto Vallarta. Here the norteamericanos make themselves at home in more ways than one.

An English-language newspaper in Puerto Vallarta, for instance, recently applauded the imminent arrival of a shopping mall that will include Hooters, Burger King, Subway, Chili's and Starbucks. Only Dunkin' Donuts (con salsa?), the paper complained, was still missing.

The gringo presence is largest (and brings the most significant geopolitical consequences) in Baja California. Indeed, Baja real estate Web sites ooze almost as much hyperbole as those devoted to stalking the phantom menace of illegal immigrants -- in a far more upbeat tone when it comes to the question of immigrant invasions.

In essence, Alta (Upper) California is beginning to overflow into Baja, an epochal process that, if unchecked, will produce intolerable social marginalization and ecological devastation in Mexico's last true frontier region. All the contradictions of post-industrial California -- runaway land inflation in the coastal zone, sprawling suburban development in interior valleys and deserts, freeway congestion and lack of mass transit, and the astronomical growth of motorized recreation -- dictate the invasion of the gorgeous peninsula to the south. To use a term from a bad but not irrelevant past, Baja is Anglo California's lebensraum.

Indeed, the first two stages of informal annexation have already occurred. Under the banner of NAFTA, Southern California has exported hundreds of its sweatshops and toxic industries to the maquiladora zones of Tijuana and Mexicali. The Pacific Maritime Association, representing the West Coast's major shipping companies, has joined forces with Korean and Japanese corporations to explore the construction of a vast new container port at Punta Colonel, 150 miles south of Tijuana, which would undercut the power of longshore unionism in San Pedro and San Francisco.

Secondly, tens of thousands of gringo retirees and winter residents are clustered at both ends of the peninsula. Along the northwest coast from Tijuana to Ensenada, an advertisement for a real estate conference at UCLA boasts, "there are presently over 57 real estate developments ... with over 11,000 homes/condos with an inventory value of over $3 billion ... all of them geared for the U.S. market."

Meanwhile, at the tropical end of Baja, a gilded gringo enclave has emerged in the 20-mile strip between Cabo San Lucas and San Jose de Cabo. Los Cabos is part of that global archipelago of real estate hot spots where continuous double-digit increases in property values suck in speculative capital from all over the world. Ordinary gringos can participate in this glamorous Los Cabos real estate casino through the purchase and resale of time-shares in condominiums and beach homes.

Although Canadian and Arizona speculators have taken large bites out of Baja's southern cape, Los Cabos -- at least judging from the registration of private planes at the local airport -- has essentially become a resort suburb of Orange County, the home of the most vehement Minutemen chapters.

Many wealthy Southern Californians evidently see no contradiction between fuming over the "alien invasion" with one's conservative friends at the Newport Marina one day and flying down to Cabo the next for some sea-kayaking or celebrity golf.

The next step in the late-colonization of Baja is the Escalera Nautica, a $3 billion "ladder" of marinas and coastal resorts being developed by Fonatur that will open pristine sections of both Mexican coasts to the yacht club set.

Meanwhile, the "Truman Show" has arrived in the picturesque little city of Loreto on the Gulf side of the peninsula. There, Fonatur has joined forces with an Arizona company and new urbanist architects from Florida to develop the Villages of Loreto Bay: 6,000 homes for expatriates in colonial-Mexico motif on the Sea of Cortez.

The $3 billion Loreto project boasts that it will be the last word in green design, exploiting solar power and restricting automobile usage. At the same time, it will balloon Loreto's population from its current 15,000 to more than 100,000 in a decade, with the social and environmental consequences of a sort that can already be seen in the slum peripheries of Cancun and other mega-resorts.

One of the irresistible attractions of Baja is that it has preserved a primordial wildness that has disappeared elsewhere in the West. Residents, including a very eloquent indigenous environmental movement, cherish this incomparable landscape as they do the survival of an egalitarian ethos in the peninsula's small towns and fishing villages.

Thanks to the silent invasion of the Baby Boomers from the north, however, much of the natural history and frontier culture of Baja could be swept away in the next generation. One of the world's most magnificent wild coastlines could be turned into generic tourist sprawl, waiting for Dunkin' Donuts to open. Locals, accordingly, have every reason to fear that today's mega-resorts and mock-colonial suburbs, like Fonatur's entire tourism-centered strategy of regional development, are merely the latest Trojan horses of Manifest Destiny.

10/16/2006

Companies bid to build new Mexican hydroelectric dam

MEXICO CITY, Oct 13 (Reuters) - Three consortiums have submitted bids to build a new Mexican hydroelectric dam called La Yesca, one of the largest projects launched during outgoing President Vicente Fox's six-year term.


The consortiums are led by Mexico's ICA (ICA.MX: Quote, Profile, Research)(ICA.N: Quote, Profile, Research), Italy's Impregilo (IPGI.MI: Quote, Profile, Research), and China's Sinohydro Corp., the Mexico's Federal Electricity Commission, or CFE, said on Friday.


The bids range from Impregilo's $805 million to Sinohydro's $1.25 billion estimate.The dam, one of the largest among dozens of hydroelectric projects in Mexico, will be built where the western coastal states of Nayarit and Jalisco meet and have a generating capacity of 750 megawatts.


The commission is due to rule on which bid it will accept on October 27. Building is expected to create 10,000 jobs and is due to be completed in 2011Situated on the Santiago river, the dam will have a basin of 12 million cubic meters (424 million cubic feet).That is about 20 percent bigger than the El Cajon dam which is close to completion on the same river system, some 40 miles (65 km) upstream of the La Yesca site.The CFE is holding tenders for around half a dozen power generation projects this year.

10/02/2006

DESTINATION MEXICO

DESTINATION MEXICO
MEXICO BRIEFING
Cozumel rebuilds, new ports sought

Almost a year after Hurricane Wilma destroyed or heavily damaged the two piers that handled most of Cozumel's cruise ship traffic, both are still months away from being reopened.

The Punta Langosta pier near San Miguel, Cozumel's only city, might be open by the end of the year, a spokeswoman for the island's tourism board said last week. But Punta Maya, a much larger dock with a sprawling complex of restaurants and shops, was destroyed and will reopen "sometime" in 2007.

Most visiting ships will continue to ferry passengers to the downtown pier by tender boat.

The rest of the country is making up for some of the lost capacity with new or modernized ports accommodating bigger ships and providing year-round service. With 3,100 cruise ships and 6.5 million visitors, according to its tourism board's 2005 statistics, Mexico is the world's top cruise destination.

Ensenada, hub of Baja California's burgeoning wine industry and Mexico's second-most visited port, is working with cruise lines to create more West Coast itineraries. Puerto Vallarta's port is expanding to berth multiple megaships at one time, including two new docks. Chiapas completed a cruise terminal in February and expects to serve 10 ships next year. Campeche, in the Yucatán, is negotiating to bring cruise business into its historic port.

Pacific coast recovery

Recovery from Hurricane Wilma has overshadowed hurricanes John and Lane, which slapped Pacific Mexico around this August and September but did little lasting damage.

Mexico Boutique Hotels, with properties in Los Cabos, Acapulco and Zihuatanejo, reported they were up and running a week after John swept through. Mazatlán, granddaddy of Pacific resort cities, invoked "business as usual" a few days after Lane brushed by.

Some hotels seized upon a marketing opportunity, announcing new hurricane policies appealing to hurricane-wary travelers. Palace Resorts, for example, with all-inclusive properties in Cancún, Riviera Maya, Nuevo Vallarta and Cozumel, is offering rebooking, relocation and rescheduling with rate guarantees, and cancellation within 72 hours of scheduled arrival at no penalty.

First things first

Frequent travelers to Mexico know Mexicana is one of the best airlines going, so they also need to know that flying Mexicana out of San Jose means a terminal change. Mexicana's move from Terminal C to Terminal A, beginning Wednesday, is the first of a series of changes at Mineta airport. Passengers currently depart from Terminal C and arrive at Terminal A.

Cancún, Mexico's second-busiest airport, is now using movable counters to check passengers in and print boarding passes anywhere in the airport via wireless link to its central computers. The new process should reduce waiting times and might lead to special services such as group check-ins without standing in line.

Sinaloa, the state including Mazatlán, raised its hotel tax from 2 percent to 3 percent this summer. The additional funds will pay for tourism promotion in the state, which has increased air service from the United States and Canada and is building new roads, some connecting with western U.S. states.

The great outdoors

Two Mexican navy patrol ships have given their lives to revitalize Cozumel's famous but hurricane-battered reefs. The 85-foot Laguna Mandinga and 42-foot Patzcuaro were submerged in June as attractions for divers. In the coming year, three more ships and an airplane will be sunk outside the National Marine Park to maintain the draw of Cozumel's extraordinary underwater ecosystem.

Ecotourism in Chiapas got a boost recently from a new information center in San Cristobal de las Casas. Travelers can also make reservations with the many organizations and agencies operating among the region's mountains, rivers, volcanoes, forests and canyons. The Chiapas Ecotourism Info Centeris operated by SendaSur, which manages ecotourism in Mexico's southernmost state.

Puerto Vallarta villas

Mexico Boutique Hotels, a reservation and marketing association for small, independent hotels in Mexico, has created a group of villas modeled after its collection of 45 hotels.

Costa Vallarta Boutique Villas includes six luxury properties in and around Puerto Vallarta, chosen and inspected by the association's management. Plans call for 25 additional properties by the end of the year. Villas include concierge service and a staff.

At the original Mexico Boutique Hotels collection, meanwhile, rates are unexpectedly low through the Thanksgiving and Christmas holidays. For as little as $75 a night, visitors can stay in unique lodging in intriguing destinations, such as Posada de las Minas in the rustic, artsy mining town of Mineral de Pozos; Azúcar, a bungalow retreat in tropical Veracruz state; or Xaloc, a resort of nine palapa bungalows on a virgin beach on the small Caribbean island of Holbox.

In Jalisco, the state whose town of Tequila earned World Heritage status this summer, the CasaMagna Marriott Puerto Vallarta Resort is offering a tequila-themed Secretos Reposado package through Dec. 16, starting at $222 per night for three nights, including a bottle of tequila and a tasting with the resident tequila sommelier. The resort serves 60 brands of tequila, including its own brand produced from agave azul growing on the property.

And if that's just too ... ordinary, a mere $4,000 a night will get you the villa in Costa Careyes (south of Puerto Vallarta) that graces the cover of September's Architectural Digest: three bedrooms, including a 200-foot infinity pool, stargazing tower/media room, 270-degree ocean view and staff of seven. Previous guests include Rothschilds, Gates, Armani, Tarantino and Gere.

Other activities beckon besides surfing

Other activities beckon besides surfing
Sayulita, Mexico

From the far southern longboard breaks of Punta Mita to the beach-breaking tubes at San Pancho to the boat-accessed reefs of Chacala, Nayarit delivers consistent, warm-water surf for all levels. It is renowned as one of the best surf coasts on the planet.

Sayulita offers a great right break for beginners and longboard riders, and a speedy left break for rippers. Nayarit's waves are smaller in the summer months - the area's offseason - but even 3-foot waves can provide 20-second rides.

The swells swell in the winter, when waves can reach triple overhead heights. The winter is when the humpback whales crest in Sayulita's small bay, delivering a buoyant experience for surfers waiting for that perfect wave. Sayulita abounds with surfboard rentals ranging from $15 to $25 a day depending on the quality of board.

Don Pedros board rentals (Calle Marlin #2, 329-291-3090) on the beach, run by the diminutive surfer Davy, offers deals for week-long rentals of quality rides.

Punta Mita offers six slowly peeling breaks perfect for lazy-day longboarding. The beach-pounding breaks at San Francisco - which for some reason is known locally as San Pancho - and De lo Marcos are much less crowded but demand a bit more skill (hint: Bail early or eat sand).

Some surfers hire a panga boat in Sayulita ($45 for a quick session to $150 for all-day hunting) to ferry them to distant reef breaks and more remote waves along the Nayarit coast.

Paddle softly around the Sayulita local surfers and definitely don't drop in on them. Sayulita beginners are better off learning the art in the early morning hours before the aggressive, talented and tourist-weary local surfers take over the break. For a show, watch the locals put on a display of surfing prowess. Some of those young rippers are international surf stars, and their skills are unrivaled.

For lessons, check out:

Duende Vista's Surf Dawgs on the beachfront provides two-hour lessons with board rental for about $25.

Tigre Surf School, owned and operated by international surf champion and Sayulita local Tigre Cadena and his brothers Diego and Regis, provides top-ranked tutorials for similar prices.

Bev Sander's Las Olas surf camps provides women-only surf instruction, promising to "turn women into girls" (lasolas.com)

While Sayulita - and most of Nayarit for that matter - is primarily a surfing playground, there are many options for play beyond board-wrestling.

Fidel Ponce's Blue Marlin Fishing Tours in Sayulita (Caracol and Manuel Navarrete, 329-291-3563, although his office is really his boat, so ask for him among the pangas on the beach) is renowned for ferrying pole-wielding vacationers to the sweetest fishing spots in the region. Fidel charges roughly $30 an hour and offers snorkeling and surf-break tours, as well.

Snorkeling can be a challenge along the coast of Nayarit and especially in Sayulita because of the relentless waves. But a short stroll south and west of Sayulita's square to the Playa de los Muertos can provide some exceptional snorkeling. The tiny cove is protected from the waves, and a series of large pelican-painted rocks in the cove provide refuge for an array of multihued ocean critters, including lazy blowfish and darting dorado. Best to bring your own gear if you plan on snorkeling. The Playa de los Muertos - there's a cemetery next to the beach, hence the name - is a popular escape from the often zany Sayulita beach scene.

Horseback galloping along white sand, harnessed zip-lining through dense jungle canopy and monkey-spotting mountain tours are offered by Rancho Mi Chaparrita. The horse-tending crew at Rancho provides well-salted and sanded visitors some respite with steamy excursions into Nayarit's forbidding jungle. Stop by their offices across from the baseball field in Sayulita or call 329-291-3112.

Finance North America Makes it Possible to Pull Equity From Property in Mexico

Finance North America Makes it Possible to Pull Equity From Property in Mexico

SAN DIEGO, Sept. 29 /PRNewswire/ -- Even as Mexico's real estate market
heats up, long-time owners throughout the country are discovering a hidden
goldmine in the form of equity in their homes and land there.

As recently as last year, the primary way of tapping value in property
south of the border was to sell it. This is no longer the case thanks to a
clever solution making it possible to access a home's value in Mexico with
an equity line originating in the United States.

Helping to unearth these secret riches is Finance North America
(http://www.financenorthamerica.com/) -- a San Diego-based firm that in
2005 pioneered US-based financing for property in Mexico. This made it
possible for Mexico's real estate to be bought and owned by residents of
other countries using traditional US-style mortgages.

Now with cash-out financing available on Mexico's real estate, families
long in need of additional cash sources can begin tapping into their equity
in real estate investments from Tijuana to the Yucatan for items such as:

* Home improvements

* College educations

* A new car

* Vacations

* Buying additional real estate

By providing American mortgages and other financial services to all
types of properties throughout Mexico, FNA delivers the convenience and
lifestyle ex-patriots living there desire. In addition to removing the
traditional requirement of having to pay for everything in cash, FNA's
mortgage programs also provide the opportunity to take cash out of
properties south of the border without prepayment penalties.

From Puerto Vallarta to Los Cabos, San Miguel Allende to San Felipe,
Americans and Canadians have been investing in retirement and vacation
homes they've long desired. Custom-built and resales continually lure
Northerners to own their piece of the beach in this growing market.

And thanks to Finance North America's new Equity Cash-Out Program, the
only decision one now needs to make is which of those other dreams to fulfill
first.