issues with development in Loreto

this is an older article but the points are still salient. It deals with part of the issues that are going to be problems for the future of Loreto.

article
A new day dawns in sleepy Loreto

Big development plans in Baja town are raising many questions

By Sandra Dibble
STAFF WRITER

December 28, 2005

LORETO, Mexico – With its rugged mountains, uninhabited islands and vast marine park, this seaside town of 15,000 people offers some of the most dramatic scenery on Baja California – above water and below. Yet for years, tourists and developers have largely overlooked Loreto and headed to the peninsula's booming southern end.


CHARLIE NEUMAN / Union-Tribune
A tranquil evening found Loreto native Juan Rubio Higuera on the town's waterfront. Long a quiet outpost, Loreto is poised for major changes as developers and the Mexican government promote the region as a tourism center.
Now slow-paced Loreto has been discovered. Flocks of U.S. and Canadian tourists fly down to inspect their future vacation homes. Workers from Mexico's interior arrive in search of jobs. Mexican government planners envision a rapidly increasing population, and academics on both sides of the border question the implications of such growth.

A fierce debate flares over the future of Loreto, located on the Gulf of California and in a desert region with scarce water resources and few job opportunities. The debate is likely to spread as stretches of sparsely populated coastline that were long off-limits to development are increasingly up for sale.

"The things that are going on in Loreto are the same that are going up and down Baja California," said Robert Faris, a development economist from Harvard University who has studied the town. "The demand for housing by North Americans is going to set off a remarkable change in land-use practices in Baja."

In Loreto, many questions loom: Is there enough water to support large-scale growth? How can Loreto grow without destroying its most precious resources – the wealth of its sea life, its rich cultural and historic legacy, the small-town tranquillity? Who should benefit from growth?


Loreto's residents still wake up to crowing roosters and barking dogs. Afternoon winds blowing in from Loreto Bay rustle through palm trees, and on Saturday nights, couples and young families promenade up and down the small sea wall, or malecón. But for many here, sweeping vistas and sleepy charms go only so far.

"Loreto is a small town, very pretty, the prettiest in Baja California Sur," said Mayor Rodolfo Davis. "But today, if somebody has a heart problem, they have to pay a fortune to fly to La Paz. Those who can't afford it take a four-hour ambulance ride, and some end up dying before they've gone 100 kilometers."

The future of a community this size rarely resonates much beyond its boundaries, but Loreto's potential as a major tourist destination has brought some unusual attention. Civic and business groups such as Loreto 2025, the Loreto Hotel Owners Association and the Grupo Ecologista Antares are increasingly speaking out as the city government prepares to make some key decisions on the town's future.

The issues have come into sharp focus as Loreto for the first time considers a master plan regulating growth. Since it was incorporated in 1991, the town has not had a such plan or the resources to pay for one. Fonatur, Mexico's tourism development agency, stepped in, hiring a consultant to write a plan that by 2025 envisions 13,000 rooms – in hotels, time-shares, condominiums and condo-hotels – and 126,000 full-time residents.

"This would be huge growth," said Paul Ganster, head of the Institute for Regional Studies of the Californias at San Diego State University. The plan "looks very much like Cancun or Los Cabos, which strings out development along the coast."

Victor Castorena, an economist and Loreto native in charge of an advisory committee evaluating the Fonatur-sponsored plan, is a staunch supporter of growth.

"Loreto needs to grow, Mexico needs to grow," he said. "Young people from Loreto leave to study, and they don't come back because there are no jobs."

The committee's final recommendation is expected early next year, but the final decision will be taken by the city council.

To the north, along the U.S. border, the coastal corridor between Tijuana and Ensenada is booming with developments aimed at U.S. tourists. About 300 miles south of Loreto, at Los Cabos, upscale resorts have brought unprecedented economic growth – but also strings of unplanned shantytowns.


CHARLIE NEUMAN / Union-Tribune
A group of U.S. and Canadian purchasers inspected their future homes during a recent weekend presentation in the Villages of Loreto Bay, a planned community that an Arizona-based developer hopes will eventually grow to 6,000 homes south of town.
By contrast, Loreto has been relatively untouched, and one common explanation is that the region's typically grayish, rocky beaches cannot compete with Los Cabos' broad stretches of soft white sand. Loreto's appeal in recent years has been more for sport fishermen, divers and snorkelers and eco-tourists drawn by the Loreto Bay National Park, the largest marine protected area in Mexico.

Some would just as soon keep it that way. Among them Rodolfo Palacios, a diver who runs Loreto's Budget Rent-a-Car agency. He moved here from Los Cabos 14 years ago.

"We're all friends, we all know each other, we know our friends' children, that's what I love about Loreto," said Palacios, a member of Loreto 2025, which is seeking to cap growth at 60,000 people. "Tourists and locals share the same beaches. You don't have the servility that you see in Cabo San Lucas, that the beaches are for tourists and no one else."

Magnet for Americans

The catalyst for change has been the arrival three years ago of an Arizona-based developer who is planning 6,000 homes, the Villages of Loreto Bay, south of town in the community of Nopoló. The market base is made up primarily of U.S. and Canadian tourists interested in purchasing second homes. More than 500 have bought, and the units are under construction. Those not ready to live here full time can place their units in a rental pool managed by the developer.
As elsewhere on the peninsula, a major issue in Loreto is water. The last study by Mexico's National Water Commission is almost 20 years old, and new numbers won't be available until the commission undertakes a study next year.


CHARLIE NEUMAN / Union-Tribune
Fishermen unloaded the catch of the day near Loreto's town center. Some experts fear poorly planned growth will strain the region's natural resources, but many residents hope development will bring jobs.
But even with water conservation and steps to channel more rainfall into aquifers, "we are very aware that this quantity of water is not enough for 125,000 residents," said Roberto Sención, an official in the water commission's groundwater division in Mexico City. "Desalination will have to be the next option."

A study commissioned by the San Diego-based International Community Foundation echoes that assessment, stating that desalination is "the only apparent option" if the town is to grow beyond 30,000 people.

But desalination could lead to "potential damage to marine ecosystems," and requires large investments in electric power. The potential for power failures make desalination a risky primary source of water, said Thomas Maddock, a hydrologist from the University of Arizona who looked at Loreto's water supply as part of the study.

Released last month, the $321,000 Loreto Alternative Futures Study also considers social and economic questions. The study looks at 25 alternative futures for Loreto, examining five population growth scenarios – from 30,000 to 240,000 by 2025 under five different planning approaches. The report's authors include scholars from Harvard, University of Arizona, SDSU and the Autonomous University of Baja California Sur.

The study "forces people in a community like Loreto to start asking tough questions about water today, before they run out," said foundation president Richard Kiy. "What plays out in Loreto is going to be the tip of the iceberg."

Founded in 1697 as a Jesuit mission, Loreto served for more than a century as the Spanish colonial capital of the Californias. Through much of the 20th century, it was a sleepy fishing village, emerging as a tourist destination with the opening of the transpeninsular highway in 1973.


CHARLIE NEUMAN / Union-Tribune
"What we need most is drainage," said Imelda Avila Arce, 27, who lives in Colonia Miramar, a working-class Loreto neighborhood rarely visited by tourists. Her husband earns less than $70 a week at his hotel job.
Mexico's tourism development agency, Fonatur, began focusing on Loreto during the 1970s. The agency identified Loreto as a potential center with major tourism potential – along with Cancun, Ixtapa, Huatulco and San José del Cabo.

Beginning in the late 1970s, the agency invested about $200 million in Loreto. It paved roads, built a recreational port, developed drinking water and sewage treatment systems, expanded the airport. But a key private investor went bankrupt, and major developers headed to Los Cabos, leaving ghostly streets and shells of buildings. It wasn't until nearly two decades later, under President Vicente Fox, that Fonatur renewed its interest in Loreto.

Deep involvement

To this day, the agency runs Loreto's main aqueduct, operates the sewage treatment system and owns 12 square kilometers of prime beachfront property. With development now taking off, the agency's involvement is getting stronger.
"If you wanted to know what this would be like without Fonatur, go and look at the small towns up and down the peninsula," said Peter Maxwell, Fonatur's man in Loreto. But critics point to Fonatur projects such as Los Cabos and Cancun, where social and environmental problems have marred the resorts' economic success.

Just south of Loreto at Puerto Escondido, Fonatur is putting the finishing touches on an anchorage and marina that will be the centerpiece of the Proyecto Mar de Cortés, a plan to draw boaters to the region through 28 linked ports. Maxwell said Fonatur is also negotiating with developers for two projects that could add as many as 14,000 more units.

"I think the whole Baja California peninsula is the new megadestination for Mexico," Maxwell said. "Because of the beauty of the area, the weather. It's so close to the States, and the prices are still very reasonable. Here the whole challenge is how we get the best of tourism without the worst of tourism."

Loreto Bay Co., the Scottsdale, Ariz., developer that signed an agreement with Fonatur three years ago, promises the best of tourism. The company chairman says its walkable beach-side communities at Nopoló will be environmentally friendly. Units range from $225,000 to more than $2 million.


CHARLIE NEUMAN / Union-Tribune
Morgan Hill resident Laura Lundy joins daughter-in-law Cynthia Lundy and grandson Maverick in touring the Villages of Loreto Bay. The project draws its water from a local aquifer, but as the region grows, desalination will become crucial.
"There is smart growth, and there is dumb growth," said Loreto Bay chairman David Butterfield. "If it's done responsibly, ecologically, with care about social impacts, that's a completely different scenario than if it's done like Los Cabos."

The company has set up the Loreto Bay Foundation, pledging 1 percent of its sales for conservation of the marine park and economic development in Loreto, and have disbursed $64,350. The developers have taken care to restore native habitats, work closely with archaeology authorities and recycle construction waste, and are developing a wind energy project. They have committed $800,000 to help build a hospital in Loreto.

Butterfield said his development's goal is to "provide more potable water than we consume" through desalination or replenishing programs for aquifers. But the company does not yet have a desalination project, and for now is getting water like everybody else – drawing from the aquifer.

As growing numbers invest in new homes, uncomfortable economic disparities have surfaced: Many workers brought up by contractors from other parts of Mexico to build Loreto Bay are packed into makeshift dormitories with few sanitary facilities. Some have begun complaining publicly that they were lured with false assurances of high pay, only to be disappointed.

"They told us we'd get 3,000 pesos (about $285) a week, but they're paying less than 1,500 ($141)," said Constanto Reyes, who traveled with his two sons from Mexico City. As a skilled laborer, Reyes said he can earn close to $130 a week when he can find work in Mexico City.


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Yvo Arias, a Loreto-born architect and member of the master plan advisory committee, says those who oppose growth are wrong – but he also opposes the current proposal, saying the main beneficiary of the proposed land use changes is Fonatur itself.
"What they've done is design a suit that fits Fonatur and the Villages of Loreto Bay," said Arias. "Why just them? Why don't they give the rest of us a chance to grow?"

Stop some Loreto residents and it's unlikely they have even heard about the master plan. But they will have an opinion about what the town needs. Jobs, said Mario Castro Martínez, 24, diving for clams on a Sunday morning. A bigger marina, said Joel Davis Meza, 55, a fisherman. Paved streets and sewers, said housewife Imelda Avila Arce, 27, from the front stoop of her house in Colonia Miramar, a semi-developed shantytown.

On a warm November afternoon, two guests swung from hammocks at the Hotel Oasis, engrossed in their English-language novels. Yards away, owner Pascal Pellegrini, a native of Italy who married a Loretana, sipped coffee and considered the future for his adopted hometown.

"Growth is necessary, we've been blocked for 30 years, and we now have a grand and historic opportunity before us," Pellegrini said. "But this growth has to benefit the people of Loreto."

GOOD NEWS! (not!)

a friend sent this to me recently:

New York Times article LORETO BAY

i'll paste the whole article below in case the link needs a password after awhile

so feel free to read it and then i'll come back in with another post explaining how the whole "eco" thing is a steaming pile of bullsh*t and how things are not so rosy for the actual locals who live in LORETO which is a different community altogether than the little resort town of LORETO BAY that is a few kilometers south of LORETO.

Mexico’s New Frontier

Adriana Zehbrauskas for The New York Times
SUN KISSED Many Americans are heading for Loreto Bay, a resort community that’s planning a total of 6,000 residences in the desert of Baja California.


By JIM ATKINSON
Published: March 7, 2008
THE 8,000 acres of the Loreto Bay Resort on Baja California snuggle on flat, hard desert between the charismatically craggy Giganta range and the spookily 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 gently arcs over a deep green estuary leading from the bay into the development, there’s a good 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 eco-tourism 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 hot water, but a seawater desalination plant and a 500-acre wind farm.

The goals are so monumentally ambitious that it’s impossible not to ask whether it can even work. But some buyers are not waiting for a consensus. They’re grabbing Loreto Bay homes now.

“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. “There was nothing here except for the model homes. But I saw the mountains and the ocean. I like to kayak, golf, hike.” And 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, Mr. 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, Mr. Durnian bought a large lot; had a three-bedroom, two-bathroom adobe with roof terrace and cupola built on it for roughly $400,000; and 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 uniformly airy and bright, with rooftop terraces facing the ocean or the mountains (in some cases, both), finished out with tile flooring, granite countertops in the kitchens and marbleized bathrooms. And he likes the neighbors, who are often free spirits with an easygoing sense of community. “There’s always a party at someone’s place,” he said.

Mr. Durnian has joined about a million Americans who now own property in Mexico, whether for investment or, more commonly, for personal use. There was a time when it was 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 like GE Capital and Citigroup — whose property arm, is, in fact, 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. It has established an overarching trust relationship with a bank, allowing buyers to 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’s case, 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 (including Cabo San Lucas) and Cancún began to blossom.

For years after that, Loreto remained almost orphaned, known mostly to dedicated eco-tourists (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 nearby. Then in 2000, a Canadian new urbanist developer, David Butterfield, was invited to take a look at Loreto. 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.

Mexican tourism officials wanted to do something original at Loreto, according to Karina Carretero, a spokeswoman for Loreto Bay Resort — something different from the high-rises of Cancún and more in keeping with the area’s fragile ecology. As the founder of the Trust for Sustainable Development, a nonprofit corporation dedicated to building environmentally friendly, sustainable communities, Mr. Butterfield had already displayed the ability to build green, notably at Shoal Point, a residential and retail development on the harbor in Victoria, British Columbia, and at Civano, a development of housing, commercial space, offices and schools in Tucson.

Mr. 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. After quickly selling a couple of hundred lots and seeing some villas to completion, Mr. Butterfield and Mr. 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 like the wind farm and desalination plant have so far not materialized, Citigroup insists that the environmental commitment remains.

Mexico’s New Frontier

Published: March 7, 2008
(Page 2 of 2)

As was its designers’ wish, Loreto is best understood on foot. On a long, meandering walk one morning, I was able to note many of the elements of Mr. Butterfield’s vision. No matter where you are standing, you can see either the sea or the Sierra de la Giganta; nature always feels close by. Landscaping consists of indigenous trees, shrubs, cactus and grass that are resistant to salt, don’t need much water and can survive nicely on recycled waste water. All lighting is compact fluorescent. Even the building blocks fit the vision: they’re a combination of concrete and recycled Styrofoam.

Loreto’s pioneering residents spend their days golfing, kayaking, deep-sea fishing and hiking.

For some second-home 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 Aeroméxico from Los Angeles, San Diego and Phoenix.

Lots are continuing to sell — about 800 so far — and the dirt is flying. Many who do 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 the early days of 2004. As an executive with Prudential California Realty in San Diego, he’s very familiar with Mexican real estate and his firm has often recommended Loreto to customers. “A comparable property in Cabo,” he said, “would cost well over $2.5 million.” And there’s a bonus: Mexican property taxes run about a tenth of those in the United States.

MR. CLARK’S house still isn’t finished. Loreto Bay at first “outsold their ability to build fast enough,” he said, adding that Citigroup and a new management company, Replay Resorts, have that under control. Yet he shows no resentment toward the first developers. “It was still the vision and the passion of the original team that captured my imagination,” he said. And he likes the atmosphere they created. “Loreto is anti-spring break,” he said. “My wife and I have seven kids. It’s clean, peaceful, safe.”

Another couple with children, Doug Brown and his wife, Ann, bought a lot in 2005 where their three-bedroom, two-bathroom villa now stands, expecting it to be their second home, but now making it their first. “There are just certain places that feel right,” Mr. Brown said.

After the house was finished last year, they sold their home in Carlsbad, Calif., packed up their possessions and their family and became full-time expatriates. “We liked the people on our first visit. But no question, we also bought the mission of this place.”

They use home schooling to supplement the education that their children, who learned some Spanish in kindergarten and first grade in California, receive at the public school in the town of Loreto. “I’d lived all the over the world as a customer service rep for fabric companies,” said Mr. Brown, 49. “It had been a great education to live outside the States. I wanted my kids to have that chance.”

Ms. Brown, 50, is similarly pleased. “I don’t feel isolated,” she said. “I don’t feel like I’m missing anything. As for American popular culture, I wanted to get away from that anyway.”

Like Mr. Durnian and Mr. Clark, the Browns have also watched their property appreciate. All estimated that their initial investments had nearly doubled, based on comparable current sales.

Bob Toubman, vice president of the Loreto Bay Resort, said the fully realized Loreto Bay would probably take “another 10 or so years to build out.” As for cost, “there’s a number out there, but you’re going to have to pick it,” he said. Actually, estimates range from $3 billion to $6 billion — a whopping build-out even by 21st-century standards.

But with the tens of millions of American baby boomers who are expected to retire or become semiretired over the next couple of decades, this just might be the shape of things to come.