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I've been spending most of my time in Phoenix recently and therefore haven't been able to post quite as much of the happenings down in Puerto Peñasco (Rocky Point) as I'd like. So expect updates a little less frequently over the next several months.
An article from the Arizona Daily Star [free subscription required] about the long-term feasibility of desalinated water for Arizona (mentions Rocky Point). The same environmental and energy issues exist for the feasibility of a desalination plant to supply all of Puerto Peñasco (a study of this has been commissioned).
ALSO: Dutch DJ Fedde la Grand showed up in Puerto Peñasco last month and drew a few thousand to a couple of shows. Probably the first internationally recognized electronica DJ to come to town (hopefully the first of many). I missed the shows but video can be seen here and here.
According to the press release, certain contingencies, such as finalizing the paperwork on a construction loan for the first phase of Villa Cortez (to be provided by Strategic Capital) and hiring an experienced hotel management company to run the resort, still need to be met for the project to move forward. But it is another good sign that some of the condominium developments in Puerto Peñasco are beginning to find creative ways in slower times to move forward and get projects built (despite these equity infusions not necessarily being that favorable to the developer's profits).
An interesting interview by Business News Americas with Claudia Velazquez, the market studies director of Softec, focusing on the Mexico real estate market. Softec is a real estate consulting and market study firm in Mexico.
President Felipe Calderon's speech this past week submitting his new energy bill to the Mexican Senate. The major goal of the bill is to allow state-owned Pemex to enter into joint ventures with private companies to increase capacity for deep water oil exploration in the Gulf of Mexico and to increase refinery capacity for Mexico. Mexico currently does not possess the technology for this deep sea exploration and drilling. As expected, the bill is running into major opposition from the leftist political parties in Mexico.
This is a great opportunity for Arizona realtors to travel to Puerto Peñasco to help satisfy their Arizona continuing education requirements, reacquaint themselves with Puerto Peñasco and to enjoy some time in Mexico. It is also a great opportunity for Puerto Peñasco realtors who are also licensed in Arizona to satisfy their continuing education requirements.
Information on registration and travel arrangements can be found here. Early registration with reduced fees ends April 15th. (Hat tip to Bill Barvitski for this news) Rocky Point is Puerto Penasco
BBB Developments announced today that it has signed a letter of intent for a joint venture with Omega Commercial Finance Corp (OTCBB: OCFN) to secure financing for construction of Los Corales Condominiums, located in the Mirador area by Manny's. According to the press release, they will close on the financing deal with Omega within 90 days and construction will begin thereafter.
As the press release points out, this is not conventional construction financing. It appears from the details in the press release that Omega had been working on behalf of BBB to secure construction financing to build Los Corales for awhile but was unsuccessful. Instead Omega has decided itself to take an equity stake in the development of Los Corales and will receive 45% of the profits in return for providing construction financing. This arrangement was made possible by Los Corales having 108 of its units pre-sold (again, according to the press release).
This arrangment both underlines the difficulty Puerto Peñasco (Rocky Point) developers face in obtaining construction financing for projects in Mexico and a creative financing solution to getting a project built. During real estate boom times in Puerto Peñasco, many developers were able to build entire condominium resorts only using financing from buyers' 30% down payment deposits. Now that the market has slowed down, developers must work to secure more traditional construction financing for their projects - which is only just beginning to be available in Mexico. So it is good to see U.S. finance companies take a financial interest in the Puerto Peñasco market in this form, even if it is only a start toward better access to credit in Mexico for developers. It also shows confidence in the future of development in Puerto Peñasco (albeit by a finance company that is not well known).
And, of course, a by-product of better access to credit for developers in Mexico is that buyers can be more confident that their condominium will get built in a reasonable amount of time and won't have to rely on the continuing success of sales for completion of the project.
The Arizona Republic reprints the LA Times travel article from February, instead of taking the time to send someone from their travel page to visit and write up Arizona's most popular seaside vacation destination.