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By Raúl O'Farrill, St, James Gate Developing & Consulting in Mexico.
It has been brought to my attention that many people are unfamiliar with Puerto Penasco/ Rocky Point' history, and, specifically, how its development compares with other major destinations in Mexico. Many Americans and Canadians would answer the question “What is the fastest growing destination in Mexico?” with Cancun or Puerto Vallarta, but our vibrant Puerto Penasco wins by a long-shot, and has done so for a number of years!
Having worked in both Cancun and Puerto Vallarta -- as well as many other important destinations in Mexico -- I would like to offer an overview of how Rocky Point and those two destinations came to be, and suggest why Rocky Points' pattern of growth is sustainable long into the future.
Cancun was simply invented by FONATUR (Fondo Nacional de Fomento al Turismo / National Trust Fund for Tourism Development), the Mexican federal governments' most important agency for promoting all aspects of non-Mexican use and ownership of Mexican touristic resources and, as their Mission Statement advises, “...to be the institution responsible for the planning and development of sustainable tourism projects of national impact”. In 1967 -- when the Mexican government identified Cancun as a possible tourist destination -- only an empty beach existed there: in fact, the State that it resides in, Quintana Roo, was still a “Territory” of neighboring Yucatan State, and wouldn't achieve full statehood until 1974! FONATUR did a great job by investing heavily in infrastructure in Cancun -- including an international airport, water and electrical resources, and extensive master-planning -- and ever since the first hotels were built in the 1970's the community has thrived. Despite its obvious attractions, Cancun has since the 1990's seen a “plateauing” of development, much of which can be traced to a simple geographical fact: situated at the far northeastern tip of the Yucatan Peninsula, Cancun is very far away, and can -- realistically -- only be accessed by Americans and Canadians by air.
Puerto Vallarta is located in Jalisco State -- on Mexicos' Pacific Coast -- and followed a somewhat different pattern of development from Cancun. Originally “discovered” (by non-native peoples!) in 1525 by Francisco Cortés de San Buenaventura, Puerto Vallarta -- then called Las Peñas -- remained almost uninhabited until the 1920's when the operations of the Montgomery Fruit Company brought a few residents to the tiny town. The port was discovered by North Americans in the 1950's as tourists began to take advantage of the new airport that was being served by Mexicana Airlines from locations within Mexico. Mexicana built on the success of the early air operations and, in 1962, inaugurated Los Angeles–Puerto Vallarta service, which opened the door of convenient access to Californians, including famous movie stars like Richard Burton and Elizabeth Taylor, who filmed Night Of The Iguana there. This exposure through Hollywood -- and Mexicanas' intense advertising campaign and worldwide affiliation with Pan American Airways -- was the basis of Puerto Vallartas' earliest commercial development. FONATUR has played little role in the development of Puerto Vallarta, which has followed a classic pattern of airport / hotels / residences. Despite it's obvious charms and continued success -- and much like Cancun -- Puerto Vallarta suffers from a geographic disadvantage that has limited its growth: its distance from North America, with the drive from Los Angeles usually taking four days!
Puerto Penasco has followed a pattern of development that is radically different from either Cancun or Puerto Vallarta, and which we feel bodes very well for the rapid and sustained growth of our community.
Puerto Penasco's history really begins in the 1920's, when gangsters like Al Capone would fly in little bi-planes from Southern Arizona to escape prohibition, gamble, and enjoy the hospitality of our Old Port, where Capone built a house for his friends -- which is operating to this day as the charming hotel Posada La Roca. But “development” didn't follow immediately. As recently as 1941, when Puerto Peñasco was declared a municipal precinct, less than 200 people lived here!
When Arizonans first began coming here in substantial numbers in the 1960's there was very little in the way of infrastructure, not even paved roads: Avenue Benito Juarez was only partially paved at that time! Sandy Beach -- which you probably associate with spectacular high-rise buildings -- was in those days simply that: a sandy beach!
But these visionary Arizonans understood what FONATUR and real estate developers did not: Rocky Point was a fabulous gateway to the Sea of Cortéz that offered unmatched convenience for North American visitors, with our pristine beaches little over three hours from either Phoenix or Tucson.
Until very recently Puerto Penasco' development has been purely organic, with the Arizonans who discovered our beautiful port in the 1960's leading the way: no FONATUR, no major international airport ( At that time, now Puerto Penasco has a World Class Airport) , only one highway -- the one you drove down through Lukeville -- to link it to North America!
These Arizonan pioneers inverted the classic development model by doing the unthinkable: they built residences first -- before multiple road links, before robust infrastructure, before a major airport! And -- to “professional developers” amazement -- it worked, and continued to work, largely unaided, for nearly thirty years!
By the 1990’s the regime of “benign neglect” began to give way to far more ambitious plans for our community, some of which were initiated by the State of Sonora. One of the most far-sighted of these was the Only Sonora program inaugurated by former Sonoran Governor Manlio Fabio Beltrones -- now President of Mexico's Senate -- and continued and extended under pasts Governors, and is planned even better with our new PAN's Party Governor Guillermo Padres and same party Mayor Alejandro Zepeda, which made Sonora the easiest state in Mexico for North Americans to travel to by car. The simplest description of the present paperwork requirements of the Only Sonora program is this: there are no State-related paperwork requirements, just the obvious requirement that you carry valid Mexican automobile insurance!
Now the State of Sonora -- and FONATUR -- have stepped in with three new completed old 1990's initiatives that are destined to further accelerate the growth of this already vibrant market: the Coastal Highway, the Nautical Ladder, and our new International Airport.
The Coastal Highway was inaugurated on December 17th, 2008, and with it vastly shorter drive times from the West Coast. This long dreamed-of and mammoth construction project, now completed, will provide Puerto Penasco with a new modern highway linking it to Yuma, Sand Diego and LA in the United States. This is particularly welcome news for our friends from Southern California, who's drive from San Diego to Rocky Point will shorten to an estimated 290 miles and take under 4.5 hours!
The “Nautical Ladder” already exists and even when needs improvements has very nice and efficient Marinas, and is really simple support for an obvious fact: people love to cruise the Sea of Cortéz! With numerous ports and harbors along both the mainland and Baja coastlines, "God's Aquarium" is a dream-come-true for everyone that loves the water. FONATUR has wisely seen fit to support a these activities by implementing substantial upgrades to facilities on both sides of the waterway, with over 2.7 million dollars invested to date. As a result of these improvements journeys within the Sea of Cortéz can now be undertaken with unprecedented convenience and safety.
Construction of our new International Airport has finished and is receiving charters flights and any kind of private planes until commercial flights are opened in early 2010. A landmark infrastructure project, our International Airport is being funded by forward-thinking collaboration between the State of Sonora, the Mexican federal government, and the Mayan Palace Group. This tribute to the widespread confidence in Puerto Penasco's future promises to offer rapid travel options to Rocky Point for the many Americans and Canadians who have discovered our port's charms and who live at greater distances, as well as provide a portal for flights to other destinations within Mexico for our numerous full-time residents.
Part of the continued solid growth of Rocky Point’s real estate market is the result of reforms instituted by the Mexican government at the federal level over thirty years ago that simplified real estate ownership by non-Mexicans through the use of bank trusts. This mechanism was specifically designed to facilitate ownership of Mexican real estate by non-Mexicans, and to protect non-Mexican owners rights. This clarification and simplification of the legal aspects of foreign ownership of Mexican properties convinced discriminating homeowner-investors of what has long been the case: ownership of Mexican properties -- especially in Rocky Point -- is both simple and safe.
These bank trusts -- which now enable secure ownership of coastal properties throughout Mexico by now millions of American and Canadian families -- have been central to my entire career. It has been our honor to further enhance the user-friendliness of this ownership mechanism by developing American-standard documentation, procedures, tools, and practices that have enabled our clients' complete understanding of their ownership rights, and rock-solid assurance of the security of their Mexican properties. We have recently developed a new trust-mechanism that even enables citizens of the United States to invest self-directed IRA funds into profitable Rocky Point investments! Even quality title insurance -- largely unheard-of in Mexico until recently -- is widely offered by several firms in Mexico!
Mirroring the evolution of the transaction, ownership, and insurance mechanisms have been the successful efforts of the real estate community in Puerto Penasco. The creation of A.M.P.I. (in 2005) Penasco, Chapter 51 (Asociación Mexicana de Profesionales Inmobiliarios, affiliated with NAR) have created important institutional mechanisms that assure both buyers and sellers that they will be served in the most ethical manner, and that their experience of their transaction will closely mirror their experiences in the United States or Canada. Simply stated, our community now boasts the best educated and most knowledgeable group of real estate sales professionals in Mexico. As an example, a premier Real Estate Company based in Puerto Penasco was selected by the Dolores Olmedo Foundation to list worldwide the most famous house in the world now, the Dolores Olmedo Acapulco Estate and Diego Rivera's Acapulco Studio which is a Land Mark of Mexico and protected by the IMBA because of the great credentials this company proved in the Mexican and International market.
Puerto Penasco has it all: geographical desirability (location, location, location); secure ownership mechanisms; professional real estate practice; a long-established American community; major new infrastructure well under construction; and a long history of substantial development without government support with the solid assurance of substantial government support in the future!
Is it any wonder that we're the fastest growing destination in Mexico? This is a great time to invest in Rocky Point -- and in your family's financial future. As Will Rogers once said, “Don't wait to buy real estate. Buy real estate and wait.”
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