Puerto Vallarta Rentals Blog

Thomas Dale & Associates (TDA) just released a study, concluding that Puerto Vallarta is one of the safest tourist destinations for international and national tourists.

The Puerto Vallarta Tourism Board appointed TDA, a global investigative and security firm who lists several Fortune 100 companies amongst its clients, to complete a Security/Threat assessment.

The international security company visited the destination from April 6-13 to conduct interviews and a thorough assessment on the ground, and based on findings develop a comprehensive report in relation to all aspects of tourist security in the destination.? ?TDA individually interviewed domestic as well as international tourists, American and Canadian Consuls, retired ex-pats, time-share members, part-time residents, seasonal boaters, business owners, hospital administrators, gay community business representatives, health insurance professionals, cabbies, conventioneers and honeymooners.

The interviews were followed up by requests to local law enforcement sources for crime data and department deployment. The Civil Protection Department (FIMA) was also consulted regarding natural disasters.? ?The interviews focused on the following three areas; safety in Puerto Vallarta and the perception of its visitors; personal experiences and the U.S. Travel Warning to Mexico.? ?The study found that the number of negative events involving foreigners or non-foreigners is fractional compared to the large ex-pat resident population and the millions of visitors that come to vacation each year in Puerto Vallarta.

Overall the study found that visitors to the destination feel safe and continue to visit Puerto Vallarta numerous times through their lifetime and that the destination’s support services are well above the average standards and dedicated to serving the visiting public.

In relations to the drug wars, TDA found that the limited land transit makes the smuggling of guns and drugs through Puerto Vallarta very difficult and thus a non-issue in the destination.?

Visit: http://www.puerto-vallarta-rentals.com

First: A reality check on Mexico

Mexico is in a unique position to reap many of the benefits of the decline of the
US economy. In order to not violate NAFTA and other agreements the U.S.A.
cannot use direct protectionism, so it is content to allow the media to play this
protectionist role. The U.S. media – over the last year – has portrayed Mexico
as being on the brink of economic collapse and civil war. The Mexican people
are either beheaded, kidnapped, poor, corrupt, or narco-traffickers. The
American news media was particularly aggressive in the weeks leading up to
spring break. The main reason for this is money. During that two-week
period, over 120,000 young American citizens poured into Mexico and left
behind hundreds of millions of dollars.

Let’s look at the reality of the massive drug and corruption problem,
kidnappings, murders and money. The U.S. Secretary of State Clinton was
clear in her honest assessment of the problem. “Our insatiable demand for
illegal drugs fuels the drug trade. Our inability to prevent the weapons from
being illegally smuggled across the border to arm these criminals causes the
deaths of police officers, soldiers and civilians,” Clinton said. The other large
illegal business that is smuggled into the U.S.A. that no one likes to talk about
is Human Traffic for prostitution. This “business” is globally now competing
with drugs in terms of profits.

It is critical to understand, however that the horrific violence in Mexico is over
95% confined to the three transshipping cities for these two businesses,
Juarez, Tijuana and Nogales. The Mexican government is so serious about
fighting this, that they have committed over 30,000 soldiers to these borders
towns. There was a thoughtful article written by a professor at the University
of Juarez. He was reminded of the Prohibition years in the U.S.A. and
compared Juarez to Chicago when Al Capone was conducting his reign of
terror capped off with The Saint Valentine’s Day Massacre. During these
years, just like Juarez today, 99% of the citizens went about their daily lives
and attended classes, went to the movies, restaurants, and parks.

Is there corruption in Mexico? YES !!! Is there an equal amount of corruption
related to this business in the U.S.A.? YES !!!. When you have a pair of illegal
businesses that generate over $300,000,000,000 in sales you will find massive
corruption. Make no mistake about the Mexican Drug Cartel;
these “businessmen” are 100 times more sophisticated than the bumbling
bootleggers during Prohibition. They form profitable alliances all over the
U.S.A. They do cost benefit analysis of their business much better than the US
automobile industry. They have found over the years that the cost of bribing
U.S. and Mexican Border Guards and the transportation costs of moving
marijuana from Sinaloa to California have cut significantly into profits. That is
why over the past 5-7 years they have been growing marijuana in State and
Federal Parks and BLM land all across America. From a business standpoint,
this is a tremendous cost savings on several levels. Let’s look at California as
an example as one of the largest consumers. When you have $14.2 billion of
Marijuana grown and consumed in one state, there is savings on
transportation, less loss of product due to confiscation and an overall reduction
cost of bribery with law enforcement and parks service people. Another great
savings is the benefit to their employees. The penalties in Mexico for growing
range from 5-15 years. The penalties in California, on average are 18 months,
and out in 8 months. The same economic principles are now being applied to
the methamphetamine factories.

FOX News continues to scare people with its focus on kidnapping. There are
kidnappings in Mexico. The concentration of kidnappings has been in Mexico
City, among the very rich and the three aforementioned border Cities. With
the exception of Mexico City, the number one city for kidnappings among
NAFTA countries is Phoenix, Arizona with over 359 in 2008. The Phoenix Police
estimate that twice that number of kidnappings goes unreported, because like
Mexico 99% of these crimes were directly related to drug and human traffic.
Phoenix, unfortunately, is geographically profitable transshipping location.
Mexicans, just like 99% of U.S. Citizens during prohibition, go about their daily
lives all over the country. They get up, go to school or work and live their
lives untouched by the border town violence.

These same protectionist news sources have misled the public as to the real
danger from the swine flu in Mexico and temporary devastated the tourism
business. As of May 27 2009 there have been 87 deaths in Mexico from the
swine flu. During those same five months there have been 36 murdered
school children in Chicago. By their logic, if 87 deaths from the swine flu in
Mexico warrants canceling flights and cruise ships to Mexico, then close all
roads and highways in the USA because of record 43,359 automobile related
deaths in the USA in 2008.

What is just getting underway is what many are calling the “Largest southern
migration to Mexico of people and real estate assets since the Civil War” A
significant percentage of the Baby Boomers have been doing the research and
are making the life changing decision to move out of the U.S.A. The number
one retirement destination in the world is Mexico. There are already over
2,000,000 US and Canadian property owners in Mexico. The most
conservative number of American and Canadian Baby Boomers who are on
their way to owning property in Mexico for full or part time living in the next
15 years is over 6,000,000. Do the math on 6,000,000 people buying a
$300,000 house or condo and you will understand why the U.S. Government is
trying to tax this massive shift of money to Mexico through H.R. 3056. The
U.S. government calls this “The Tax Collection Responsibility Act of 2007”.
Those who will have to pay it are calling this the EXIT TAX.

Mexico: A better economic choice than China

Another large exodus from the U.S.A is high paying skilled jobs. The job shift
in automobile sector, both car and parts manufacturing, is already known by
most investors. In the last few months as John Deere and Caterpillar have
been laying off thousands of workers in the U.S.A., and hiring equal numbers
in Mexico. The most recent industry that is making the shift is the aerospace
manufacturers. In the city of Zacatecas there is currently a $210 million
aerospace facility being built. With the 11 U.S. companies moving there, it is
estimated to provide over 200,000 new high paying jobs in the coming years.
One of the main factors for the shift in job south to Mexico instead of China is
realistic analysis of total production, labor and delivery costs. While the labor
costs in China are 40% less on average, the overall transportation costs and
inherent risks of a long distance supply chain, and quality control issues, gives
Mexico a distinct financial advantage.

Mexico’s real economic future

Mexico has avoided completely the subprime problem that has devastated the
U.S. banking industry. The Mexican banks are healthy and profitable. Mexico
has a growing and very healthy middle and upper middle class. The very
recent introduction of residential financing has Mexico in a unique position of
having over 90% of current homeowners owning their house outright. U.S.
banks are competing for the Mexican, Canadian and American cross border
loan business. It is and will continue to be a very safe and very profitable
business. These same banks that were loaning in a reckless manner have
learned their lesson and are loaning here the old fashioned way. They require
a minimum of a 680 credit score, 30% down payment, and verifiable income
that can support the loan. In most areas of Mexico where Baby Boomers are
moving to, with the exception of Puerto Penasco (which did not have a
national and international base of buyers), there is no real estate bubble.. The
higher end markets ($2-20 million) in many of these destinations are going
through a modest correction. The Baby Boomers market here is between
$200,000 and $600,000. With the continuing demand inside the Bay of
Banderas, that price point, in the coming years, will disappear. This is the
reason the Mexican government is spending billions of dollars on more
infrastructure north along the coast all the way up to Mazatlan.

The other major area where America has become overpriced is in the field of
health care. This massive shift of revenues is estimated to add 5-7% to
Mexico’s GDP. The name for this “business” is Medical Tourism. The two
biggest competitors for Mexico were Thailand and India. Thailand and India’s
biggest drawback is geography. Also recent events, Thailand’s inability to
keep a government in place and the recent terrorist attack in Mumbai, have
helped Mexico capture close to half of this growth industry. In Mexico today
there are over 56 world class hospitals being built to keep up with this
business.

Mexico is currently sitting on a cash surplus and an almost balanced budget.
Most Americans have never heard of Carlos Slim until he loaned the New York
Times $250 million. After that it became clear to many investors around the
world what Mexicans already knew: that Mexico had been able to avoid the
worst of the U.S. economic devastation. Mexico’s resilience is to be admired.
When the U.S. Federal Reserve granted a $30 billion loan to each of Mexico,
Singapore, South Korea, and Brazil, Mexico reinvested the money in Treasury
bonds in an account in New York City.

According to oil traders, Mexico’s Pemex wisely as the price of oil shot to $147
a barrel put in place an investment strategy that hinged on oil trading in the
range of $38-$60 a barrel. Since the beginning of 2009 Mexico has been
collecting revenues on hedged positions that give them $90-$110 per barrel
today. Mexico’s recent and under reported oil discovery in the Palaeo
Channels of Chicontepec has placed it third in the world for oil reserves, right
behind Canada and Saudi Arabia.

The following is a quote from Rosalind Wilson, President of the Canadian
Chamber of Commerce on March 19, 2009. “The strength of the Mexican
economic system makes the country a favorite destination for Canadian
investment”.

OPPORTUNITIES: WHY PUERTO VALLARTA & THE RIVIERA NAYARIT

The answer is simple and old fashioned: SUPPLY AND DEMAND.

The area of Puerto Vallarta/Riviera Nayarit inside the Bay of Banderas is an
investor’s dream. This area has the comprehensive infrastructure in place,
world class hospitals and dental care, natural investment protection from the
Sierra Madre Mountains, endless future water supply, low to nonexistent
crime, international airport, and limited supply inside the Bay, first class
private bilingual schools and higher than average appreciation potential. Like
many areas in Mexico there is large demand for full and part time retirement
living and a lot of construction underway to meet this demand. Pre
construction of course is where the best bargains are available.

I would offer a word of caution for investors in Mexico. Do not be seduced by
the endless natural beauty that is everywhere, both inland in colonial towns
and along thousands of miles of beach. Apply conservative medium and long
term investment strategies without emotion. The demand for full and part
time living by American and Canadian Baby Boomers is evident throughout
the country. The top two choice locations are ocean front, and ocean view.
The third overall choice, which is less expensive, is inland in one of the many
beautiful colonial towns or small cities.

Mexico, with the world’s 13th largest GDP, is no longer a “Third World
Country”, but rather a fast growing, economically secure state, as the most
recent five-year history of its financial markets when compared to the U.S.A.’s
financial markets suggests.

DOW JONES AVERAGES MAY 2004 10,200 – MAY 2009 8,200 20% LOSS IN 5
YEARS

MEXICAN BOLSA MAY 2004 10,000 – MAY 2009 23,000 130% GAIN IN 5 YEARS

Robert P. Miller, PhD

Despite the increase in drug-related violence, a closer look at Mexico shows that the country is actually safer than what headlines suggest. As a whole, Mexico’s murder rate is surprisingly low: 12 homicides for every 100,000 inhabitants. When compared to Washington, D.C.’s 31 people per 100,000 inhabitants and New Orleans 64, the numbers aren’t cause for concern if you know where to not go.

According a recent US State Department’s report, the state of Jalisco and Puerto Vallarta are in the minimum percentage category of violent crimes.

OXXO is Mexico?s equivalent of 7-11’S or convenience food marts in the USA. Puerto Vallarta has 200 now and they plan to open 1 per week in 2009, they are owned by the parent company of Sol beer. They also brew & sell Tecate, Dos Eequts (xx) plus Coors and Indio of Mexico. They are trying to increase their market share up over Corona, no Corona sold at OXXO stores. They have 7,000 stores nation wide now. The mom and pop small groceries are a thing of the past now. They are experiencing the same fate that occurred when Sam?s, Wall-Mart, Office Depot and then Home Depot opened in Puerto Vallarta.

Santos Santana takes in a breath and gives a long gaze at the man pounding away with his jackhammer on the pier, as a frogman dips in and out of the water splashing around the structure gradually being taken apart. For the lanky, 30-year veteran of Puerto Vallarta’s tourist trade, the project scheduled for completion sometime this year can’t come soon enough.

Already grappling with a slow season, boatmen and tour operators like Santana on Los Muertos Beach have an additional problem: they find it harder to load passengers directly from the beach’s sands while the old pier is torn down and replaced with a new one. “Less people, less money,” Santos sighs.

“I hope it’s better, so there will be better service,” he says. “This is the most popular zone of Puerto Vallarta.”

The new Los Muertos pier is just one aspect of the renovation of Puerto Vallarta’s downtown and adjoining areas. Even as what passes for this year’s winter high season kicks into full gear, a multi-pronged campaign to freshen up the Mexican resort’s historic center is underway.

Supported by federal, state and municipal funds, the downtown revitalization includes the expansion of sidewalks, the painting of houses, the removal of above-ground telephone and cable wires, the construction of a new foot bridge over the Rio Cuale, the creation of a long walking tour and the eventual opening of new museums.

According to Jose Luis Diaz Borioli, director of Puerto Vallarta’s municipal tourism department, the local government is planning to close Puerto Vallarta’s downtown city hall and move it to another section of the city later this year.

In its place, a museum of still-undetermined character will be established. And to oversee a new downtown and keep it orderly and thriving, a special governing and financing authority, or Patronato, with a long-term mission has been formed, Diaz says.

“We’re trying to make the downtown more active, and we’re trying to make an institution that will continue regardless of who is in government,” Diaz adds.

The tourism official says the world trend of revitalizing downtowns to grow tourism in places like Bilbao, Spain, makes it imperative for Puerto Vallarta to counter the competition and freshen up its own historic center. Of the three top Mexican resorts- Cancun, Cabo San Lucas and Puerto Vallarta- the Pacific port on Banderas Bay has a unique draw, Diaz
says.

“Puerto Vallarta is the only one that has a little Mexican town, and this little town 20 years ago was what made the difference in travelers coming to Puerto Vallarta,” he adds. Diaz and many other residents consider the recovery and preservation of Puerto Vallarta’s historic and cultural soul
a burning necessity.

As veteran Mexico travelers can attest, the Puerto Vallarta of 20 or 30 years ago is a far cry from the bustling city of today.

According to a 2008 book authored by Puerto Vallarta’s official historian Juan Manuel Gomez Encarnacion, the city’s population soared from 38,645 people in 1980 to 220,368 in 2005.

In recent years Wal-Mart, Sam’s Club and Costco came to town; indoor shopping malls enclosed upscale stores; the Oxxo and Kiosco convenience store chains spread from block-to-block; condominium towers lorded over beaches; multicinemas rolled out their screens, and a trio of gaming parlours began sucking in money.

Prior to the global financial meltdown that struck in 2008, the Mexican government’s National Trust Fund for Tourism Development (FONATUR) projected that Puerto Vallarta and the so-called Riveria Nayarit on the northern end of Banderas Bay would have 53,000 available guest rooms to lodge six million tourists by 2025, according to Gomez.

Housing the working-class of the tourist trade, underdeveloped neighborhoods lacking paved roads and basic services popped up on the city’s edges, replicating a pattern of development present in virtuallly every other large Mexican and Latin American city.

Traffic jams, garbage disposal problems and beach pollution were all part of the package. Several years ago, talk became intense of the “Acapulcoization” of the once-tranquil town.

Some locals contend that the even more rapid development of Nuevo Vallarta and the Riveria Nayarit came at the expense of Puerto Vallarta proper.

Although Puerto Vallarta hosts the regional airport, many visitors are quickly whisked away to all-inclusive lodgings just across the state line in Nayarit, which benefits from the tourist dollars and any subsequent tax revenues that are collected. Indeed, the apperance of a specific Riveria Nayarit stand separate from the national one at last month’s international tourism fair in Spain attracted press notice.

Martin Puebla, vice-president of the Puerto Vallarta branch of the CANACO-Servtur business association, contends that Puerto Vallarta and the Riveria Nayarit are one destination that should be jointly promoted. He says that protecting the environment by improving wastewater treatment and adopting eco-friendly practices are essential steps in safeguarding
Puerto Vallarta’s indentity and future.

“At the end of the day, nature is why people come to Puerto Vallarta,” Puebla says. “People have become more sensitive about the ecosystem.”

According to the 13-year resident of the Pacific resort, the pending construction of a new, fast highway from the huge state capital of Guadalajara to Puerto Vallarta will be an important test for balancing development and environmental protection.

Puebla, whose organization counts 350 local affiliates, contends the new road should avoid damage to the zone he calls “the mountain,” or the area that encompasses the biologically diverse Sierra Madre foothills. “If we destroy the mountain, another one won’t rise up,” Puebla says.

The business sector representative backs the downtown revitalization program currently underway, saying it is a chance to restore a charm that lured so many newcomers in the past. “The downtown will be only for tourists,” Puebla asserts. “We can save a piece like a capsule in time.”

Exhuding a laugh, Puebla adds, “People will see a Mexican town and not a Taco Bell.”

Puebla says three years of a crisis economy allowed some to step back a bit and re-envision what Puerto Vallarta should be like in the future. He compares his town’s experiences with the movie “A Day without Mexicans,” in which all sorts of calamities befall US citizens dependent on a migrant Mexican labor force that has suddenly disappeared.

“We are learning what it is to spend a day without tourists,” Puebla affirms.

Looking beyond the downtown project, Canaco-Servytur is in the process of elaborating a vision statement that will serve as a guide for future development, “Puerto Vallarta 2025,” he adds.

“We’ve learned the lesson that we have to work hard and see the future,” Puebla says. “If we don’t work the Puerto Vallarta brand,”
nobody will do it.”

Is it safe to travel to Mexico even Puerto Vallarta? taka a look and tell me what you think.

Puerto Vallarta condo rentals

The US government is considering warning its citizens to stay away from crowded places in Europe because of the threat of an al-Qaeda commando-style attack, the BBC has learned.

US and UK officials have confirmed that updated guidance may be issued because of the current terror threat.

A UK official said the travel advisory would not be country-specific.

It would also not go as far as advising against travel to Europe, the official said.

The advisory will be issued in response to intelligence on an al-Qaeda plan to assemble teams of gunmen and send them into crowded places to kill western civilians, similar to the 2008 attacks in Mumbai.

After intelligence details of the plan had been leaked to the US media last week, officials said that the plan had not been stopped but that an attack was not expected to be carried out imminently.

Officials said that several individuals were still under surveillance.

The suspects include British citizens of Pakistani and German citizens of Afghan origin.

Recent US drone raids in Pakistan reportedly targeted the al-Qaeda militants who inspired the plans.

US officials said that a travel alert might be issued as early as Sunday.

Such a warning could have negative consequences for European tourism if travellers fear that there is a risk of terror attacks.

By: Linda Ellerbee

Sometimes I’ve been called a maverick because I don’t always agree with my colleagues, but then, only dead fish swim with the stream all the time. The stream here is Mexico.

You would have to be living on another planet to avoid hearing how dangerous Mexico has become, and, yes, it’s true drug wars have escalated violence in Mexico, causing collateral damage, a phrase I hate. Collateral damage is a cheap way of saying that innocent people, some of them tourists, have been robbed, hurt or killed.

But that’s not the whole story. Neither is this. This is my story.

I’m a journalist who lives in New York City, but has spent considerable time in Mexico, specifically Puerto Vallarta, for the last four years. I’m in Vallarta now. And despite what I’m getting from the U.S. media, the 24-hour news networks in particular, I feel as safe here as I do at home in New York, possibly safer.

I walk the streets of my Vallarta neighborhood alone day or night. And I don’t live in a gated community, or any other All-Gringo neighborhood. I live in Mexico. Among Mexicans. I go where I want (which does not happen to include bars where prostitution and drugs are the basic products), and take no more precautions than I would at home in New York; which is to say I don’t wave money around, I don’t act the Ugly American, I do keep my eyes open, I’m aware of my surroundings, and I try not to behave like a fool.

I’ve not always been successful at that last one. One evening a friend left the house I was renting in Vallarta at that time, and, unbeknownst to me, did not slam the automatically-locking door on her way out. Sure enough, less than an hour later a stranger did come into my house. A burglar? Robber? Kidnapper? Killer? Drug lord?

No, it was a local police officer, the “beat cop” for our neighborhood, who, on seeing my unlatched door, entered to make sure everything (including me) was okay. He insisted on walking with me around the house, opening closets, looking behind doors and, yes, even under beds, to be certain no one else had wandered in, and that nothing was missing. He was polite, smart and kind, but before he left, he lectured me on having not checked to see that my friend had locked the door behind her. In other words, he told me to use my common sense.

Do bad things happen here? Of course they do. Bad things happen everywhere, but the murder rate here is much lower than, say, New Orleans, and if there are bars on many of the ground floor windows of houses here, well, the same is true where I live, in Greenwich Village, which is considered a swell neighborhood — house prices start at about $4 million (including the bars on the ground floor windows.)

There are good reasons thousands of people from the United States are moving to Mexico every month, and it’s not just the lower cost of living, a hefty tax break and less snow to shovel. Mexico is a beautiful country, a special place.

The climate varies, but is plentifully mild, the culture is ancient and revered, the young are loved unconditionally, the old are respected, and I have yet to hear anyone mention Britney Spears, Lindsay Lohan, or Madonna’s attempt to adopt a second African child, even though, with such a late start, she cannot possibly begin to keep up with Angelina Jolie.

And then there are the people. Generalization is risky, but— in general — Mexicans are warm, friendly, generous and welcoming. If you smile at them, they smile back. If you greet a passing stranger on the street, they greet you back. If you try to speak even a little Spanish, they tend to treat you as though you were fluent. Or at least not an idiot.

I have had taxi drivers track me down after leaving my wallet or cell phone in their cab. I have had someone run out of a store to catch me because I have overpaid by twenty cents. I have been introduced to and come to love a people who celebrate a day dedicated to the dead as a recognition of the cycles of birth and death and birth — and the 15th birthday of a girl, an important rite in becoming a woman — with the same joy.

Too much of the noise you’re hearing about how dangerous it is to come to Mexico is just that — noise. But the media love noise, and too many journalists currently making it don’t live here. Some have never even been here. They just like to be photographed at night, standing near a spotlighted border crossing, pointing across the line to some imaginary country from hell. It looks good on TV.

Another thing. The U.S. media tend to lump all of Mexico into one big bad bowl. Talking about drug violence in Mexico without naming a state or city where this is taking place is rather like looking at the horror of Katrina and saying, “Damn. Did you know the U.S. is under water?” or reporting on the shootings at Columbine or the bombing of the Federal building in Oklahoma City by saying that kids all over the U.S. are shooting their classmates and all the grownups are blowing up buildings. The recent rise in violence in Mexico has mostly occurred in a few states, and especially along the border. It is real, but it does not describe an entire country.

It would be nice if we could put what’s going on in Mexico in perspective, geographically and emotionally. It would be nice if we could remember that, as has been noted more than once, these drug wars wouldn’t be going on if people in the United States didn’t want the drugs, or if other people in the United States weren’t selling Mexican drug lords the guns.

Most of all, it would be nice if more people in the United States actually came to this part of America (Mexico is also America, you will recall) to see for themselves what a fine place Mexico really is, and how good a vacation (or a life) here can be.

So come on down and get to know your southern neighbors. I think you’ll like it here. Especially the people.

The Pacific Airport Group (GAP) has announced that around 500 million pesos will be pumped into the Puerto Vallarta International airport between now and 2014. Francisco Villaseñor Reyes, the airport’s director, says 210 million pesos will invested this year. He said the initial objective is to make the airport more operationally efficient to cope with the predicted increase in passengers.

Monday, April 12, 2010

By Barnard R. Thompson

Just a little more than a year ago Mario López Valdez, a Mexican senator who represented the state of Sinaloa, proposed an amendment to Article 27, fraction 1 of the Political Constitution of the United Mexican States, an initiative that sought to ultimately allow full-fledged ownership by foreign nationals of land in Mexico’s so-called “restricted zone.” That would include coastline properties within the 50 kilometer [31 miles] strip inland, and 100 kilometer [62 miles] inward land from its northern and southern international borders.[1]

Beyond those restricted areas, Mexican law already permits foreigners to own property outright as long as certain conditions, that do not trouble many people, are met.

The bill submitted by López, while being a beginning was in fact too narrow in scope, and next it went to the senate’s Constitutional Issues, and Legislative Studies, committees, where thereafter it seemed to wither on the vine. And it appeared dead when Senator López (who is popularly known by the acronym “Malova”) stepped down from his seat last month, to run for the governorship of Sinaloa.

Sidebar to the land ownership question, Malova asked for the requisite leave of absence from the Senate in order to run for governor. However not as the candidate of his party, the Institutional Revolutionary Party (PRI) [2], for he resigned from the PRI and was promptly drafted to be the National Action Party’s (PAN) candidate, in a deal obviously struck beforehand with party bosses. Yet at this writing many of the PAN faithful in the state are rallying against the party naming “a PRI candidate,” and a voto nulo campaign (a call to mark ballots in a blank square and thus they become nulo — null and void) has been developing ever since Malova began his pre-candidate campaign on March 27. PAN members in Sinaloa will elect their gubernatorial candidate on April 18, and the state elections will take place on July 4.

However, getting back to property ownership matters, a new and far more comprehensive initiative was introduced in the senate on March 9, 2010, cosponsored this time by eight senators (six from the PAN; one PRI; and one Convergence). Three of the Panistas are from Baja California, with the other three representing Sonora, Sinaloa, and Veracruz; the Priista is from Nuevo León; and the Convergencia member hails from Oaxaca.

And this bill, that seeks to end the constitutional prohibition on direct foreign ownership of property within the restricted zones, cuts straight to the chase, saying in its preamble: “The proposal is to eliminate the restricted zone and make it possible for foreigners and foreign companies to acquire direct control over lands and waters without more restrictions than those indicated in the legislation that may become applicable, and in compliance with the terms of the respective contracts. …”

Fundamental to any change is the need to first amend the Mexican Constitution, specifically the aforementioned Article 27, along with several other laws and regulations. And such actions always bring about arguments regarding sovereignty, foreign intervention and national security.

Speaking on behalf of the eight who introduced this latest initiative, Senator Javier Castelo Parada (PAN, Sonora) said that to abolish the prohibition on foreigners owning land in the restricted zone would “in no way harm sovereignty and national territory, [or] legal properties it may protect, and [its] justification is no longer valid.”

Article 27 of the Mexican Constitution, which deals with ownership of lands and waters inside Mexico’s borders, states in the relevant first paragraph of fraction 1: “Only Mexicans by birth or naturalization and Mexican companies have the right to acquire ownership of lands, waters, and their appurtenances, or to obtain concessions for the exploitation of mines or waters. The State may grant the same right to foreigners, provided they agree before the Ministry of Foreign Relations to be considered as nationals with respect to said properties, and not to invoke for that reason the protection of their governments in matters relating to the former; under penalty, in case of noncompliance with the contract, of losing to the Nation the properties that they might have acquired in virtue of the same. Under no circumstances will foreigners be able to acquire direct ownership of lands or waters within a zone of one hundred kilometers the length of the borders and fifty kilometers on the coasts.”

The latest draft initiative, to amend Article 27 of the Mexican Constitution, changes fraction 1 (first paragraph) to read as follows: “Any person has the right to acquire ownership of lands, waters and their appurtenances, or to obtain concessions for the exploitation of mines or waters, in the terms of applicable secondary legislation.”

The introductory portion of the bill goes into historical details, noting that restricted zone stipulations were included in the 1917 Mexican Constitution based on worries of new colonialization attempts by foreigners, and due to military concerns regarding strategic defense. These and other factors related to sovereignty and national security are said to be obsolete and unnecessary today.

It also discusses the fideicomiso, Mexico’s bank trust instrument that in one form or another has been in place since 1937. After real estate is put in a fideicomiso, today the trust holders can use the property as if it were their own.

In 1971, during the first year of the presidency of Luis Echeverría Álvarez, fideicomisos went through a major change that authorized the Foreign Ministry to grant banks and credit institutions authority to acquire trust real estate in the border or coastal zones for industrial and tourism use. And they were authorized to grant permits to foreigners for the exploitation and use of those properties through the issuance of a 30-year trust.

Since then, and for the most part to encourage foreign investment, the fideicomiso rules and regulations have been extended to allow beneficiaries a 50-year trust, which can be renewed by the interested party.

Furthermore, modern day fideicomisos, for homes, tourism developments, maquiladoras, industrial parks and other uses, have proven to be not only popular but too profitable, and the trust holders have demonstrated they are good “citizens.” This to the degree to debunk negative claims and concerns regarding sovereignty, foreign intervention and such, insofar as restricted zone properties have virtually been in the hands of foreigners for years.

Regarding property ownership in the restricted zone, amendments will also have to be made in other laws, codes and decrees, such as the Foreign Investment Law of 1993 (and its Regulation) that, in part, parrots the Constitution in Articles 10 and 10A. These reforms are addressed in the draft initiative.

Also considered is the need to eliminate the “Calvo Clause,” with respect to property ownership in the current restricted zones, in those documents and contracts where it may appear. The Calvo Clause is a provision under which foreign investors waive their rights to be protected by their national laws and accept the jurisdiction of the courts of the host country. In the case of Mexico, when the Calvo Clause is in force foreigners agree to consider themselves Mexican nationals with respect to their rights and obligations in Mexico, and they consent not to call upon their home governments to intervene on their behalf.

One legal chapter that quite probably will not be changed is Title Four, Article 119, of the General National Properties Law that governs Mexico’s Federal Maritime Land Zone. While this is not of great consequence, it is important to know that shoreline and beach property up to 20 meters inland from the mean high tide line is federal property. And while concessions can be obtained for use of the land adjacent to property owned (or held through a fideicomiso) by an individual or company, this 20-meter Federal Maritime Land Zone is public domain.

Finally, as to restricted zone trusts currently held by foreign investors, and Mexican companies with an admission of foreigners clause in their trust agreements, a closing provisional clause in the bill notes that they will be able to acquire ownership of their properties when this decree goes into effect, in accordance with the terms of the new and applicable legislation.

All of these issues are discussed and contemplated in the draft legislation now before the two committees of the Mexican Senate, and the broadened sponsorship of the bill suggests that this time the legislation might move forward. Still, in Mexico almost everything takes longer than one was told to expect.

As for Senator Castelo, he said that approval of this initiative to allow foreigners ownership of land in today’s “restricted zone” would bring in investment that creates much needed jobs, plus it would promote Mexico’s competitiveness. These positives plus shots in the arm for tourism, economic development, and maybe even optimistic publicity.

[1] “Mexico Might Allow Foreign Ownership of Coastal Property,” by Brian Flock, MexiData.info, March 9, 2009

[2] “Wrongdoing Claims Surface Quickly in Mexican Campaign,” by Barnard R. Thompson, MexiData.info, January 25, 2010

——————————

Barnard Thompson, editor of MexiData.info, has spent 50 years in Mexico and Latin America, providing multinational clients with actionable intelligence; country and political risk reporting and analysis; and business, lobbying, and problem resolution services.