Mexico's New Housing Dream: Loreto Bay
 Jim Atkinson - NYTimes
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| | Too narrow for cars, the flagstone streets of Loreto Bay Resort encourage walking. (Adriana Zehbrauskas/New York Times) | | |
The 8,000 acres of the Loreto Bay Resort on Baja California snuggle on flat, hard desert between the craggy Giganta range and the glassy Sea of Cortez. The most basic elements of nature — sun and water, rock and sand, the vertical and the horizontal — collide with that particular grace that only nature can produce.
From a footbridge that arcs over a green estuary leading from the bay into the development, there's a view of the resort taking shape on this once-isolated spot: a 150-room hotel with a beachside cafe and gardens; 240 two-story adobe houses with cupolas; some homes painted bright blue or yellow, others muted pink and beige or green; another 300 houses and condos in varying stages of construction.
But this is only a beginning. If the vision of the Mexican government and an American developer is realized, a decade from now Loreto Bay will include 6,000 homes, from small condos to 3,800-square-foot custom houses, most of them probably to be owned by American retirees or part-time residents. They will be formed into six groups called villages, themselves made up of clusters of five and six homes, each with its own small communal green space.
In the best tradition of the new urbanism, residents will travel about their villages on foot, by bicycle or in electric-powered golf carts, moving over flagstone streets purposely made too narrow for automobiles. They will have three golf courses, beach and tennis clubs and a marina at their disposal, with whale watching and other ecotourism just a boat ride away. And everything will be built to the highest standards of environmental sustainability. The master plan includes not only solar-heated water, but also a seawater desalination plant and a 500-acre wind farm.
The goals are so ambitious that it's impossible not to ask whether it can even work. But some buyers are not waiting for a consensus.
"I came down for a weekend visit in 2005 after hearing about it," Brian Durnian, 45, himself a real estate broker in Napa Valley in California, said one day this winter as he sat in the living room of his 2,200-square-foot, neo-Spanish Colonial second home at Loreto Bay. Los Cabos, the hyper-popular resort area at the tip of Baja that he had been frequenting, had become overwhelming.
One look at the house he could have here, Durnian said, and "I was down for it." His brother wanted to buy one, too, and he suggested, "Let's buy a bigger one together."
So, with his brother, Durnian bought a large lot and had a three-bedroom, two-bathroom adobe house with roof terrace and cupola built for roughly $400,000. He hasn't looked back.
He likes the style of Loreto Bay homes, which range from $1.5 million custom houses to entry-level one-bedroom casitas at around $350,000. All are uniformly airy and bright, with rooftop terraces facing the ocean or the mountains, finished out with tile flooring, granite countertops in the kitchens and marbleized bathrooms. And he likes the neighbors. "There's always a party at someone's place," he said.
Durnian has joined about a million Americans who now own property in Mexico for investment or for personal use. There was a time when it was an iffy business: public safety and health were questionable; titles to land sometimes unreliable. Now, with Mexico's leaders placing a premium on attracting foreign buyers, regulation is better, and there are reliable agents, title searches and insurance. Financing is available through American lending giants such as GE Capital and Citigroup, whose property arm is the majority owner of the Loreto Bay Resort.
Owning property in Mexico still has its quirks — especially in coastal and border areas — though Loreto has somewhat smoothed the requirement that foreigners buy through a bank trust that technically holds title. Buyers deal directly with the developer.
Loreto has a long and twisty history. It was identified by the Mexican tourism agency in the 1970s as a target for development, along with Los Cabos, Ixtapa, Cancún and Huatulco. All were to get special attention as tourist venues. In Loreto, the results were incomplete. The government put about $200 million into roads, water, sewers, electricity and a small airport, then promptly seemed to forget about the area as Los Cabos and Cancún began to blossom.
Loreto remained almost orphaned, known mostly to ecotourists (the waters off its coast are a marine preserve) and to a few travelers who came for its beach and the charming village of Loreto. Then in 2000, a Canadian new-urbanist developer, David Butterfield, was invited to take a look. He immediately saw the potential: With the infrastructure already in place, the large, sustainable community of as many as 15,000 transient residents that the Mexican government desired could definitely be created.
Butterfield and a partner, the Phoenix developer Jim Grogan, had a master plan drawn up by Duany Plater-Zyberk, the architectural firm that designed Seaside, Fla. Butterfield and Grogan eventually bowed out, ceding control to an early investor, Citigroup Property Investors, which has the capital needed for such a large project. Although major elements such as the wind farm and desalination plant have so far not materialized, Citigroup insists that the environmental commitment remains.
For some shoppers, accessibility is a problem; Loreto is 700 miles south of San Diego via mainly two-lane roads. But air service has improved, now including flights on Alaska Airlines through Los Angeles, on Continental from Houston, and on Aero California and Aeromexico from Los Angeles, San Diego and Phoenix.
About 800 lots have sold so far. Many who buy are drawn to the focus on environment and sustainability. And pricey as it seems, many also find Loreto a bargain.
Jon Clark, 55, bought a 3,800-square-foot penthouse condo for $625,000 in 2004. "A comparable property in Cabo would cost well over $2.5 million," said the executive with Prudential California Realty in San Diego. And there's a bonus: Mexican property taxes run about a tenth of those in the United States. |
Vallarta Weddings
Puerto Vallarta Real Estate | March 2008 
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