Puerto Peñasco Post

Meeting with AZ Republic about Puerto Peñasco (Rocky Point) Articles

As I mentioned a couple of days ago, the Arizona Republic agreed to sit down and listen to the concerns of many about the articles appearing in the Republic earlier this week.  The meeting was held last night between several major Puerto Peñasco developers, the Sonora Secretary of Tourism, several members of the Republic's editorial staff and the writer of the articles.  I was invited to attend as an American developer working in Mexico and spoke on behalf of the developers in Las Conchas.

It was a productive meeting and gave our side of the table the opportunity to express our concern with how the article was written and to speak about its potentially far-reaching negative effects on the real estate market in Puerto Peñasco.  We made it clear that it was an important article to write and that it was well researched, but that we felt it was irresponsibly written to broadly and incorrectly characterize Puerto Peñasco as a place in which it is not safe to invest.  We indicated that a story written the way it was has the potential to actually cause more financial harm to the thousands of Arizonans with financial interests in Puerto Peñasco than any investment losses already incurred in North Beach. We also had the opportunity to further explain many of the positive development in Puerto Peñasco - such as new licensing rules for realtors, new commercial infrastructure such as the coastal highway and international airport, and new services such as flights between LAX and the current Puerto Peñasco airport.  Finally, we had a chance to talk through all the protections that are currently available to buyers for their investments - such as the fideicomiso (bank trust), U.S. title insurance and U.S. mortgages.  These safeguards have all been developed in cooperation between businesses and institutions on both sides of the border in order to allow Americans to safely invest in Puerto Peñasco and are now used almost universally (as opposed to the time when the problems in North Beach began).

For their part, the representatives of the Republic indicated that they are interested in the positive stories and that they have and will continue to report both the good and the bad when appropriate.  They also indicated that they would consider printing a response from our groups in the reader response section of their newspaper.  I will let you know when that is available.  The writer of the article also separately expressed to me by email in advance of the meeting that in future articles about this topic, he would work to make more clear the distinctions between a problem area such as North Beach and the rest of Puerto Peñasco.

I think it was a good meeting in that it established some additional lines of communication between the Republic staff and representatives of Puerto Peñasco and Sonora.  These contacts are important because Republic staffers will be able to more quickly and accurately vet future stories for accuracy.  We were also invited to directly submit all of the good news about the market to them for consideration as articles.   

Everyone agrees that the problems in North Beach reflect badly on the market and it is appropriate that the Republic reported on them.  The important point to note about this whole episode is that these problems are isolated, have been known about for a long time and are easily avoidable by American condo and land buyers by following the appropriate steps.  There are thousand and thousands of Americans who have invested safely, securely and profitably in Puerto Peñasco over the last 10 years and that number will continue to grow rapidly as the area matures into a world-class vacation destination.

Reader Responses to AZ Republic Articles

I have collected a sample of some of the hundreds of letters sent to the Arizona Republic in response to their articles published recently about Puerto Peñasco (Rocky Point). They appear after the jump. Click below to read.

Update on AZ Republic Article about North Beach

Obviously there are a lot of people in Puerto Peñasco (Rocky Point) and Arizona who are understandably upset about the broad generalizations in the article published in the Arizona Republic on Sunday about the North Beach land dispute. Almost universally, the response has been that the story is an important one to be covered because the North Beach issue needs to be resolved, but it was poorly written to make all of Puerto Peñasco appear to have these title problems (it doesn't). Many people from the Sonoran governmental level on down have written letters to the editor to express their disappointment that the Republic took a land dispute (albeit a significant one - but still not that uncommon even in the U.S.) and unfairly turned it into a sensational "don't invest anywhere in Rocky Point" article.  The Republic putting up a forum today specifically to discuss "horror stories about investing in Mexico" also did not go over well with the people I talked to.  Interestingly enough, every one of the commentators on the forum spoke of very positive experiences, encouraged people to keep investing in Mexico and scolded the Republic for its irresponsible article.  Good support from informed investors.

I have confirmed through several sources that the editors at the Republic have agreed to meet with representatives from the Sonoran government and a group of developers from ADITURPP (the Puerto Peñasco developer's association) on Thursday afternoon this week to discuss the article and its effects and what can be done better in the future for more accurate and concise reporting.  So hopefully there will be some progress in correctly portraying Puerto Peñasco in future articles and in making any amends necessary for this article.

Mary Snyder at Puerta Privada is also collecting positive Peñasco investment experiences and letters to the Republic editors about the article and has requested that readers of this blog send her copies of letters they have written or thoughts they wish to convey to the Arizona Republic about this matter. She will compile these to be presented to the Republic at the aforementioned meeting. You can email these to her at privadasales@hotmail.com under the subject heading AZ Republic.  I encourage everyone to contribute.

My Letter to AZ Republic in Response to Sunday's Puerto Peñasco (Rocky Point) Article

This article about Puerto Peñasco (Rocky Point) in Sunday's Arizona Republic was hard to miss. I am posting a letter below I wrote to writer Dennis Wagner in response to his article. It is a bit long, but worth reading for some clarification to his article.

Dear Mr. Wagner:

I want to thank you for your article Sunday about Rocky Point in the Arizona Republic. It was the most thoroughly researched article I have seen to date about the North Beach litigation (which many of us locally in Puerto Peñasco have know about for quite awhile) and I commend you for taking the time to work to get several angles to the story. Many of the articles or news reports I read or see about Puerto Peñasco are usually pretty quick and dirty where it is apparent the reporter hasn’t taken the time necessary to properly research the issue (pretty easy to do when 200 miles away often with a language barrier). So thanks for doing the extra leg work on this report. I have heard various people grumbling about the legal issues in North Beach for awhile now, but the rumors and innuendo about what was really going on far outpaced any facts. So hopefully your article sheds some additional light on the dispute for people who have limited access to this type of information, gives a voice to people who feel slighted and helps serve as a catalyst for dialogue and a settlement between the parties to the lawsuits (and/or causes the Sonoran or Mexican government to try to step in and mediate the issue). Sometimes it takes a bright spotlight on a problem for it to be resolved.

I am, however, disappointed that you failed to make a better distinction between the North Beach development area and the rest of Puerto Peñasco, particularly in the first several paragraphs of your article. I understand that part of writing newspaper articles is creating a hook to get people to read the rest of the article – but I think the title and first paragraph in particular should have clarified that this dispute is an isolated incident in one small area of Sonora and not a widespread problem. I also think more attention should have been paid throughout the article to letting readers know that most of the land in Puerto Peñasco does not suffer from the legal disputes in North Beach (problems which frankly also occur in the U.S.), and to better emphasize that thousands of American investors have made safe, secure, legal and profitable investments in Peñasco real estate which are not in any jeopardy. While you occasionally threw in a reference to these successes and included a sidebar about property buying guidelines, I think the article unnecessarily broadly generalizes what is an isolated (but admittedly important) legal dispute.

While I would like to give Republic readers more credit, I suspect that many Americans after reading your article today will be tempted to not take any chances and to forego a potentially profitable investment in Mexico despite the safe and simple ownership rules for Americans. As you know, there are many Americans with financial interests of varying sizes in Puerto Peñasco. Negative articles in such a widely circulated Arizona newspaper without the balance of positive articles about the area have the potential to cause collectively as much or more financial loss for Americans as the disputes happening in North Beach today - due to a loss in investor and buyer confidence in the area.

So I hope that you also take the same time and effort to cover many of the extremely positive developments in Puerto Peñasco, including the strong commitment by the state and federal governments to building Puerto Peñasco into a world class vacation destination, development of the new international airport, the new coastal highway, commencement of commercial air service to Los Angeles International Airport, new licensing rules for real estate agents, a renewed commitment to the commercial tourism infrastructure of Peñasco by local developers and the local government, and the other strong vacation market fundamentals that will propel Puerto Peñasco through the infant stages of a sustainable 25 year growth period. Puerto Peñasco will grow steadily over the years hand-in-hand with Arizona and I hope the Republic commits itself to objectively covering this important resort town to the south – through both its growing pains and its successes.

I hope you will stay on top of this particular story to flesh out additional details (of which I know there are many) - especially from governmental officials and the Mexican courts. And I trust you and the Republic will treat any favorable resolution of the situation as news that is worthy of receiving the same type of publicity and placement as your article today. I would only request that you better clarify the limited scope of this particular dispute in future articles and work to better reassure current and future American investors that if they follow proper procedures and do their due diligence, their investments in Puerto Peñasco will be safe. For more information about the many positive developments in Puerto Peñasco, I invite you to visit my business, tourism and real estate blog at www.puertopenascopost.com and I would be more than happy to assist you in collecting additional information about the many positive developments in Puerto Peñasco.

Please share my thanks and concerns with your editors and best of luck as you pursue these stories.

Best Regards.

CEDO in Puerto Peñasco (Rocky Point) Wins Award

As part of National Conservation Week in Mexico, the Centro Intercultural de Estudios de Desiertos y Oceanos (CEDO) or the Intercultural Center for the Study of Deserts and Oceans, located in the Las Conchas area of Puerto Peñasco (Rocky Point), received a prestigious award recognizing their group as the top non-governmental organization working for nature conservation in all of Mexico.  The Arizona Daily Star has the full story here.

I think CEDO is often overlooked by newcomers as an important part of the cultural scene in Puerto Peñasco.  So I would encourage visitors to take the time to contact them through their website and go visit their center in Las Conchas.  In particular, I think this is a good cultural activity for everyone who feels there aren't that many options other than the beaches in town.  I know CEDO is more than happy to teach visitors about the diverse species in the Sea of Cortez and the surrounding desert.  You can read more about their activities, tours and events here and here.

CEDO is also in the process of a fundraising drive to raise money to secure title to their land in Las Conchas.  There was a recent title dispute between their organization and neighboring landowners that was settled.  However, as part of the settlement CEDO needs to raise money to help pay to secure their title.  So I would encourage tourists and locals not only to visit, but also to donate to CEDO's Property Rights Fund.  More information can be found here.

Shifting Mexican Business Cultures in Puerto Peñasco (Rocky Point)

In my former life as a corporate lawyer, I often spent upwards of 15 hours a day working in the office. Most business was conducted over the phone or by email. I carried my Blackberry everywhere with me and would respond to all email within minutes. Face-to-face meetings with clients (or between clients doing a deal) were rare. And lunch only happened when I had time to sneak out for five minutes to grab something to take back to my desk.

Needless to say, my second career working in real estate development in Mexico was somewhat of a seismic shift for me in business cultures. In Puerto Peñasco (Rocky Point), emails often remain unreturned for several days – or forever. “I will get it done by tomorrow” can mean “I am very busy and maybe you will see something from me within the next week.” Large, all-hands meetings happen frequently to hash out details of a transaction and to catch up on business. And lunch is taken very seriously (many offices are closed from 2 p.m. to 4 p.m. and important business lunches can extend several additional hours).

It is easy for Americans to criticize the Mexican business culture as being a little too laid back. I prefer to think of it simply as a culture that prioritizes its time a little differently than Americans do – taking more time for family and leading a more balanced lifestyle. The Mexican style of business also harkens back to the days in the U.S. where handshake deals were more common and face-to-face meetings were important in establishing a long-lasting business relationship. After working in Mexico for over two years now, I can say it is refreshing to have the opportunity to spend a little extra time in a room together with potential business partners telling jokes and getting to know one another. At times, the lack of urgency in getting things done has been frustrating to me, but it has certainly helped my patience (Serenity now!).

However, as Mexico becomes more and more Americanized and its business leaders spend more time shuttling back and forth between the U.S. and Mexico, the American business culture has begun to seep into Mexico. My Mexican lawyer is a good example of this. He works all hours of the day – sometimes sleeping overnight in his office (I remember those days…). He has three cell phones and always answers them. He communicates efficiently by text message on his phone and instant message on his computer – often at the same time. And you will usually find him working right through the traditional Mexican lunch period. One of the main reasons he does this is because many of his clients are American and he has adapted to our business culture in order to serve us better.

From what I have read and been told by my Mexican friends, this transition to American-style business customs has advanced even more rapidly in the major cities of Mexico. I read an interesting article today in Reuters about how the new thing in Mexico City is to skip the long lunches and to have a short networking breakfast instead. As Puerto Peñasco becomes a more sophisticated business and cultural center focused on tourism in the coming years, expect to see more and more Mexican business professionals start to adopt American-style workdays. As for me, I am going to continue to relish the opportunity to occasionally spend a couple of hours in the afternoon with some of my old-school Mexican business associates eating shrimp at a favorite restaurant by the water…still handcuffed to my trusty Blackberry of course.

Lukeville Border Crossing Expansion Announced for Puerto Peñasco (Rocky Point)

Big news coming out of the Arizona-Mexico Commission Fall Plenary Session taking place this weekend in Ciudad Obregon, Sonora.  Arizona Governor Janet Napolitano announced that the Arizona Department of Transportation has agreed to partially fund expansion of the border crossing in Lukeville, AZ to help handle the vacation traffic traveling from Puerto Peñasco (Rocky Point) back home to Arizona on weekends. ADOT will help fund two additional processing lanes, bringing the total to six lanes (including one commercial lane). Funding will be contingent on additional private money being raised from Puerto Peñasco developers and businesses, which is expected to be secured.

To read more, click below...

Proposed Scenic Corridor in Puerto Peñasco (Rocky Point)

Recently plans have been announced for a $50 million USD scenic corridor that will connect the Malecon/Old Port to Mirador with landfill and a new boulevard around the seaside edge of Whale Hill.  This is exciting news for Puerto Peñasco. One of the difficulties experienced by tourists and residents alike is the lack of continuity across the town's tourist districts. Currently, visitors must travel all the way around Whale Hill from Old Port to get to Mirador, the other main entertainment district in town. This interruption in public tourism spaces has stunted the growth and redevelopment of both areas and presents problems with traffic flow in the city.

Not only will this new boulevard around the sea side of Whale Hill connect the two main tourism/entertainment districts, it will also create an opportunity for additional tourism spaces, featuring restaurants, hotels, bars and public gathering areas along the new boulevard.  This proposed area has the potential to become the central tourism zone for Puerto Peñasco.

According to my sources, money has not yet been appropriated for this ambitious project and therefore no start date has been set. It remains to be seen where this money will come from, but my sense is it will be primarily private development money.  So like most large projects proposed in Puerto Peñasco, I wouldn't get too excited about it until the day when machinery is actually at the site and working.  Nevertheless, this proposal shows forward thinking on the part of government officials in Puerto Peñasco and Sonora and it is good to see these types of creative projects proposed.  If it becomes reality, it will be a great boon for the city.

I have obtained the presentation showing graphic renderings and conceptual designs of the proposed project. You can view it by clicking below. It is a large file so will take a bit of time to load.  I encourage everyone to take the time to watch it.

Play Presentation

Banco Wal-Mart Someday Soon in Puerto Peñasco (Rocky Point)?

Wal-Mart reportedly hasn't yet settled on where it is going to build in Puerto Peñasco (Rocky Point), but multiple sources say it is eventually going to put a store in the area.  News out yesterday is that Wal-Mart de Mexico SAB has opened up consumer banking branches in four of its Wal-Mart stores in Mexico and is planning on eventually rolling out branches in many of its stores across the country.  The idea being to provide bank accounts to Mexicans who don't currently have them because of the high fees the major Mexican banks charge and minimum balance requirements that many cannot meet.

Presumably when Wal-Mart does take the leap and opens up a store in Puerto Peñasco, it will include a Banco Wal-Mart branch that will provide low-cost consumer banking competition to the other banks in town.

So capitalism is alive and well in Mexico and Wal-Mart is a big part of the picture.  For anyone worrying about Banco Wal-Mart stepping on the toes of locally owned banks - don't.  All the major banks in Mexico are owned by powerful international banking conglomerates such as Citicorp, Bank of America, Scotiabank, HSBC and BBVA.  So the result of this new venture by Wal-Mart will probably be current Mexican banks losing some market share and needing to contemplate lowering their rates to maintain their account and deposit levels - thus benefitting the consumer, particularly low income Mexicans.

The full Bloomberg article can be read here.

Articles on Buying Property in Mexico

The San Francisco Chronicle published the second of a two-part series this past weekend written by Kathleen Pender about foreign property ownership.  This part focuses on owning property in Latin America and gives some good tips for owning property in Mexico.  You can read the article here and I am also posting it after the jump to preserve it in my blog archive.  She also includes an abbreviated article on avoiding pitfalls of Mexican property ownership that can be read here.  I am also posting it after the jump.

Click below to read both articles...

Pictures from the 7th Annual Rocky Point Rally in Puerto Peñasco

My business partner snapped a few shots around town on Saturday - a day featuring perfect weather in Puerto Peñasco for the 7th Annual Rocky Point Rally.

Over the past several years, the annual event has become a favorite for southwestern bikers to attend (drawing approximately 7,000 riders last year).  It is a unique weekend where the average vacationer can see some sights only seen once a year in Puerto Peñasco.  Hopefully everyone had a good time and stayed safe.  I'm sure we will hear some great stories and additional accounts about the weekend, attendance, etc. over the next several days. 

In the meantime, enjoy a few pictures from the weekend.  Looks like the bikers enjoyed displaying their rides in the new Governor's Square on the Malecon in Old Port.  It also sounds like the border crossing home on Sunday wasn't too painful with wait times maxing out around one hour in mid-afternoon.  Border patrol designated a special lane for bikers and again opened up the commercial lane to handle RVs and vehicles with trailers.  So by early accounts, a great weekend was had by all.

Free MySpace slideshows, photo and video editing at www.OneTrueMedia.com

Should I pay in dollars or pesos in Puerto Peñasco (Rocky Point)?

On Friday as my business partner and I were doing some banking, we twice had the opportunity to help a few first-time visitors to Mexico understand the benefits of using pesos instead of dollars to pay for items in Puerto Peñasco (Rocky Point).  While this may seem elementary to regulars in town, it was a good reminder for me that first-time visitors to Mexico often need a primer on dollars vs. pesos.

I write more on this after the jump, so click below to keep reading...

Rocky Point Motorcycle Rally This Weekend

A reminder for visitors this weekend that the 7th Annual Rocky Point Rally starts today and runs through Sunday in Puerto Peñasco (Rocky Point).  I have heard estimates that anywhere from 7,000 (last year's approximate attendance) up to 15,000 motorcycle riders will be in town.  Already today the town is teaming with riders and hundreds more are arriving by the hour.  For many of the bikers, it will be a fun weekend to see all of the new restaurant, lodging and nightlife options that have opened in Puerto Peñasco since they were here last year.  Should be a fun weekend for all. 

For more information on the event check out the event website here.   Check back after this weekend and I will try to post some pictures.

The Arizona Star has an article here warning about the expected congestion at the border crossing on Sunday.  My advice is to leave early Sunday morning (before 9 am) or stick around until Monday as the border is expected to have a long wait on Sunday afternoon coming back into the U.S.  Or if you aren't a rider and could care less about the rally, make a trip next weekend when the weather is still expected to be great and it should be a little less crowded in town.

New Tourism Police in Puerto Peñasco (Rocky Point)

I received word today that a special branch of tourism police is being designated this week in Puerto Peñasco (Rocky Point).  I don't have more details other than that it will consist of 10 patrol cars (not sure whether they are state or local police).  I am working to find out more and will provide additional details when they are available.  There is a ceremony this afternoon to inaugurate the new branch.

This is a step in the right direction to help control some of the recent issues the town has had with police collecting bribes from tourists.  It is one of the reforms I previously called for in my post on police corruption that you can read here.