2/28/2007

Death, taxes and Mexico

Tuesday, February 27, 2007
No one expects to live forever. Yet some naively think that moving to Mexico will kill their obligation to pay income taxes. In fact, U.S. citizens have to pay annual income taxes on all income earned from any source anywhere in the world, no matter where they live. While Americans moving to Mexico may escape the rat race, they still don't avoid death and taxes.

Of course, the all-American game of reducing and/or deferring taxes legally becomes just that much more interesting (read: complex) once two federal governments are involved.

Deciding issues related to estate taxes, life insurance, annuities, business or personal deductions and expenses requires specialized tax and legal counseling. Some experts recommend expatriates establish an offshore asset protection trust, while in other cases the creation of a foreign or domestic company is the best strategy. These are decisions to be made before crossing the border to buy real estate. And, then there is always the matter of citizenship.

It was widely reported that investment fund legend John Templeton, Kenneth Dart of Dart Container and Campbell soup heir John Dorrance III all renounced their citizenship and, in turn, legally escaped U.S. income and estate taxes. U.S. citizens have a constitutional right to acquire citizenship from other nations as well as the right to end U.S. citizenship. Not surprising, the U.S. government assumes that American citizens want to remain citizens. So, before a U.S. citizen can become expatriated, obvious proof of that intention is required in the form of a deliberate act. One must officially must renounce legal citizenship by visiting a U.S. embassy or consulate abroad, answering a standard questionnaire, then signing a formal document requesting an end to U.S. citizenship.

U.S. law also affords American citizens the right to dual citizenship. That is, U.S. persons have the right to acquire a second citizenship and passport. That dual status can be useful for those who engage in offshore business or make their home abroad. In Mexico, it relatively easy to acquire Mexican citizenship after having made Mexico one's primary residence for at least five years. This requires documentation and, for property owners, important tax implications.

Not to be denied control of their constituents' income, the U.S. Congress has considered following the Canadian model by imposing capital gains tax on all the property owned by a U.S. person who relinquished U.S. citizenship with the intent to avoid U.S. taxes. The American Jobs Creation Act presumes that anyone who ends citizenship who paid more than US$124,000 in net taxes for the previous five years or has a net worth of more than US$2 million is a tax expatriate and left to avoid taxes. Moreover, former U.S. citizens who return to the United States for more than 30 days will still be taxed on their worldwide income.

In the final analysis, there are only two ways to avoid the IRS -- formally relinquish U.S. citizenship and the right to visit the United States for more than a month at a time, or death. Just moving to Mexico won't do it. Nevertheless, the good news is wherever Americans choose to live, we will all stop paying taxes eventually.

'Learn how to shop for Baja real estate' weekend cruise planned for July

By O'SULLIVAN INTERNACIONAL INC.
Tuesday, February 27, 2007


Ever wonder if retiring in Mexico is an option? Who would you ask to get basic questions answered: Can Americans own land? (Yes). Who can explain the process clearly? (Specialists). Are American property owners' and buyers' rights protected under Mexican law?

Investing in a foreign country has complexity requiring specialized knowledge and skills. Before considering a real estate purchase, foreign buyers in Mexico must assemble a variety of U.S.-Mexico transactions and legal linkage specialists -- attorneys, accountants as well as banking and finance professionals. Moreover, these specialists have to be good at working as a binational, bilingual and multicultural team.

More trouble than it's worth? The fact is there are fundamental differences in the way people buy real estate in the United States compared to Mexico. Many Americans buying in Mexico take risks they would never dare take in the United States. They fail to prepare their finances, taxes and bank accounts before they shop and then buy compulsively. They buy without having anyone defending their interests in Mexico. That's stupid. Real estate salespeople in Mexico tend to underplay the initial cost and complexity of U.S.-to-Mexico real estate transaction. Many serve as the sellers' representative while acting as if they are the buyer's agent.

Tip 1: Because there are no licensing requirements for real estate agents in Mexico, buyers require a competent and honest Mexican attorney -- preferably bilingual.

Tip 2: The buyer's attorney writes all contracts in English first to get the buyer's approval. The English version is then officially translated into Spanish to be enforced under Mexican law.

Buyers need to do their homework. They should attend a seminar to learn about the legal requirements of both countries: taxation, banking, judicial, etc. Many seminars are offered by competent real estate franchises and brokers. Buyers should also do a market analysis by visiting the area personally, recognizing that property value comes with education, experience and sound judgment.

How better to learn how to shop for real estate in Mexico than by taking a weekend Royal Caribbean Cruise from Los Angeles to Ensenada and back? We have reserved just 20 spots for our inaugural cruise seminar in July. It's a wonderful weekend of pampering, travel and business all in one.

After leaving the Los Angeles Harbor Friday after work, we wake Saturday morning in Ensenada, Mexico. After breakfast, we take a custom bus tour of the best-of-the-best Baja Gold Coast realty. Leave your wallets, purses and pens behind, this is not a buying tour. This is a no-pressure educational seminar to teach how to shop for Baja real estate. On the way, we'll see where Donald Trump is building the tallest buildings in Baja, the "Russell Crowe perch" (Crowe lived in a luxury condo next to the Fox Studios Baja while filming "Master and Commander") and the place where the likes of Carlos Santana once called home.

The next day back on board ship we'll give a series of brief presentations by binational services specialists -- attorneys, accountants and others who will make themselves available to answer all your questions. Since everyone wants to spend time on the ship eating the delicious food, enjoying the fantastic entertainment and playing, we promise to keep these presentations succinct and Q&A comprehensive. Your critical legal and tax questions will be answered, you'll understand how to recognize value, and learn how to negotiate a good deal and walk away from a bad one. That alone could save you the cost of the entire weekend.

This weekend cruise is an ideal way to decide if buying real estate in Mexico is the right thing to do, how to do it safely and what standards to expect. You'll understand the process, prices and protections. If you do buy, this cruise will be the best way to ensure that your rights and interests are protected in Mexico. If you don't buy, you'll have an interesting and enjoyable weekend.

If you would like more information on the cruise or are considering investing in Mexican real estate, contact O'Sullivan Internacional Inc. at shrinktheplanet@gmail.com.

Resort community Punta Mita builds on growing real estate demand in Mexico

By MARTIN ELDER, Special to the Daily Transcript
Tuesday, February 27, 2007

The demand for Mexican real estate continues to grow at the high end, leading to wider availability of mortgages and positioning Mexico as one of the fastest rising real estate destinations in Latin America. This claim was made in a recent report by leading financial and real estate experts from Credit Suisse, Mexico Mortgage Market and U.S.-based consultancy Ernst & Young.

An example of such real estate can be found at Punta Mita, a master-planned luxury resort and residential community.

"With the recent slowing down of the U.S. real estate market, savvy buyers are starting to look beyond the U.S. border for new real estate options," said Lynne Bairstow, director of marketing and operations for Punta Mita and its developer, DINE. "Demand for real estate in Mexico and Punta Mita has increased dramatically as it becomes an ideal option for resort home ownership."


The Four Seasons Punta Mita Private Villas, ranging in size from 6,475 to 7,995 square feet, are distinguished by private infinity edge plunge pools, gourmet kitchens and spacious covered terraces and patio areas.

Several factors have played a key role in Punta Mita's popularity as a top-choice real estate investment, including proximity and easy access, Mexico's political and economic stability, and excellent real estate values.

Punta Mita is located 45 minutes northwest of Puerto Vallarta, on the Pacific Coast of Mexico. It lies at the northern tip of Banderas Bay, Mexico's deepest natural bay and is bordered by the rugged Sierra Madre Mountains to the east. The resort and residential community covers more than 1,500 acres on a spear-shaped peninsula surrounded on three sides by white sand beaches, Pacific Ocean waters and lush tropical flora.

The surrounding area of Punta Mita and Puerto Vallarta are known for a wide range of interesting activities, including scuba diving, sailing and windsurfing, swimming with dolphins, whale watching, jeep safaris, horseback riding, cultural tours, fine dining, shopping and nightlife. Punta Mita's excellent infrastructure is strictly held to U.S. standards. It includes a secure water supply, an on-site medical center, fiber optic cable phone service, an ecologically sound wastewater treatment plant and other benefits.

It is currently home to The Four Seasons Punta Mita Resort, various residential homes and the Jack Nicklaus Signature Golf Course at Punta Mita, ranked World's Best Golf Resort by readers of Conde Nast Traveler in 2006 and one of the best golf courses by Travel + Leisure Golf in 2006. The master plan of Punta Mita includes several luxury developments in the works, including the St. Regis Resort & Residences (December 2007) with a second Jack Nicklaus Signature golf course, the La Solana Resort (expected to open in 2009) and a variety of exclusive residential offerings and estate lots to complete this very privileged resort community.

"While the Los Cabos area has been an established, well-accepted and popular ownership destination for North American buyers, attention is now shifting to Punta Mita, Mexico's newest and most exclusive luxury real estate destination," Bairstow said. Over 95 percent of Punta Mita's owners are U.S. citizens.

Punta Mita Properties' team of real estate experts can clearly explain all necessary information and paperwork for Americans and foreigners to purchase real estate in Mexico, including trust deeds title insurance, real estate taxes and financing.

Punta Mita offers a wide selection of ownership options, including full-ownership condominiums (starting at $575,000), town homes, villas and luxury beachfront estate lots (priced up to $7.2 million) at Kupuri, the destination's newest residential community.

2/26/2007

Mexico: In Playa Chacala, sun, sand and something more

By Christopher Reynolds, Los Angeles Times
February 24, 2007

Sure, there's a great beach here, fresh fish, tall palms and only about 400 locals to share them with. But let's start with the treachery and deception."You wouldn't believe the snakes. Snakes as big as your head," says Ben Laird, a Wisconsonite who bought a vacation home here last year.
"People are poisoned in Chacala every day," deadpans Richard Laskin of Hornby Island, Canada, who has been coming here for 10 years."Are you sure that was a whale?" asks Laskin's friend Stu Reid, gazing offshore. "Could have been drums of toxic material."
Then — having done their best to deter the reading public from invading their winter haven — these good-natured liars go back to their tropical idylls. Laskin and Reid tuck into their breakfast at the Mauna Kea Café, one of about 10 restaurants in Chacala, as they gaze down upon a canopy of green, a deep blue sea, a deep blue sky and a few dozen pelicans, swoop-commuting between the two.
Sometimes, a lie is really just an invitation. And the truth about Chacala is just as intriguing, especially for a traveler who wants to actually meet Mexicans while vacationing in Mexico, who likes his coconuts straight from the tree, who doesn't need the bright lights of Los Cabos or Cancún.

Chacala, a village 60 miles north of Puerto Vallarta on Mexico's Pacific Coast, is built around the beach, a handsome half-mile crescent of jungle-adjacent sand. At the southern end of the beach, black volcanic rocks murmur in gentle surf. In the middle of the crescent, half a dozen palm-shaded restaurants serve fresh fish and shrimp (and keep a machete on hand for those new-fallen coconuts). To the north, two dozen battered little fishing boats are tied up at a modest dock.

In town, several lodgings have popped up in the last few years, most offering ocean views, modest amenities and nightly rates from $50 to $90. A little farther north, more than two-dozen luxury vacation homes, some of which rent by the night, have gone up in a gated compound called Marina Chacala.

But what sets Chacala apart from so many other modest but growing Mexican beach destinations is this: Thanks to the arrival of three hippie siblings here at the end of the 1970s, the town is awash in social experiments, many of them built around the idea that locals and tourists need to meet and learn from one another.

Under one 11-year-old program, called Techos de México (Roofs of Mexico), half a dozen villagers have added upstairs rooms and terraces, most with ocean views, none more than a five-minute stroll from the beach. When not snapped up for the season by wintering Canadians, most of these rooms rent for $22.50 to $60 a night.

Other tourists can volunteer on community projects, attend yoga or meditation seminars or learn Spanish as guests at a 24-year-old beachfront retreat called Mar de Jade (pronounced Hah-day), which in winter is usually priced at $120 to $135 per person per night, double occupancy, meals included.

But you don't have to volunteer. Instead, you can spend $50 a night on a hotel room with an ocean view and lie around. Or spend $625 a night on a mansion that sleeps 10 and lie around in splendor .

You can take a $10-per-person boat trip to snorkel by the rocks off Chacalilla beach. You can fish for dorado or sierra or surf at La Caleta Point. You can kayak between rock formations and secluded beaches, go birding in a mangrove swamp to the north or drive half an hour east to the petroglyphs at Alta Vista. You can ride a horse through jungle to a secluded beach or drive about two hours into the hills and see Lake Santa María, its waters collected in the caldera of an ancient volcano. Or you can stroll back and forth, with refreshment breaks, on that grand crescent of sand.

Ahhh, seclusion

Until the first paved road connected the village to Highway 200 seven years ago, the only way into Chacala was by dirt road or boat. Now, business is picking up and the occasional RV, rental car and taxi has joined the local traffic, including the cab that delivered me to my lodgings at dusk one day.

It had been a three-hour flight from LAX to Puerto Vallarta, then a 90-minute ride, and my first thought, rolling into town, was, "Uh oh." Two blocks of dirt roads, sleeping dogs and ramshackle storefronts. That was the commercial district.

Ahhh, but then I stepped out to the beach. It was nearly empty, a slight breeze blowing. The tall palms, the quiet, the loop of the beach between the rocky points at either end — this was a landscape to banish worry. In the restaurants along the sand, a small band of Canadian snowbirds nursed seafood and cervezas. A little way up the beach , 20 RVs were parked in the palm grove next to the beach, their owners paying $5 a night for the privilege.

Looking for a meal one night at about 7:30, I found nearly every restaurant closed. They've had electricity here for years, but from the look and sound of the beachfront after sunset, you'd think they were still waiting for it.

Intrigued by the gated luxury homes of Marina Chacala, I greeted one homeowner from Seattle and soon was getting a tour of his nearly completed villa, the onyx spiral staircase as well as the 400-square-foot bathroom in the upstairs master bedroom.

Remember, however, that the nearest ATM is six miles up the road in Las Varas. Dozens of residents still live in dirt-floor houses, roosters greet each dawn, and the dominant architectural style is brick box, not Spanish Colonial. Outside of Las Brisas restaurant, the gated grounds of Marina Chacala and the lodgings Mar de Jade and Majahua (where I stayed), little English is spoken.

But in four days, I never met anybody from Southern California, saw only one jet-powered ski in use and was never invited to go parasailing or purchase a time share.

"It's still real Mexico down there," said Ben Laird, he of the imaginary snakes, gazing out at the town one afternoon from his hilltop home in Marina Chacala. "Chickens at your feet. And everybody knows everybody."

International real estate sales challenge brokers and customers

Agents broaden their skills and knowledge of global methods to attract clients

Poetry may be lost in translation, as Robert Frost declared, but in the world of international real estate, other things can be endangered too.

A lack of familiarity with title or contract procedures — by the agent or by the buyer — can be just one of the problems when different languages and cultures are involved in a transaction.
And such challenges have never been more evident, especially in the United States. The country's immigrant population continues to have a strong presence in the domestic market and the weak dollar, particularly against the euro, is luring many second-home buyers and investors from abroad. In addition, U.S. baby boomers are retiring and many of them are looking overseas for their next homes.

"The home buyer of the future is no longer 'there.' The global market is 'here.' That's been the real sea change," said Miriam Lowe, vice president of international operations with the National Association of Realtors. "Not white, not English-speaking. More diverse."

And as a result, the association is finding that more agents at home and around the world are interested in its specialty programs, Lowe said.

The Certified International Property Specialist program, which has been in existence for some years, teaches brokers how to work with foreign clients; the Transnational Referral System, a program started in 2004, connects agents with one another, educates them about the etiquette of referrals and holds them accountable for paying referral fees, a practice that is not standardized throughout the world.

"In countries where the commission rates are very, very low, they're beginning to open their eyes to the opportunity to make some income on referrals to the U.S.," Lowe said.

And while some agents said they had yet to see their first referral, others have had a different experience. Julie Kerschner, an agent based in Arizona and in Los Cabos, Mexico, said all of her business now comes from referrals — many in the United States but also some from Japan, South Africa, Thailand and New Zealand.

Raymond Covyeau, a Chicago agent who has an international specialist certification, said, "When I was trying to do this 20 years ago, you were dependent on the telephone and the fax." Agents interested in international business did attend annual meetings to network, but that was about it, he said.

In contrast, last year there were 2,275 certified specialists worldwide, about twice the number that existed in 1999, according to association data.

And 1,300 of those were in the United States, a number that has grown 20 percent a year during the past two years, Lowe said.
Other countries' real estate organizations also are offering training and forming strategic alliances. In November, the Association of Real Estate Professionals in Mexico entered a reciprocal membership agreement with its U.S. counterpart, said Gerardo Paredes, president of the Mexican chapter of the International Real Estate Federation.

Paredes explained in an e-mail that a member of the Mexican association now is automatically a member of the U.S. group too, entitled to attend training programs and to be involved in other activities.

While the level of the U.S.-Mexico affiliation is unusual, the U.S. association also has bilateral partnerships with associations in more than 50 countries.

Buyers are the ones who benefit most from the arrangements, say agents — and people who have purchased property recently.

"When somebody speaks your language and you understand 100 percent what they're saying, you feel a little more comfortable," said Gary Marsden, a car dealer from Wisconsin who last year paid $350,000 for a three-bedroom, three-bathroom condo a half-mile from the beach in Los Cabos, Mexico.

He had traveled to Mexico on business and loved it, but only flirted with the idea of buying a retirement home there because of the possible risks: "Trying to get the people to live up to what they say. You've got to make sure you're holding money back and that everything is there that's supposed to be there," he said. "Things can get a little slipshod."

After some aspirational Web surfing, he found Kerschner, who was certified as a specialist three years ago and now attends regular member breakfasts.

"She knew the local ropes," Marsden said. "It's about much more than selling a house down there. Doing business with a foreign and local government, it's just a totally different way."

To be certified, brokers must take seven days of seminars on real estate in Asia, the Middle East and other regions, pass a test and complete three international transactions. Courses cost an average of $1,200 and are available online.

Participants said they picked up various kinds of information: Which countries use which sales standards? What happens if you don't receive a referral fee? Who has reliable information on the resort market in Brazil or could help draw up legal papers in Bulgaria? And how to manage your country's image when prospective clients are thousands of miles away?

"There are some barriers which, in some particular cases, affect the growth and speed of international transactions," Paredes wrote, saying that stereotyping in the media was just one of the things deterring the growth of Mexico's commercial real estate market. "These legal and cultural differences can be solved with appropriate broker training."

Agents who complete the certification program then pay fees for online resources and networking opportunities.

Not everyone sees an increase in business after the classes. "I don't do much by the way of international. We're in the Midwest. It's not the same as Florida, California, New York City," said Donald Sturgeon, an agent in Cedar Rapids, Iowa, who has international certification.

But many agents have had a better result. "This designation gives me legitimacy," said Henda Salmeron, a residential agent in Dallas who went through the training in 2004. "It illustrates to foreigners that I've made a commitment to helping them and working with an international clientele."

The Dallas market is driven by buyers from Mexico and Latin America, but Salmeron works primarily with clients from France, Australia, England, Israel and her native South Africa.

"I have won business because I've competed with agents who didn't have this," she said of the certification status. "I think the designation does give me the opportunity to think about ways to do business, more so than the ways you would if you didn't have the training."

She described the difficulty of working with a couple from Bosnia who did not speak English or any of her three other languages: Dutch, German and French. She used a translator, but it still was hard to guide them through the process of buying a home, let alone convey the intricacies of U.S. legal and financial practices, she said.

"Even locally, we have nuances, so when you're dealing internationally, you have to be even more careful," Salmeron said.

2/23/2007

First U.S. PGA Tour event in Mexico opens with shot at 'Devil's Mouth'

PLAYA DEL CARMEN, Mexico: The first U.S. PGA Tour event in Mexico doesn't have Tiger Woods, Phil Mickelson or the prestige of the Match Play Championship that also is being held this weekend.

Instead, it boasts the "Devil's Mouth."

With white sand in front and mossy grass dripping over various shades of limestone around the sides, the "mouth" actually is the opening to an underground, cave-like passageway that comes out behind the second hole.

Known as a "cenote," it's the first of many natural delights found on El Camaleon, the Greg Norman-designed venue for this slice of U.S. PGA Tour history, the Mayakoba Golf Classic, which opens Thursday.

"It gives character right away," Norman said. "It's an opening statement: 'Here it is!'"

Viewed from tee-to-green, the area is shaped like an upside-down egg. It is about 30 yards long and 20 yards wide. It's steep, too, something not truly appreciated until standing on the green side and looking back toward the sandy front.

This week, it's also marked as a hazard with three stakes and a painted circle — all red, of course.

As striking as it is, the intimidation will be mostly for show this week.

The mouth is unlikely to swallow many shots, seeing as it is 320 yards from the tee of this 554-yard, par-5 hole. Pros should easily be able to keep their drives short or wide, then have little trouble clearing it with their second shots.

Still, during practice rounds and perhaps even the real ones, carts parked all around the area and walkers came by, too, to take a peek and wonder about this natural wonder.
"It's a bad place to be when you're playing golf, but it might be a fun place to be with your girlfriend," joked one caddie.

Norman recommended doing more than just looking at it.

"You can walk through all the bats and bat (droppings)," he said with a smile befitting his Shark nickname. "Go right ahead. I've done it."

It doesn't take going all the way through to appreciate the cenote.

From just a few feet in, thousands of stalactites are visible, some still dripping water. There is more water gurgling in pools, with plants growing out of rocks and thick roots of trees that are hundreds, if not thousands, of years old.

And, yes, there are a few shiny white golf balls.

"A lot of people don't go down there because it's hard to understand what exactly it is," said Douglas Goubault, the course's director of golf. "Once you get down there and start to see the depth of it, see how cool it is ... it's beautiful."

The story of how it was discovered is pretty cool, too.

Developers knew all along about underground structures because many of them were used to form a Venice-like canal system throughout this resort community along the Riviera Maya. But it wasn't until the course already was laid out and bulldozers were shaping the holes that this cenote presented itself.

The introduction came when a machine rolled over and the ground gave way. Once the rubble was cleared, workers saw the water-filled cave.

There was little thought given to filling it in. Norman believes in disturbing the environment as little as possible; besides, the key to all real estate is location, location, location, and a natural obstacle like this is tough to beat.

"The whole design stayed exactly as it was," Goubault said. "It was just perfect. It's just a wonderful characteristic to have."

Goubault grudgingly calls the cenote the signature piece of the course, noting that there are many more, such as the two holes facing the Caribbean Sea and many more lined by mangroves, areas densely packed with trees and other vegetation. Anyone venturing into the mangroves to find a wayward shot is more likely to discover an iguana or one of the course's namesake chameleons.

Although the world's top 64 players are at the Match Play in Arizona, the field for this event includes more than 40 U.S. PGA Tour winners. Those guys have combined for 148 victories, including nine majors, two by Lee Janzen.

There are also entries from 12 countries, with Latin America representatives from Mexico, Paraguay and Argentina.

"This probably already is or is going to be the biggest tournament, the most important tournament, in Latin America," said Carlos Franco of Paraguay.

Mexico sees rise in foreign investments

Multinationals pumped in $18.9 billion in 2006, up 6.4%, according to government projections.
By Marla Dickerson, Times Staff Writer
February 22, 2007

MEXICO CITY — Foreign direct investment in Mexico probably increased 6.4% last year as U.S. manufacturers continued to ship production south of the border, the government said Wednesday.

But the infusion of $18.9 billion by multinational companies paled in comparison with the economic contributions of another set of "investors": immigrant workers who sent home $23 billion from their mostly low-wage jobs in the U.S.

"It's an OK number. Not spectacular," said Alberto Ramos, emerging-markets analyst at Goldman Sachs in New York, referring to foreign companies' spending on factories, equipment and real estate in Mexico last year. The preliminary figure released by the Economy Ministry was identical to the foreign direct investment recorded by the Bank of Mexico in 2005.

Officials said they expected an upward revision in the 2006 figure in coming weeks, leading them to project an increase from the previous year. The manufacturing sector accounted for 61.3% of the inflows in 2006.

The Big Three U.S. automakers and Toyota Motor Corp., in particular, have invested heavily in Mexico in recent years to take advantage of its lower labor costs and proximity to the U.S., the world's No. 1 automobile market. U.S. companies remain far and away the largest foreign investors in Mexico, providing nearly 64% of direct investment last year. Mexico has attracted more than $200 billion in foreign direct investment since the North American Free Trade Agreement was implemented in 1994.

The Economy Ministry said in a statement that the projected uptick in 2006 reflected "the confidence that international capital has in [Mexico's] economic and political direction."

Analysts such as Ramos characterized the performance as respectable but said Mexico needed to make changes to its tax code, labor laws and energy sector to garner significantly higher levels of investment. Indeed, the importance of remittances to the economy is considered a sign of weakness.
Meanwhile, investors increasingly are looking to the dynamic economies of Asia to build factories and set up businesses. As recently as 2000, the countries of Latin America and the Caribbean nabbed 41% of all foreign direct investment in the developing world, according to figures from the United Nations Conference on Trade and Development.

In 2005, that share had fallen to 31%; Asia's share jumped to 60% from 55% during the same period. "Latin America is losing importance and relevance," Ramos said. "Populism and political instability have eroded the region's appeal for foreign investors to commit capital."

2/20/2007

The 'Americanization' of Mexico

New English-language journal takes advantage of the growing population of U.S. expatriates living south of the border

Los Angeles Times

MEXICO CITY — The signs are unmistakable: an NFL game at Azteca Stadium, soaring land prices from Ensenada to Merida and a Starbucks infestation of the swanky Polanco neighborhood.

Though most U.S. residents are aware of the growing "Latinization" of the United States, a parallel phenomenon is taking place on the other side of the border. Already, at least half a million U.S. expatriates and long-term visitors make their homes in Mexico (plus another half-million Canadians). That number will soar as millions of retired baby boomers stampede south in the coming decades, remaking the cultural landscape in their own image.

Yet one thing this exile community has conspicuously lacked, until now, is a major English-language print journal to call its own. A handful of English-language newspapers and magazines from the United States are available here, including The New York Times and the Miami Herald's international edition. But Mexico's oldest, most visible niche English publication, the 53-year-old tabloid-style News, folded four years ago and hasn't fully been replaced.

That situation surprised Margot Lee Shetterly, 37, and her husband, Aran Shetterly, when the couple began scoping out a blueprint for Inside Mexico, the free, English-language monthly newspaper they launched last November.

"We were frankly surprised at the numbers, for the sheer size of the market," says Margot Shetterly, the company's president and managing editor, who like her husband never had worked for a newspaper before. "This is the kind of opportunity that comes along only once in a lifetime."

The couple seem determined to make the most of their singular chance.

Working out of their home in the fin de siecle Roma neighborhood with a core staff of eight, evenly divided between U.S. residents and Mexicans, they've produced a lively, attractive, 40-page gazette that offers something for both first-time sightseers as well as gringos who've gone fully native.

Unlike other past or present English-language papers, Inside Mexico targets ex-pats as much as casual tourists and businesspeople. And its feature-y writing style and emphasis on the arts, culture and lifestyles rather than hard news is more redolent of magazines than newspapers.

The print run of 20,000 is distributed at coffee shops, hotels and other touristy venues. But it's also being distributed in expatriate haunts and major beach resorts around the country. The couple also plan to open a radio station and have started distributing a weekly newsletter, the Tip, which goes out to 10,000 readers. Their Web site (http://www.insidemex.com/) also is attracting thousands of hits.

Heavy on profiles, features about cultural happenings and guides to the city's hot bars and restaurants, Inside Mexico takes some of its style cues from urban magazines such as "New York." But the Shetterlys, who write for the paper when they're not running it, say their true editorial model is the Village Voice or the Chicago Reader.

To that end, they vow that they will tackle hard-news topics such as Mexico's rampant drug-related violence and the real-estate scams that have afflicted some U.S. retirees in search of a Baja or Puerto Vallarta dream house.

"We may want to be an established presence ... before we take too many risks," says Aran, who holds the titles of the paper's editor in chief and CEO.

It all fits the Shetterlys' can-do, let's-put-on-a-show-in-a-barn approach to their work and shared life adventure. Aran, a rural Maine native, says he honed a passion for Latin culture while living in Cuba to research a book on William Morgan, an Ohioan who fought in the Cuban Revolution but had a falling-out with the revolutionary leadership and was executed in 1961.

Margot parlayed a University of Virginia degree in finance into jobs on Wall Street and at an HBO Web site. Then came Sept. 11, 2001. Three months later, the Web site was closed and Margot was off on a year-and-a-half sojourn that took her to Brazil, Venezuela and Belize. She and Aran met while working at a New York software company. "We've both done a little bit of everything," Margot says.

Big, Houston-based title company expands into southwest Texas


February 18, 2007
Feature Writer
As with many financial institutions, real estate agencies, and international trade groups, Stewart Title Guarantee Company, Houston, is expanding title insurance services – and many other products – along the U.S. Mexico border.

Stewart is described on the company’s Web site – www.stewart.com – as a “technology driven, strategically competitive, real estate information and transaction management company.”
The Houston firm’s relationship with Southwest Abstract Company, 115 E. Losoya St., Del Rio, is merely a continuation of a warm, 50-year collaboration. Despite the recent celebration of that golden anniversary, there’s no substance to a circulating rumor that Stewart is angling to own Southwest. “We’re not selling to anyone,” said Blake Lewis, Southwest Abstract vice president, Feb. 5.

Southwest Abstract has been in downtown Del Rio since 1910, Stewart Title got underway in 1893, and neither company has designs on any strategy other than continuing a range of services unique to southwest Texas consumers. But Stewart acted differently in other border cities last month when the company announced the acquisition of Border Title Group of Laredo.

Stewart’s purchase of Border Title included satellite offices in Eagle Pass, Alice, Carrizo Springs, Crystal City and Zapata, expanding on the company’s inventory of 9,500 offices worldwide.
Stewart pledged to retain existing management and staff at all the offices, suggesting the company’s new moniker, Stewart Border Title LLC, was little more than a name change.
Stewart offers a dizzying array of services through a vast network, including courthouse record technologies, flood zone determinations, financial services, GIS mapping, water rights title insurance, and title insurance of several kinds. Among the firm’s list of 22 service categories, one stands out of particular interest along the U.S.-Mexico border.

Mexico title insurance – guaranteeing the accuracy and security of land title to purchasers of land south of the Rio Grande – is not a big revenue generator for Stewart Border Title or Southwest Abstract, but it can be critical to those who need it.

Neither the Eagle Pass nor the Del Rio offices sell title insurance directly, but refer requestor information to the Houston headquarters to effect transactions. “We will tell people that it’s something else we can facilitate for them, but it’s not something we’re actively marketing,” Lewis explained.

International Living magazine lists only two title insurers working in Mexico on behalf of U.S. clients, First American Title Insurance, Dallas, and Stewart Title and Guarantee, Houston.
“We’ve probably had only five inquiries about Mexico land title insurance in the past six months,” Lewis said. “But just knowing what I know in this business, people even remotely thinking about buying real estate in Mexico would be crazy not to have title insurance.”

Arturo De Los Reyes, manager of Stewart Border Title Group, 703 Main St., Eagle Pass agrees with Lewis about the importance of insuring title to land purchases in Mexico. De Los Reyes and eight title insurance associates refer such requests from the United States to the Laredo office of Stewart Border Title, and inquiries from within Mexico are directed to Stewart offices in Mexico City, Monterrey, Guadalajara and Cancun.

“We started doing business over there because of all the international U.S. companies starting up business in Mexico, such as Wal-Mart, H-E-B, Sears, McDonalds, Whataburger, and Burger King,” said De Los Reyes. “All those franchises started looking for the same product in property purchasing that they had [available] in this country, namely to buy insurance to secure their title.”

But, again, when inquiries surface about title insurance in Mexico, De Los Reyes and his staff refer the requests to other offices. In Eagle Pass, his bread-and-butter revenue stream comes from traditional land purchases in the United States.

“We do a lot of commercial and residential title insurance, and ranches are a big part of our work here, too,” said De Los Reyes. “Commercial real estate is doing very well here now, and there are a lot of transactions going on in Eagle Pass for retail sales property.” The office transacts about 1,200 real estate deals annually.

With his Del Rio staff, Lewis hopes to dispel myths about land purchases in Mexico, particularly the persisting notion that Americans – or those without Mexican citizenship in general – are prohibited from buying land there. “People were just never aware that they could, but some of these rules have changed over the last few years,” Lewis said.

Marisol Fuentes, a Mexican attorney with U.S. citizenship working as escrow assistant for Southwest Abstract, explained that Americans have always been able to purchase land in the interior of Mexico. The confusion arises along a narrow strip of land, 100 kilometers or about 60 miles in width, circumnavigating the Mexican border with the U.S. and Guatemala, and inland from Gulf of Mexico and Pacific Ocean shorelines.

Within that perimeter ribbon, Article 27 of the Mexican Constitution of 1917 prohibited sale of land to foreigners, but a 1933 amendment and a 2000 interpretive rule modified the prohibition. The new “special procedure” – entitled fideicomiso, or trusteeship – enables land purchases when handled by Mexican banks acting as trustees for the transaction.

Lewis explained that, historically, property purchases were somewhat protected by “title opinions” rendered by attorneys, and his firm would prepare an abstract of title ownership – rather like a lineage of land possession – on which the opinions were based. “Title insurance came along to protect land purchasers against any missing information in the abstract to the title opinion,” Lewis said.

“Missing pieces of information” are compelling reasons for arranging title insurance today, particularly when buying outside the United States, Lewis explained.

2/19/2007

Access makes Puerto Vallarta a perfect snowbird perch

Tom Kelly
Herald columnist

Who were the first snowbirds? It depends on where you ask the question.

Historically, snowbirds have been retirees who escape the cold of winter for a warmer climate. Residents of the East Coast tend to say they were the first to dodge the snow by heading to Florida and the Caribbean. West-Coasters picked up the trend much later and invaded Arizona and southern California. The term snowbird also is given to a significant number of Canadians who make Victoria, B.C., their home in January and February.

Snowbirds usually are able to be away from home for long periods of time, often can afford to purchase a second home and have even been known to use their primary and second homes for creative tax purposes and income streams.

David Collins, chairman of Active Living International, a company specializing in the research and development of active adult communities, is an expert in predicting where snowbirds will prefer to land. His company's recent assignments have included a study of the 50-and-older housing market for Mexican developer CEMEX and the construction of a 150-unit retirement resort for Sensara Partners on Spain's Costa del Sol. The Spanish development, which opened in 2005, was honored by the National Association of Home Builders and was named the best retirement housing project in Europe.

The Mexican project, called Sensara Vallarta, is the first active adult community for people 50 and older to be developed in Mexico. It contains 250 luxury condominiums inside the grounds of the El Tigre Golf Course near Puerto Vallarta. The complex, designed by Mexico City architect Jose Vigil, who conceived many of the homes in nearby exclusive Punta Mita area, is a 15-minute drive from the Puerto Vallarta airport.

Why Puerto Vallarta? What makes this destination the choice over so many wonderful communities in the sun south of the border?

"In addition to the sun, Puerto Vallarta is all about access," Collins said. "There are more than 15,000 air flights a year now, and the prices are still reasonable for the type of person our developments target. Cancun definitely is a market, but it's more of a hotel market. Los Cabos is really more higher-end and not that easy for a lot of people to get to."

Active Living International's presence has led to additional interest in the Puerto Vallarta area for developers of the over-50 market. Front Porch Development, a Burbank, Calif.-based company specializing in the senior market, is partnering with Mexico-based Plenus for a project called Luma, a 440-residence community on the ocean in Nuevo Vallarta.

According to Active Living International, active adults are defined as people older than 50 with an independent, comfortable and active social life. They are physically fit and have a variety of interests, including travel, golf, tennis, swimming and socializing. Active adults think in terms of longevity rather than life expectancy. They typically retain their own homes but plan to acquire a second home and may downsize their living arrangements without sacrificing quality or convenience. They want quality, upscale options and amenities for a vacation or retirement lifestyle.

Sensara condominiums start at approximately 1,312 square feet for one-bedroom units and range up to 2,786 square feet for three-bedroom homes. Luma's condos start at 1,678 square feet for bedroom units and range up to 5,498 square feet for penthouses. Prices for both developments start in the $300,000 range, with the Luma penthouses commanding more than $1.2 million. For more information, go to www.mexicobuyersguide.com.

Active Living chairman Collins said Sensara Vallarta is designed for the homeowner who wants a luxurious, tropical escape from the stress of the real world that also has access to an unmatched range of activities and amenities. In addition to their own pools, clubhouse and restaurant, residents of Sensara homes will have memberships for Paradise Village's new sports club, plus entry to the Playa Royale Beach Club, which stretches along the Bay of Banderas.

Luma's waterfront residents also will have first-rate amenities including high-tech security, American-style health care, high-speed Internet, English-speaking staff and a "personal lifestyle" concierge program.

By definition, snowbirds take flight for the sun. However, with second-home prices rising in the U.S., the lure of the sun must include reasonable costs, available health care and non-negotiable, quality amenities. The world's leaders in over-50 projects are now betting on Mexico, and other countries south of the border certainly will follow.

Tom Kelly's book "Cashing In on a Second Home in Mexico: How to Buy, Rent and Profit from Property South of the Border" was written with Mitch Creekmore, senior vice president of Houston-based Stewart International. The book is available in retail stores, on Amazon.com and on tomkelly.com.

U.S. Developer Plans 400-Unit Full-Ownership Property for Seniors in Mexico

February 15, 2007
By Barbra Murray, Contributing Editor
Front Porch Development Co. has announced it will develop a 400-residence full-ownership property, targeted to the over-50 active adult community in Nuevo Vallarta, Mexico. Burbank, Calif.-based Front Porch Development claims to be breaking new ground as it will be the first American developer to penetrate the Mexican active adult full-ownership market with the waterfront development. Luma will be part of the English-speaking Paradise Village resort community, which sits along the Bay of Banderas about a half-hour from Puerto Vallarta. The property will feature a wellness center, meeting space, a café and bar, a library, a sports room and an art gallery. Additionally, the development will be designed to avoid disturbing the area's plant and animal life.
Front Porch Development is joining forces with Mexico-based real estate company Grupo Krone on the development of Luma. Grupo Krone has a presence in Mexico and the United States.
Front porch is a development partner of the non-profit senior living real estate company Front Porch, which has a portfolio of 13 retirement communities in California, Florida and Louisiana.


Marketing for Luma will be predominantly focused on prospective buyers in North America, but potential residents in Mexico will be targeted, as well. Construction is on target to begin this fall with a projected completion date of fall 2008 for the first series of residences; the remainder of the development will be finished within four years of construction start.

Mexico Aims at Tourism with Money


Cancun, Mexico, Feb 15 (Prensa Latina) Mexico wants to give a shot of 1.3 billion dollars to its tourist sector this year with important investments, in order to become among the five most visited countries of the world in a short time, said national executives.

Miguel Gomez Mont, president of the Fund to Foster Tourism (FONATUR), made this declaration to specialists and reporters on Thursday, before taking part in the fifth National Forum in Cancun.
Eleven Mexican states will benefit from the monetary infusion, as the plan is to surpass the 22 million foreign tourists last year with more varied offers.
Far beyond Pacific and Caribbean spas like Acapulco and Cancun, favored destinations will be Aguas Calientes, Coahuila, Baja California Sur, Nayarit, Chiapas, Nuevo Leon and Tlaxcala.

New projects will directly generate almost 3,000 new jobs and another 13,000 in support areas.

Cancun hopes to build a zoo, not only for tourists, but also for the almost one million people living in the municipality of Benito Juarez, which once was a small port and fishing village.

International Living Magazine Details Top Seven Real Estate Opportunities Worldwide in 2007

BALTIMORE, Feb. 15 /PRNewswire/ -- International Living magazine -- a leading resource for helping people live, travel, and prosper overseas --has released its first annual forecast of the hottest international realestate markets.

The report -- Markets to Watch in 2007 -- focuses on seven emergingreal estate markets that currently enjoy a special combination of economic,political and other factors that give them attractive investment potential.The report details the specifics of the seven markets and how investors canbest seize available opportunities, http://www.internationalliving.com/markets_to_watch.html.

"The price of real estate generally goes up in line with inflation. Butin some pockets of the world, real estate will appreciate at a much faster rate," says International Living's Leif Simon, in the report. "These are usually destinations with unique, good value, limited inventory. Beach, for example, or old -- truly old -- city centers. The less there is of something, the better for whoever owns it." The markets International Living is watching for 2007:

-- Montenegro: A hidden yet spectacular Adriatic gem. Lapped by a glittering sea of translucent aquamarine, this is one of the loveliest countries in Europe -- and one of the most forgotten.

-- Cartagena, Colombia: A walled city in "The Forgotten Caribbean". White-sand beaches, world-class diving and snorkeling, and an ancient walled city crammed full of faithfully restored and well-maintained examples of Spanish colonial architecture.

-- Malaysia: This is Southeast Asia's top retirement haven, which provides a Western-type lifestyle. This underrated destination is also under-priced.

-- Calabria, Italy: A hidden, sun-kissed corner of Europe, it is encircled by clear silver-blue sea on three sides. Despite the region's obvious allure, almost nobody knows about it.

-- Ciudad Vieja, Uruguay: One of the world's top 10 cheapest cities and still undiscovered. The real estate in this city began a renaissance back around 1995, and began to really hit its stride in 2004. The property market in this area is definitely on the move.

-- Honduras Cloud Forest: A mystical cloud forest-hidden in a tropical mountain paradise. In addition to the natural beauty, these mountain forests are just minutes from a charming beachside town with an international airport.

-- Mexico's Flamingo Coast: Dozens of quaint little beach towns, side-by-side. The Flamingo Cost offers warm weather, friendly locals, a safe atmosphere, and great food; what's more, the maddening crowds have not yet arrived.

International Living has an established track record of predicting which international real estate markets are ready to increase in value, but this is the first time the organization has produced a comprehensive forecast report. Some of the real estate markets that International Living has correctly predicted would increase in value include:

-- April 1988 -- Dublin, Ireland
-- March 1989 -- Costa Rica
-- October 1989 -- Tuscany, Italy
-- March 1991 -- Panama
-- November 1993 -- Dordogne, France
-- February 1994 -- Roatan, Honduras
-- November 2002 -- Buenos Aires, Argentina

International Living (http://www.internationalliving.com) -- founded in1979 -- helps people live out their dreams by relocating, traveling, andinvesting overseas. International Living publishes a monthly magazine, a free daily e-letter(http://www.internationalliving.com/e-letter_signup3.html) which is read by more than 420,000 subscribers daily, and several country- specifice-letters. The company is headquartered in Waterford, Ireland, with offices in Baltimore, Md., Panama City, Panama, and Paris and local offices inMexico, Nicaragua, Argentina, Honduras, and Ecuador.

CONTACT: Daniel Lott, Web Marketing Director,dlott@internationalliving.com, 410-895-7917.

2/16/2007

GE Money on track to lend $150 mln in US-Mexico mortgages in 2007


MEXICO CITY (MarketWatch) -- GE Money, the financial services arm of General Electric Co. (GE), expects to lend about $150 million this year to U.S. residents who want mortgages to buy residential property in Mexico, a company official said.

"We closed (last year) with about $60 million of these loans. We are sure that this year we will do two-and-a-half times what we did last year," said Edwin Vega, chief executive of mortgage lender GE Money Credito Hipotecario, in an interview this week.

GE Money is keen to tap what it sees as a potential market worth billions of dollars that until recently has grown with little or no mortgage financing.

U.S. citizens have been purchasing homes in Mexican resort destinations like Los Cabos and retirement centers such as Guadalajara for decades, with home buyers paying in cash or obtaining expensive financing from real-estate developers and niche lenders.

Now large international lenders like GE Money and Spain's second-largest banking group Banco Bilbao Vizcaya Argentaria (BBV) want to leverage their presence in Mexico and the U.S. to bring more financing to this market.

Demographics are working in lenders' favor since about 78 million baby boomers will start retiring in the next decade and some will probably look to Mexico, where property prices haven't reached what some analysts have called stratospheric levels observed in popular retirement destinations in California and Florida.

The privatization of Mexico's airport industry and the emergence of low-cost carriers in recent years have also brought affordable air travel to new areas of the country, especially coastal destinations that are popular with home buyers from the U.S.

"There are a large number of people who are turning to Mexico, which they see as an attractive place to have a vacation home, a weekend house, and a retirement property," Vega said.

GE Money started piloting its "Mexican Dream Mortgage" program in five locations in late 2005, before moving to a full commercial launch the following year. Currently, the program is available in 12 locations, including the Baja California peninsula, Cancun, and the colonial city of San Miguel de Allende.

GE Money offers dollar-denominated adjustable-rate mortgages and fixed-rate mortgages for up to $1.5 million, although the average loan has been around $350,000.

The company's WMC Mortgage unit handles credit scoring and paperwork in the U.S. On the other side of the border GE Money Credito Hipotecario originates the loans, and GE Capital Bank provides the Mexican bank trust for foreigners who want to buy property on the coast or near the border.

During the first half of the year, GE Money plans to expand its product offering with a cash-out refinancing product that will allow citizens from the U.S. who already own property in Mexico to unlock the equity in their homes, and mortgages to buy homes under construction. To date, GE Money has only financed finished apartments and houses.

Mortgage financing will also allow Mexican real-estate developers to move their inventory faster and open up a much larger universe of potential clients.

"The developer collects his money faster and can move on to the next project. We are accelerating the cycle," Vega said.

The executive said the cross-border mortgage market is so new that GE Money and its competitors haven't yet started to fight over clients.

"I think the way things are right now, there is market for everyone. Something we have noticed in the domestic market is that more players in a growing market is good for everyone. It brings legitimacy to the product," Vega said.

American Title Insurance Guards Against Risky Land Deals

Buying property overseas can be risky, but US and Canadians have access to a special service that can guard against loss.

It's called title insurance - a standard item for domestic property purchases for decades, and a growing safety net for people buying second and retirement homes abroad.

Companies like First American Title Insurance Company, Stewart Title and a handful of other North American insurers have a growing network of real estate lawyers and agents abroad who research the chain of ownership of a piece of property a client wants to buy.

First American representative Turalu Brady Murdock, who supervises title research in 35 countries in Latin America and the Caribbean, said her company insures the buyer in American dollars after carrying out a "due diligence" title search. If there are questions about ownership, the company might warn against a purchase or insure at a less-than-absolute level.

"If we say you own it, and it turns out you don't, we have to indemnify you against the loss," she said in a telephone interview. "We're insuring that you own it, no one else has a mortgage on it, and no one else has the right to use it."

If a challenge is made down the road, the company also pays for attorneys to defend ownership. Property buyers pay a one-time fee for title insurance. Typical rates are 1,000 dollars for a 200,000-dollar land purchase in Mexico, or 850 dollars for 150,000-dollar properties elsewhere in Latin America.

The fee goes up accordingly for more expensive properties: a 5-dollar charge is added for each additional 1,000 dollars in property value. Across Latin America, some property is only held on a lease, or possessory title system, and can only be titled to a potential purchaser after the lease expires - a risky enterprise, Brady Murdock said.

Other land might belong to the government but have been occupied by squatters for decades who claim ownership.

And citizens from the US and Canada seem to attract frivolous claims against their newly-acquired property because some locals believe they have deep pockets and will readily settle out of court to avoid hassles, Brady Murdock noted.

With title insurance, however, a lawyer would be engaged to combat such claims - although cases can be tied up for years in the courts.

"Most people are risk takers when they are buying overseas," Brady Murdock said. "I can't imagine buying a piece of property overseas without title insurance."

Symptomatic of the rocketing real estate interest in Latin America, First American only started its foreign business in the 1970s in Mexico. In 1997, as the dot.com sector was thriving and US baby boomers were starting to think about retiring, demand increased exponentially, she said.

That's when the company started developing its network of reliable English-speaking real estate lawyers across Latin America.

From 1998 onwards, First American doubled its foreign title business every year. In 2006, the business nearly tripled at a volume of 160 per cent times the previous year. She declined to estimate actual numbers of purchases pending release of the 2006 annual report.

Brady Murdock noted that it's not just wealthy or baby boomer Americans buying second homes in Latin America.

As land prices have skyrocketed in the US, many young American families with small children are moving south to live for good, doing either home schooling or sending children to local schools.

Many Americans have been starting businesses, or are connecting to businesss at home via the internet. "It's just amazing," she said.

By Pat Reber

2/13/2007

Carlyle Group establishes fund for investments in Mexico

Washington Business Journal - 10:39 AM EST
Monday, February 12, 2007
by Neil Adler
Staff Reporter

The Carlyle Group has raised more than $130 million for an investment fund focused south of the U.S. border.

The D.C.-based private equity firm says its new fund, Carlyle Mexico Partners, has raised $134 million to commit to companies primarily in Carlyle's seven areas of expertise, such as the aerospace, defense, energy, health care, technology, telecommunications and media.

Carlyle Mexico Partners currently has five investment professionals based in Mexico City.

"As we've seen in markets around the globe, Mexico presents an excellent opportunity to combine private equity investments with quality local businesses to create first-class global competitors," says David Rubenstein, a co-founder of Carlyle, in a statement.

Carlyle, which invests in buyouts, venture and growth capital, real estate and leveraged finance, has $54.5 billion under management.

2/12/2007

$1 Billion in Real Estate Planned in Mexico by Related International, Division of The Related Group


Largest Condo Developer in United States Looks to Latin America for Urbanization Projects
MIAMI--(BUSINESS WIRE)--The Related Group, the largest builder of luxury condominiums in the United States, announced today it will invest more than $1 billion in Mexico real estate over the next two years. To drive these efforts, the company has formed a new subsidiary, Related International, dedicated to urbanizing areas in which they develop.

Related International has first set its sights on Puerto Vallarta to develop ICON Vallarta, a luxury condominium situated on five acres of oceanfront with exclusive beach access, and located just minutes from downtown.

Related International plans to erect upscale condominiums and hotels in other tourist locations in Mexico, including Acapulco, Cabo San Lucas, Playa del Carmen and Zihuatanejo. Beyond Mexico, the company is researching Costa Rica, Panama, Colombia, Argentina and Uruguay.

“We’re excited to bring our style of development to Latin America,” said Jorge M. Perez, CEO of the Related Group. “This is not a cookie cutter, throw it up and run venture. We’ll embrace the Latin American culture and develop truly urban landmarks that center upon the arts, history and beauty of the area.”

Just as they did in the U.S., Related International will partner with the best architects, designers and artists to create residential developments built for the way people live today – with functional living spaces and exceptional amenities.

“We’re looking for the gems of Latin America where we can embrace the natural environment and help create a more attractive area through urbanization,” added Roberto S. Rocha, president of Related International.

Construction on the $200 million ICON Vallarta will begin in mid-2007 and includes 343 condominiums ranging from $200,000 to $1 million, a cost value not typically found in the United States or other areas of the world. For the design of ICON Vallarta, Related has chosen the renowned work of Yoo by Philippe Starck in conjunction with the award-winning architectural firm, Arquitectonica, known for innovative contemporary architecture.

Founded by Chairman and CEO Jorge M. Pérez, The Related Group has earned a reputation in the United States for its visionary design and development of luxury condominiums, mixed-use centers and multi-family properties. Since its inception, the privately-held company has built and managed more than 55,000 condominium and apartment residences in major markets throughout Florida.

Ten affordable, under-the-radar Mexican cities and beach towns



The U.S. might share a nearly 2,000-mile border with Mexico, a country almost three times the size of Texas, but most American travelers are familiar with only a handful of its destinations—Cancun, Puerto Vallarta, and other beach towns that cater to Americans.
While a relaxing vacation at a beach resort never hurt anyone, visitors who avoid traveling elsewhere are missing out on some of the best that Mexico has to offer: virgin beaches unspoiled by development, colonial cities that are older and more European than anything in the States, and indigenous cultures that still hold true to ancient traditions. All that, and lower prices, too.

In many colonial cities and small out-of-the-way beach towns, you'll find B&Bs and inns charging as little as $50 a night (or less) and luxurious accommodations in converted haciendas and Spanish estates for less than $150 a night. As for dining and shopping, you'll always find cheaper and more authentic food and handicrafts beyond the big tourist zones.

To experience Mexico outside the resorts you'll need to show a bit of independence and an openness to a less structured style of travel. Driving a rental car down crumbly roads, speaking some basic Spanish, and sharing your room with a lizard or two may be involved. Nevertheless, for the right kind of traveler, these elements are part of the excitement of venturing off the beaten path.

Here's a glimpse at 10 affordable, under-the-radar Mexican cities and beach towns that can be added on to a beach resort vacation or made the focus of a trip.

http://www.smartertravel.com/travel-advice/ten-affordable-under-the-radar-mexican-cities-and-beach-towns.html?id=2309064

Surf’s Up, and Upscale, as Sport Reverses Its Beach Bum Image

For $10,000 a day, you can have the ultimate surfing sojourn in Indonesia aboard the 110-foot Indies Trader IV, a sort of floating hotel with 15 cabins, a helipad and three-course meals with wine. A motorized tender takes you to the waves.

Sandy Huffaker for The New York Times

Liv Galendez learning to surf in California. Catering to wealthier surfers has become a big business.

Or for a daily rate, in addition to the cost of his airfare, Brad Gerlach will give private instruction to select clients anywhere in the world. Mr. Gerlach, who was ranked No. 1 on surfing’s world professional tour during the 1986 and 1991 seasons, termed the cost “not cheap at all.”

Surfing, once the sport of Hawaiian kings, has come full circle. After becoming a counterculture activity for beach bums and bohemians, it has emerged as a status sport, like skiing and golf.

“It’s sort of lost that dirtbag appeal,” said Isabelle Tihanyi, who with her twin, Caroline, started Surf Diva, a school based in La Jolla, Calif., that caters mostly to women, a growing segment of surfers. “Now you see more yuppies in the water with a brand-new board and a brand-new S.U.V. — all the latest technical gear.”

This new species of surfer contributes to a booming market for vacation packages, instruction, equipment and real estate near some of the world’s best surf breaks. Like golf, surfing has become an ideal activity around which to discuss business. Surfers find plenty of time for talk while driving in search of good spots, while changing into and out of wetsuits in the parking lot, and especially while waiting between sets of waves.

“There’s more down time in surfing than any other sport,” said Chris Mauro, the editor of Surfer Magazine.

It was not always this way. “In the 1970s, you would stop at 25 and went to work or you were going straight to loserdom,” Mr. Mauro said. “It used to be a strike against you if you were a surfer.”

In those days, continuing to surf while carrying on a career was a matter best left secret. “If you were a surfer and you wore a suit and tie to work, you tried to hide the fact you surfed,” Mr. Mauro said. “Now, it’s like you’re the star on the company basketball team.”

Todd Juneau, a real estate consultant in San Diego and a longtime surfer, trolls for business in local lineups. “I’ll sit in the water and listen to conversations, and if someone says something about real estate, I’ll find a way to interject,” he said. “And it pays off.

“In San Diego, you never know if the guy next to you could be a multimillionaire, or a judge or an executive, and he’s surfing.”

Dionne Mochon, 32, a prosecutor in San Diego, began taking surf lessons last year. “Surfing has opened so many doors to meet people, network and just enjoy being a woman interacting with other professionals on a social level,” she wrote in a recent e-mail message. “Judges I appear with surf, opposing counsel surf, my colleagues surf, and I made so many friends who surf as well.”

Enrique Huerta, who is known as Moose, said he landed a job in Manhattan’s fashion industry partly because of surfing. A former professional longboarder, Huerta, 28, works in international sales and merchandising for a denim company. He got to know two of the company’s founders during surf sessions off Long Island.

“That was kind of the icebreaker,” Mr. Huerta said.

Jeff Kolodny, a talent agent for the William Morris Agency in Beverly Hills, Calif., said he had seen a surge in interest in surfing at work. Mr. Kolodny began surfing at 12 and worked as an associate editor at Surfing Magazine before joining William Morris, a company with a growing number of surfing devotees.

“Only in the last few years has anyone cared that I’m a surfer,” he said. “Now I’m really popular. People you would never imagine in your life are going to the beach, senior executives at my company.”

It is unclear why surfing has found a broader respectability. Some point to the initial public offering of Quiksilver, the board apparel and accessories company, in 1986 as a catalyst.

Perhaps reflecting surfing’s laid-back roots, concrete figures on participation are hard to come by. Two million people consider themselves active surfers in the United States, twice as many as 20 years ago, according to Action Sports Retailer, the leading board-sports industry trade show. An active surfer is considered someone who goes out at least eight times a year.

Surfing’s popularity has helped drive international real estate sales, with property along remote coastlines being bought and developed into resorts and vacation homes. Parts of Costa Rica are considered so crowded that some surfers have pushed north to Nicaragua. And in Mexico, rumors abound about development in a remote area of Baja California known as Scorpion Bay.

A drive of more than 800 miles from San Diego, Scorpion Bay can be difficult to reach, and it lacks most amenities. Only private airplanes can land there, and those who drive must cover a few hundred miles along dirt roads through the desert. For years, most people stayed at a cold-shower campsite on a rocky bluff above the beach. On their Web site, Scorpionbay.net, the campground’s operators denied that they would sell out.

Surf schools have become another growth industry. San Diego had so many that the city began to regulate them.

Richard Schmidt, a renowned big-wave surfer, started giving lessons part time in 1978, while working as a lifeguard in Santa Cruz, Calif. Six years ago, his surf school began taking clients to Costa Rica during the winter. They stay near the beach in a house where Mr. Schmidt’s wife teaches yoga. They also retain a masseuse.

Sandy Huffaker for The New York Times

Todd Juneau, left, a real estate consultant, and Dave Sims commuting to Pacific Beach in San Diego. Juneau listens in the surf for business talk.

In addition to trips to Costa Rica, Surf Diva holds about 50 corporate clinics a year in Southern California. Packages can include accommodations, transportation, golf and spas.

Many of Surf Diva’s clients are from New York City; they work on Wall Street or in the entertainment or fashion industries. Some stay at La Valencia Hotel in La Jolla, where rooms start at more than $300 a night.

“It’s more than just a vacation,” Isabelle Tihanyi said. “It’s a girls’ adventure trip.”

But for more adventure, surfers can take boat trips to Costa Rica, Nicaragua, Indonesia and East Timor.

“Good surf is predominantly a third-world deal,” said Jake Burton Carpenter, founder and owner of Burton Snowboards. “In surfing, you’re trying to get away from the crowd.”

Mr. Carpenter, 52, whose company bought Channel Islands Surfboards in June, began surfing as an adult and now rides waves an average of 60 days a year. He plans to take a boat trip to the Maldives in the Indian Ocean this summer.

“A big part of what’s happened,” he said, “is that the market has aged, and not in a negative way. I would run into so many people who say, ‘Oh, I used to surf.’ But people are staying with it more. These board sports you can do the rest of your life.”

As a result, high-end boat charters in destinations like Indonesia have begun to serve older, more affluent clients. “With boat trips, it’s an older demographic because these trips are so expensive,” Mr. Carpenter said.

Through SurfAid International, a nonprofit public health organization started in the Mentawai Islands, Indonesia, by a doctor who is also a surfer, Mr. Gerlach met one of his well-heeled clients. That client introduced him to others. They fly him to places like Costa Rica for lessons.
As a surf coach, Mr. Gerlach functions like a golf pro, offering insight on the mechanics of catching and riding waves, and sharing some shortcuts.


“You’ve got to pick the right surfboard for the conditions,” he said. “You wouldn’t want to play 18 holes with a wedge, and you wouldn’t want to play 18 holes with a driver.”

Montauk, a prime East Coast surfing spot at the tip of Long Island, serves as a symbol for the sport’s evolving status.

Last summer, in a dirt parking lot near Ditch Plains, a bottlenecked surf break, Mr. Huerta said he overheard a comment that spoke to the state of surfing today. Through a breeze, he heard a voice say, “I can get service on my Treo at Scorpion Bay.”

Loans and Economic Overviews in Mexico


The law recognises that all legitimate debts are valid obligations of any debtor. The debtor shall fulfill its obligation, using all its assets where necessary.

Securities in México are legislated by the Law of Securities and Credit Operations (Ley de Títulos y Operaciones de Crédito). According to this law securities can be nominatives or to the bearer.

Usually, if debt is incurred in the ordinary course of business, and is not executed in the form of a security ("título de crédito") such as a promissory note, the creditor will need to demand payment through an ordinary commercial procedure. In such procedure, the creditor must prove the existence of the debt and the fact that the debt has matured but has not been paid.

If there is evidence that the debt is secured, the creditor could try an executive commercial procedure before the court. Under this alternative, when the court receives the claim, it not only informs the debtor about the procedure but also requires the debtor to either: (i) make the payment to the court or (ii) immediately produce evidence to the court official that payment has been made.

If the debtor does not do either (i) or (ii), then the assets would be seized by the court to ensure and guarantee that if at the end of the trial the debt has to be honored, the court has enough assets upon which to collect and recover the debt.

In the situation where the debt has been executed in the form of a security the procedure varies, depending on the type of security as follows:

Trust Arrangement – At the time when the debtor incurs the debt, it transfer certain assets to a third party (a trustee), which is usually a bank, with irrevocable instructions. These instructions provide that if payment is not made, the trustee can liquidate the assets and make the payment. This mechanism has proved to be very successful, although there are some precedents, where the courts have issued injunctions to trustee to prevent them form liquidating assets until the court has had time to review the fairness of the arrangement.

Mortgages – There is a separate court procedure for mortgages. The court verifies that the payment is due and authorises the sale of the asset. The sale is made through public auction carried out by the court itself. Payment is made from the proceeds. If proceeds are insufficient to pay the debt, the balance will be an unsecured claim.

Lien – The law allows liens on goods to be created; there are two alternatives:

i) The possession of the goods is transferred from the debtor to a third party, or under certain circumstances, to the creditor. In the event of default, the creditor may ask the court to approve the sale of the goods under lien. In such case, the judge notifies the debtor and gives them a 15 days to show evidence of the payment. If no evidence of payment is produced, the judge will approve the sale of goods. The corresponding consideration or price will be kept under lien until the judge approves the payment.

If the proceeds are insufficient to pay the debt, the balance will be an unsecured claim.

ii) In the case of a grant of a lien without the transfer of goods to either a third party or the creditor, the debtor can continue to enjoy the possession and the use of goods.
The debtor would then be able to continue its business operation, while simultaneously being able to grant a security to its creditor.

Corporate Bankruptcy and liquidation processesAs in many other jurisdictions, informal processes may be negotiated to rescue a company or to liquidate it.

In Mexico, the majority of restructuring processes are actually out of court. Usually, the different interested parties organise themselves into a committee. The committee works among the different creditors in order to effectively negotiate with creditors.

The negotiation attempts to estimate the scenario in which the debtor can recover its financial debt and in which creditors maximise recovery and limit their losses. If the debtor is not financially viable, then the committee may agree to an orderly liquidation.

When an informal process is unsuccessful, the different parties related to the company can initiate a formal procedure. Formal procedure can also be initiated if the financial condition of the debtor has deteriorated significantly.

In May 12, 2000, a new Law on Mercantile Insolvency Proceedings ("LMIP") was issued and published in the official Journal of the Federation, thus becoming effective in May 15, 2000.
The LMIP states a one full process in two main phases:

Conciliation – The first phase provides the basis for the mercantile corporate entity to attempt to reach a restructuring agreement with its creditors. Although any creditor that enters this type of agreement will loose its rights during the insolvency proceedings. The figure of conciliator may disrupt the conciliation phase and commence the bankruptcy/liquidation phase, when no agreement has been reached by both parties.

Conciliation agreements are only effective when approved by the Debtor and more than 50% of the total sum of creditors.

Bankruptcy/liquidation – The second phase provides for the liquidation of the company if it is unable to conclude an agreement with its creditors during the conciliation phase.

Three suppositions have to occur before declaring the bankruptcy, which include that the debtor requests bankruptcy, that the time limit for reaching an agreement in the conciliation phase has past and that the Conciliator requests for bankruptcy after considering that no agreement will be reached.

When bankruptcy is declared, management will be taken by a trustee-in-bankruptcy and a Judge will make orders to occupy property and business. The Conciliator, when authorised by the Federal Institute of Specialist in Mercantile Procedures, can act as the trustee-in-bankruptcy.

The liquidation must be agreed with the company’s creditors and all the liquidators actions would be coordinated by a creditor’s committee. The liquidation actions and transactions should be approved by the creditor’s committee but also by the liquidators appointed by the company’s shareholders. In some cases approval from the shareholders must also be obtained.

If the liquidators are actually trustees appointed by the court and are acting in a formal procedure, the liquidation has to be approved by the court. The trustee must submit details of the sale of goods, the condition of the assets still owned by the company and the relation of those creditors who will receive payments. This report has to be presented to the court at least every two months. Key players in an insolvency procedureThe key players and their responsibilities are as follows:

Visitor: Which once an action for mercantile insolvency has taken place will be designated by the Institute when requested by a judge.

Conciliator: Once a sentence has been issued regarding an insolvency procedure the judge will request from the Institute to designate a Conciliator to be in charge of the Company’s management and recognition of unidentified creditors. Another task of the Conciliator will be to rearrange options for a new agreement.

Trustee-in-bankruptcy: Once a bankruptcy is declared the judge will request the Institute to designate a Trustee or confirm the Conciliator as trustee-in-bankruptcy for the Company’s appraisal and sale of assets.


Interveners: This is designated by the creditors to supervise the conciliator and the trustee.
Hierarchy in the payment of creditsCreditors are paid over any other credits when:
Are part of the credits listed in the article 123 paragraph A, section XXIII of the Mexico’s Political Constitution

Credits incurred during the control of the conciliator with previous authorisation
Credits used for the protection of the properties
For the paying of Inspector’s fees and credits resulting from judicial proceedings for the benefit of the Company in control of a Conciliator

The rest of the credits are paid in the following order:

Creditors used for funeral or illness expenses

Creditors with warranties or pledges

Special privilege creditors

All other creditors not mentioned above

Information for bankruptcy/liquidation process

Information available in a corporate bankruptcy/liquidation, formal or informal rescue includes the financial statements for the last 3 years, memorandum of events that caused breach between creditors and the debtor, a schedule of the Company’s debtors and a inventory of all the Company’s assets.

Insolvency procedures in foreign jurisdictionsIn the case that insolvency procedures are started in another jurisdiction, a Mexican court will recognise the effect of any proceeding initiated in a foreign jurisdiction, if such foreign jurisdiction recognises the procedures initiated in Mexico. The foreign court or the foreign trustee of the foreign proceedings should request recognition and assistance from the Mexican courts in any proceeding.

Perspectives

In 2004, the Mexican economy grew a 4.4% as result of greater demand. The outlook for the following year is similar with an estimated 4.0% growth derived from the economic activity driven by consumption, investment and a moderate behaviour of exports. Exports would be affected from the USA expected slim economic slowdown during 2005. The Mexican economic growth would be based in accessible international financing, income from oil exports and family remittance, thus providing some resources to support the aggregate expending. It is important to acknowledge that the growth would be limited until the structural reforms take place.

However, in the short term analyst do not see any important reform to take place as the current political interests are focus in the 2006 elections. The Mexican economy is closely related to the USA economy. Mexican inflation is expected to be stable; however, not at the 3% yearly goal due to the fact that the USA Federal Reserve will continue increasing its interest rates, thus increasing the inflationary pressures to the Mexican economy. Other factors to consider are those within the Mexican economy such as the price of goods and services. The prices of goods are expected to remain stable. However, the prices of services are expected to increase as some of them have fall behind in the last couple of years, therefore increasing inflationary pressures. The exchange rate is expected to remain stable with a light depreciation to a real level. The strength of the Peso is based by oil exports and remittance Mexicans working in the USA.

Another factor that would contribute to the peso stability is the devaluation of the dollar against other currencies.An important factor to consider is the elections campaign. Analysts do not expect great changes in the Mexican economy over the following months since the early campaigns would lessen the uncertainty of the candidates contending. Unfortunately, the uncertainty would increase as the July 2006 elections get closer and the candidate of each party is defined.

2/09/2007

DESTINATION MEXIC0



Staying ahead of the crowd on the Nayarit coast
Keep heading north of Puerto Vallarta to find tranquil towns

Christine Delsol, Chronicle Staff Writer
Sunday, February 4, 2007


(02-04) 04:00 PST San Francisco, Mexico -- By the time I got to Sayulita, on the Pacific coast north of Puerto Vallarta, it was almost too late. San Pancho was the new Sayulita, and Lo de Marco, a few miles farther north, stood ready to become the next San Pancho.

Confused yet? It's all part of the effort by Margaritaville seekers to stay one step ahead of the new mega-resort rising on the beach in the state of Nayarit, which Mexico intends to transform into the next Cancún. As hotels rise and bulldozers rumble across the dunes, barefoot travelers whose taste runs more to fish tacos and hammocks are migrating to villages farther and farther up the coast.

To achieve Margaritaville status, a place must be relaxing but in some way stimulating; unspoiled yet equipped with good restaurants and comfortable digs; within reach of the city's boutiques, supermarkets, clubs and ATMs, but at a safe remove from the northward march of gated resorts and luxury villas.

By all accounts, Sayulita possesses the requisite qualities. It has built up a fanatic following, as evidenced by the cries of alarm provoked by last year's announcement that the Mexican government tourist development agency was building infrastructure for its next project, on the coast about 15 minutes south of Sayulita (see sidebar, Page G8). Veteran visitors were dismayed to learn the golf courses and lavish hotels they'd been trying to avoid were following them along the coast.

By the time my sister, Diane, and I arrived last fall, U.S.-level prices in Sayulita were crowding out the bargains. Condos and villas boasting infinity pools and New York loft decor were stacking up in the hills on the edge of town. It was still picturesque and mostly authentic, and it still had gnarly surf breaks -- only now it had more lodging choices, more shopping, more English-speaking locals. Comfort had overtaken discovery.

A model village

Descriptions of San Francisco, popularly known as San Pancho (just as we know revolutionary general Francisco Villa as "Pancho"), sound much like the earlier reports from Sayulita: a small, clean village surrounded by jungle and mountains that wears its traditions on its sleeve. But it also has watercolor sunsets, a sea turtle nesting ground and possibly the best surfing on Mexico's west coast. So we took the exit north of Sayulita on Highway 200 and bumped into town in the dark of night.

Despite the old-fashioned cobblestone that rattled our teeth, San Pancho has been a town only since the 1970s, when the fishing settlement consisting of maybe four extended families captured the fancy of then president Luis Echeverría. Echeverría swooped in by helicopter once a week or so to drink coffee and eat homemade tortillas with fishermen and farmers, eventually building a beachfront palace on the edge of today's town.

The president began creating a self-sufficient model village. Workers lured by promises of land and a home laid the cobblestone, plumbing and electrical systems. They built houses, a church and plaza, schools and a hospital. They planted orchards and built factories to process the fruit.
Instead of garnering accolades for his efforts, Echeverría ended up fleeing Mexico to avoid prosecution for the killings of student demonstrators in 1968 and 1971. San Pancho had to take command of its own fate, subsisting on mango processing until North American tourists and expatriates started arriving in the mid-1990s.

At the turn of the millennium San Pancho's only hotel was the Costa Azul, an "adventure resort," started by a surfer in 1991, which offers guided kayaking, biking, surfing, snorkeling and horseback trips on the beach and in the jungle. Today, rental bungalows proliferate, and one of Pacific Mexico's top-rated bed and breakfasts commands a hillside perch at the jungle's doorstep, just beyond the Costa Azul.

Languid pleasures

Hotel Cielo Rojo, where we stayed, is a happy combination of comfort and economy. Recently renovated after acquiring new owners, it sports spare yet artful design with gleaming white walls, terra cotta floors, generous wooden shelves and painted bathroom tiles. A quirky collection of antique fixtures and artwork includes a headless, life-size padre at the patio doorway. Rooms are not air conditioned, but the ceiling fans acquitted themselves well during late October days that refused to surrender the mugginess of summer.

We fell into a languid routine: breakfast in the palm-shaded courtyard; a walk around town to stock up on water, snacks and sundries; then lunch under a palapa at Las Palmas, where the main street's cobblestones disappear into sand.

Lunch pretty much finished off the day, invariably turning into hours of gossip and philosophy with other travelers and locals, broken up by dips in the ocean or walks to the end of the long, uncrowded, white-sand beach. For intermission, the lemon-yellow Vallarta Adventures jungle buggies rolled up in mid-afternoon, disgorging an unpredictable assortment of jeep safari passengers to storm the bathrooms, tank up on beer and splash in the waves.

For a small pueblo, San Pancho has a wealth of fine restaurants. La Ola Rica, started several years ago by two local women, opened for the season on our last night in town. Diane ate the justly famous carne asada and I had chicken flavored with lime, in the midst of a celebratory fervor usually seen only on New Year's Eve.

None of our full-service dinners was more satisfying than the fare at the taco stand that sprung up each night on our street corner. The slender, serious-looking young man who welcomed us to "Tacos Miguelito" filled soft tortillas with succulent pork shaved from a spit and strips of beef from a grill the size of a foosball table. The burst of flavor made our eyes roll back, and the tab on our most gluttonous visit came to less than $3 each, including soda.

From restful to raucous

The routine left plenty of room for improvisation, which allowed us to scout a Margaritaville-in-waiting as well as sample Nayarit's exclusive side.

Edson, our solicitous young waiter at Las Palmas, was one of the few Mexicans we met in town whose English was better than my Spanish. He had lived in Guadalajara, Seattle, New Mexico and, more recently, Los Cabos before returning to San Pancho to get away from "too many people, too many cars, too much stress."

Edson persuaded us to explore Lo de Marco, touting its creamy white beach, pretty town plaza and dearth of tourists. Venturing another highway exit north, we walked a pristine beach even longer than San Pancho's, waded in the surf and gathered coconuts shed by a line of palms that separate private homes and rental bungalows from the sand. At the plaza end of the beach, children body surfed under parents' watchful eyes. We didn't see a gringo all morning, and though there were fewer restaurants than in San Pancho, we easily found a palapa and took up residence.

We also felt duty-bound to spend an evening in Puerto Vallarta. Despite the persistent myth that San Pancho is 30 minutes from the city, it took us closer to an hour to drive each way. Still, we were early enough to sneak in without dinner reservations at Trio, an enduring downtown favorite with a Mediterranean-influenced menu and strolling musicians. Dinner was as fabulous as the setting, and it was the first time I've had an artichoke (as an appetizer with cheese, red pepper and arugula) in Mexico.

After dinner, we joined the throngs of families, couples, musicians, street performers, artists and thrill-seekers lining up to ride a carnival bungee swing on the malecón, or seafront. Across the traffic-choked boulevard, hawkers flung pitches at us from the doorways of shops open late. An illuminated elephant figure topped one tall building; bars and discos opened their jungle and spaceport themes to the street, looking like the dark rides at Disneyland. The whole scene, in fact, felt as surreal as Downtown Disney.

It was loads of fun -- and it sucked the Margaritaville right out of us. Jouncing down our cobblestoned main street was relaxing by comparison.

Living the luxe life

To wallow in luxury -- the air-conditioned, swim-up bar kind of luxury -- we spent our last two nights in San Pancho at Casa Obelisco. Built in 1999 by two U.S. couples in Mediterranean villa style, it sits on a hillside north of the Costa Azul resort. It has a footpath to the beach and lies a few steps from the jungle.

Opulence was addictive. One day, we donned skirts and drove to Punta Mita, the peninsula at the northern tip of the Bay of Banderas, between Puerto Vallarta and Sayulita. Sign after sign hawking existing and planned luxury developments interrupted the verdant, rolling landscape. I wondered why the alarm went out only after the federal tourism agency announced its intentions, considering that Punta Mita, which dwarfs Litibú, has been taking shape right next door since the late 1990s.

So far, Punta Mita's queen bee is the Four Seasons (with Jack Nicklaus Signature Golf Course; rooms from $545 per night), the only hotel among multimillion-dollar private villas and condominiums. The St. Regis will join the party as early as this December, followed by La Solana Resort, a Four Seasons sibling. A second Nicklaus golf course is under construction.

Slightly stupefied by the groomed perfection around us, we almost missed the plain brown gate simply marked "Punta Mita." After we asked the gatekeepers to make us lunch reservations at the Four Seasons, the gate opened to allow us to drive through more green and blue splendor to the hotel's portico.

The two valets allowed us a few minutes to gawk at the lobby's dizzying view of palapa umbrellas, flowering vines and endless blue water, then installed us in an electric cart for a narrated drive down to the open-air restaurant. We shared an appetizer, a salad and a grilled vegetable pizza and considered it $54 well spent. After all, the surroundings were sublime, the restroom provided linen towels and we'd been Very Important People for a couple of hours.

We asked if we could walk, rather than ride, back uphill. As the cart sped away, our escort accompanied us up the path, gently steering us away from the pool and lounge area we were desperate to see. He sounded genuinely apologetic when he explained the hotel's commitment to guests' privacy.

Locals appeared less distressed than visitors by development plans. Merchants hold out hope of increased business. Bill Kirkwood, one of Casa Obelisco's owners, said he thought Litibú might even benefit the more modest lodgings in the area.

"People who visit places like Four Seasons and Litibú will eventually want to get out of the manicured environment and explore," he said. "They want to find out about places like San Pancho."

On our last day in town, a new sign materialized on the beach at Las Palmas, reading "Surf boards for rent." An arrow pointed to two surfboards planted upright in the sand. When Edson came to take our orders, he admitted to being the entrepreneur.

"We don't have anyone giving lessons in San Pancho," he said, "but people should know they don't have to go to Sayulita to surf."

It was another step on San Pancho's road to becoming the next Sayulita. I thought of the half-finished houses between the Se Vende ("For sale") signs nailed to trees in the jungle, and the private golf course and villas going up across from the Costa Azul on Echeverría's old estate.
Lo de Marco was looking better and better for the next trip. And from there, the reconnaissance run to Rincón de Guayabitos is only a 10-minute drive north.

If you go

All locations are in Mexico's Nayarit state. Prices are in U.S. dollars unless noted.

Getting there

San Francisco, known as San Pancho, is 25 miles, or about 45 minutes, north of Puerto Vallarta's airport on coastal Highway 200. Taxis from the airport cost about $50 to $80.

Where to eat

Taco stands tend to be good. Restaurants we tried included:
La Ola Rica, Tercer Mundo, San Francisco. Entrees, 80-185 pesos (about $7.25-$17 US).
Mar Plata, Tercer Mundo, San Francisco. New restaurant with a Belgian chef. Entrees, $16-$22.
Las Palmas, Tercer Mundo at the beach, San Francisco. Lunch for two, 130 pesos ($11.80).
Trio Restaurant Bar Cafe, Guerrero No. 264, Puerto Vallarta. Entrees, 160-295 pesos ($14.50-$27).
For more information
Sayulita Life, (541) 359-1945 (U.S. number), http://www.sayulitalife.com/.

Moon Handbooks Puerto Vallarta, by Bruce Whipperman, has more detail on Nayarit's coastal villages than most guides.

The online guide http://www.sanpancho.com/ is in "under construction" limbo but was helpful in its previous incarnation.

To comment, e-mail Deputy Travel Editor Christine Delsol at travel@sfchronicle.com.