By: Dai ChampsPuerto PeñascoIssue #393
Our real estate paradise is known by investors from all over the world
Every day there are people coming to Puerto Peñasco, not only for pleasure but also to do business. How is it said that in this port we could not have a mixture of both?
In one of the tourism developments at Sandy Beach we found a man from Mexico City, Daniel Arteaga, who was astonished by the development in Peñasco, "I was eager to know this place, in Mexico City Puerto Peñasco is getting to be known as a real estate paradise, that is why I am here, to invest together with my partners; they want to know more about this wonderful place" he commented.
Something that with out any doubt attracted our attention were the newspaper articles from national newspapers that Daniel Arteaga showed us, where Puerto Peñasco is causing great excitement in the city because of the value of the land.
In the "Reforma" newspaper we are as one of the top 5 favorite states for major investments in the tourism sector in the last six years. The first state is Guerrero with 22.6%, followed by Quintana Roo with 21.3%, Nayarit with 8%, Baja California with 7.4% and Sonora with 6.8%.
On the other hand, in the first six months of the present year, private investment in the tourism sector got as high as 2,064 million dollars (~$206m USD), the largest registered for a single period during the last six years. This number represents a growth of 13.2% with respect to the same period on the previous year, where 1,824 millions (~$182.4m USD) were invested, according to a report from the Secretary of Tourism (SECTUR).
Also, the "Reforma" newspaper published that Puerto Peñasco is growing like foam because of this comparison, where 56 millions (~$5.6m USD) where invested during the year 2001, while 260 millions (~$26m USD)where invested during 2005, and 1,200 millions (~$120m USD)are estimated between 2006 and 2009. Also, the value of the destination grew 953% in only seven years.
Its twenty kilometers of beach front are loaded with thirty two luxurious high rises, for a total of 2,615 units plus 3,600 more being constructed.
Reforma also outlines "Sandy Beach Resorts" as the first developer of the area, as it has various projects such as: Esmeralda Resorts, Casa Blanca and Princesa. The second development project is "Sonoran Resorts", where the state governors' family has 33% of the shares, and manages the Sonoran Sea, Sonoran Spa and Sonoran Sea Resorts.
In the next six years the largest investment will be the one from Mayan Palace, who will invest 1,000 million (~$100m USD) dollars, plus the selling of condominium and residential lots. This company will be the owner of the first international airport in Puerto Peñasco, an alternative airport will be built next to this tourist development.
The "land of gold" is how we are know called in Mexico City, due to the cost of land per meter square and to the luxurious developments that have a cost larger that in Acapulco. The average price for an apartment in Peñasco is 500, 000 dollars (~$50,000 USD) and it is estimated that by 2010 the price per meter square will be over 3,500 dollars ($350 USD).
Saturday, April 26, 2008
Lucrative Land Next To Docks Is For Sale
Several scale models and plans are ready for the project
By Ivan Bravo Lopez Issue #454
Since 1990 Puerto Peñasco has seen increase in the value of its land. Specifically the land located in the best areas and tourism zones along the beach have increased in both worth and price. The greed for obtaining a chunk of land belongs to the highest bidder, whether national or foreign. Anybody can own a part of this valuable coastal jewel along the Sea of Cortez.
There are many parties involved in the projects, such as landlords, builders, investors, international companies and even some fishermen and founders of Puerto Peñasco. Scale models and other samples have already been visualized by people that dream to become owners of the right to the use of the land near the docks. It is just a street away from the docks - and large five-star luxurious hotels will have the best ocean views, slides, and elevators that take them right to the docks where the yachts and vessels of the millionaire residents of the hotel stand ready. Others dream and fight over the right to use the dock space, and there are others that plan a seafood market in that high-traffic tourist area.
Many lots near the docks in the area where the shrimp vessels unload have already been sold. Now they belong to a few landlords who are waiting to see who will pay the most for that millionaire's neighborhood. The construction of condominiums in that tourist hotspot is already a reality. Year after year thousands of fishermen have used that area to unload their sea products and to refuel, but times have changed, and the blueprints and projects thought out by many will soon become reality. In just a couple of years the economic impact of tourism will make the fishing industry here disappear. It once was the economic pillar of this port and it helped feed thousands of families in Puerto Peñasco.
Tomas Espinoza Sesma, Director of Municipal Fishing Affairs mentioned that he is paying close attention to the sale of rights to the docks and that he is not sure that there are people interested in that development. "We are watching the leasing of the docks very carefully. There are interested people from outside of the docks, in the street on this side, around Luis Encinas St. The Municipal government is also watching closely, to see if there are benefits to the fishermen and no one else," said the director of Fishing Affairs.
There are also the fishermen that have dedicated their lives to fishing. They mention that they have travelled to the capital to different dependencies of the federal government to obtain the valuable permits to operate in the docks area.
Alfonso Avilez Alatorre, President of the Fisherman's Group 'Youth Lost To The Sea' said that "In the trips that we made to the capital we have seen scale models of this area in the Department of Tourism Projects. We could see large hotels with elevators and everything. However, we want a commercial zone in which we fishermen are favored since we have spent our whole lives fishing, and we think we deserve it."
"To obtain a permit for the rights of use of the docks we need 36 thousand pesos (~ $3,360 USD). We are working very hard in this Association to gain favoritism," said Alfonso Avilez Alatorre. He also mentioned that "they are already cleaning up the lots; we don't think that they are doing that just to make them look nice, we believe they already have projects. Another issue is that there used to be a freezer on Benito Juarez Blvd, now this freezer has been destroyed and the lot is already for sale. In the talks that we had with Heriberto Renteria, he told us that he has had talks with Arabian investors interested in this area. They wish to build a luxurious hotel. We have to get ready; otherwise this part will be sold to investors as well."
Lastly, the fishermen pointed out that every one has a scale model of their dreams and tourism projects under their beds. The building of the condominiums will start shortly because the lots are already available and ready for sale.
By Ivan Bravo Lopez Issue #454
Since 1990 Puerto Peñasco has seen increase in the value of its land. Specifically the land located in the best areas and tourism zones along the beach have increased in both worth and price. The greed for obtaining a chunk of land belongs to the highest bidder, whether national or foreign. Anybody can own a part of this valuable coastal jewel along the Sea of Cortez.
There are many parties involved in the projects, such as landlords, builders, investors, international companies and even some fishermen and founders of Puerto Peñasco. Scale models and other samples have already been visualized by people that dream to become owners of the right to the use of the land near the docks. It is just a street away from the docks - and large five-star luxurious hotels will have the best ocean views, slides, and elevators that take them right to the docks where the yachts and vessels of the millionaire residents of the hotel stand ready. Others dream and fight over the right to use the dock space, and there are others that plan a seafood market in that high-traffic tourist area.
Many lots near the docks in the area where the shrimp vessels unload have already been sold. Now they belong to a few landlords who are waiting to see who will pay the most for that millionaire's neighborhood. The construction of condominiums in that tourist hotspot is already a reality. Year after year thousands of fishermen have used that area to unload their sea products and to refuel, but times have changed, and the blueprints and projects thought out by many will soon become reality. In just a couple of years the economic impact of tourism will make the fishing industry here disappear. It once was the economic pillar of this port and it helped feed thousands of families in Puerto Peñasco.
Tomas Espinoza Sesma, Director of Municipal Fishing Affairs mentioned that he is paying close attention to the sale of rights to the docks and that he is not sure that there are people interested in that development. "We are watching the leasing of the docks very carefully. There are interested people from outside of the docks, in the street on this side, around Luis Encinas St. The Municipal government is also watching closely, to see if there are benefits to the fishermen and no one else," said the director of Fishing Affairs.
There are also the fishermen that have dedicated their lives to fishing. They mention that they have travelled to the capital to different dependencies of the federal government to obtain the valuable permits to operate in the docks area.
Alfonso Avilez Alatorre, President of the Fisherman's Group 'Youth Lost To The Sea' said that "In the trips that we made to the capital we have seen scale models of this area in the Department of Tourism Projects. We could see large hotels with elevators and everything. However, we want a commercial zone in which we fishermen are favored since we have spent our whole lives fishing, and we think we deserve it."
"To obtain a permit for the rights of use of the docks we need 36 thousand pesos (~ $3,360 USD). We are working very hard in this Association to gain favoritism," said Alfonso Avilez Alatorre. He also mentioned that "they are already cleaning up the lots; we don't think that they are doing that just to make them look nice, we believe they already have projects. Another issue is that there used to be a freezer on Benito Juarez Blvd, now this freezer has been destroyed and the lot is already for sale. In the talks that we had with Heriberto Renteria, he told us that he has had talks with Arabian investors interested in this area. They wish to build a luxurious hotel. We have to get ready; otherwise this part will be sold to investors as well."
Lastly, the fishermen pointed out that every one has a scale model of their dreams and tourism projects under their beds. The building of the condominiums will start shortly because the lots are already available and ready for sale.
CEDO Initiates Naturarte Concept For Eco-Businesses
New Program assists and supports ecotourism enterprises in the Morua Wetlands
By Pedro Barraza ReyesIssue #452
To reinforce the projects related to ecotourism enterprises in the Morua Wetlands, the Center for Studies of Deserts and Oceans (CEDO) will start the development of a new concept, called Naturarte, a novel work plan being implemented to increase the productivity of the afore mentioned enterprises, said the investigator Alejandro Castillo of CEDO.
Naturarte is a novel concept which provides assistance to ecotourism companies with expertise in customer attention, marketing, English classes, websites, blogs and everything needed for the administration of the companies, said Castillo.
Right now the intent is that companies already operating at the Morua Wetlands - such as the kayak rental and "El Barco" (The Ship) restaurant of the Cooperativa Unica de Mujeres - can maximize profits in a short time. For that purpose the Naturarte assistance plan was implemented, directed by Francisco McManus, who has a licensee degree in Natural Resources Administration and a master's degree in Aquifer Business, said Castillo during his presentation of this new member of the Staff of CEDO.
McManus detailed his tasks in leading this project and assured that it is necessary to get maximum benefit from the 15 thousand visitors to this center in order to promote this kind of business. Creating new projects as well as promoting existing ones outside of our borders to attract new customers to those businesses - to that end they have resources close to 440,000 pesos (~$40k USD) as a fund to begin and develop this project.
The researcher pointed out that for full development of Naturarte they count on the invaluable collaboration of 20 volunteers from the University of Arizona as well as another volunteer from England who will provide support for the same concept.
All this collaboration effort will be coordinated by McManus, said Castillo, adding that all this aims to promote ecotourism by means of existing companies and new projects, as long as they are within of the guidelines of Naturarte concept, which come to aid and to enlarge the expectative of productivity for the companies located at the wetlands, he said.
By Pedro Barraza ReyesIssue #452
To reinforce the projects related to ecotourism enterprises in the Morua Wetlands, the Center for Studies of Deserts and Oceans (CEDO) will start the development of a new concept, called Naturarte, a novel work plan being implemented to increase the productivity of the afore mentioned enterprises, said the investigator Alejandro Castillo of CEDO.
Naturarte is a novel concept which provides assistance to ecotourism companies with expertise in customer attention, marketing, English classes, websites, blogs and everything needed for the administration of the companies, said Castillo.
Right now the intent is that companies already operating at the Morua Wetlands - such as the kayak rental and "El Barco" (The Ship) restaurant of the Cooperativa Unica de Mujeres - can maximize profits in a short time. For that purpose the Naturarte assistance plan was implemented, directed by Francisco McManus, who has a licensee degree in Natural Resources Administration and a master's degree in Aquifer Business, said Castillo during his presentation of this new member of the Staff of CEDO.
McManus detailed his tasks in leading this project and assured that it is necessary to get maximum benefit from the 15 thousand visitors to this center in order to promote this kind of business. Creating new projects as well as promoting existing ones outside of our borders to attract new customers to those businesses - to that end they have resources close to 440,000 pesos (~$40k USD) as a fund to begin and develop this project.
The researcher pointed out that for full development of Naturarte they count on the invaluable collaboration of 20 volunteers from the University of Arizona as well as another volunteer from England who will provide support for the same concept.
All this collaboration effort will be coordinated by McManus, said Castillo, adding that all this aims to promote ecotourism by means of existing companies and new projects, as long as they are within of the guidelines of Naturarte concept, which come to aid and to enlarge the expectative of productivity for the companies located at the wetlands, he said.
New Funding For Three Main Infrastructure Projects
Plans To Designate 400M Pesos To Roads, Electricity, and Water During 2008
Funding expands to support three main infrastructure projects
With a projected investment of 400 million pesos (~$36.8M USD) the Director of Public Works is planning to continue during 2008 the integral project of city paving and electrification and water supply to the new neighborhoods - as well as enlarge the city's drainage network to improve the city's image.
Marco David Rangel Lopez, director of the afore mentioned office, said that it cannot be doubted that among the priorities of Mayor Heriberto Renteria Sanchez is the unprecedented Paving Works Project, for which he is obtaining a package of Federal Government resources around 100 million pesos (~$9.2M USD).
Rangel Lopez said that they want to continue with the pavement work on another 20 avenues and boulevards, covering a surface of more than 700 thousand square meters, in addition to the package of streets repaired during this past year. If this project is accomplished in full, the percentage of paved streets in our city will rise from 18% to 40%.
Moreover within the projects for 2008, the Director of Public Works mentioned that they will include the installation of the drainage network for the northwest sector of the city with and investment close to 60 million pesos (~$5.5M USD).
At the same time they will work on the construction and maintenance of sidewalks at the main boulevards and avenues, not forgetting the purpose of improving the image of the old harbor sector where financial resources are designated foir around 90 million pesos of improvements (~$8.3M USD) according with the executive plan approved by the city council.
To continue with the electrification in the New Peñasco and San Rafael neighborhoods, it is an investment of at least 15 million pesos (~$1.38M USD) is designated for 2008, and it is also planned to attend to the delayed work on the water supply and they will also program to provide basic services.
He added that among the plans and projects for this year are actions for benefit of schools with the construction of classrooms, fences, tile roofs and to attend several requests channeled through the Sonorense Program of Social Participation (PASOS) and the Direction of Social Development.
He also added that currently they have a work plan with more than 200 projects of pavement works, urban improvement, basic services, schools and religious centers, that will be accomplished according with the flow of the municipal resources as well as with the resources assigned from the state and federal governments - and in some cases with assistance from credit entities.
Funding expands to support three main infrastructure projects
With a projected investment of 400 million pesos (~$36.8M USD) the Director of Public Works is planning to continue during 2008 the integral project of city paving and electrification and water supply to the new neighborhoods - as well as enlarge the city's drainage network to improve the city's image.
Marco David Rangel Lopez, director of the afore mentioned office, said that it cannot be doubted that among the priorities of Mayor Heriberto Renteria Sanchez is the unprecedented Paving Works Project, for which he is obtaining a package of Federal Government resources around 100 million pesos (~$9.2M USD).
Rangel Lopez said that they want to continue with the pavement work on another 20 avenues and boulevards, covering a surface of more than 700 thousand square meters, in addition to the package of streets repaired during this past year. If this project is accomplished in full, the percentage of paved streets in our city will rise from 18% to 40%.
Moreover within the projects for 2008, the Director of Public Works mentioned that they will include the installation of the drainage network for the northwest sector of the city with and investment close to 60 million pesos (~$5.5M USD).
At the same time they will work on the construction and maintenance of sidewalks at the main boulevards and avenues, not forgetting the purpose of improving the image of the old harbor sector where financial resources are designated foir around 90 million pesos of improvements (~$8.3M USD) according with the executive plan approved by the city council.
To continue with the electrification in the New Peñasco and San Rafael neighborhoods, it is an investment of at least 15 million pesos (~$1.38M USD) is designated for 2008, and it is also planned to attend to the delayed work on the water supply and they will also program to provide basic services.
He added that among the plans and projects for this year are actions for benefit of schools with the construction of classrooms, fences, tile roofs and to attend several requests channeled through the Sonorense Program of Social Participation (PASOS) and the Direction of Social Development.
He also added that currently they have a work plan with more than 200 projects of pavement works, urban improvement, basic services, schools and religious centers, that will be accomplished according with the flow of the municipal resources as well as with the resources assigned from the state and federal governments - and in some cases with assistance from credit entities.
Saturday, April 19, 2008
Investing In Mexico
Investment in Mexico
International Living.com
Mexico's Vibrant Economy and Strong Peso Make Investing in Mexico Particularly Safe
With its growing GDP, a higher level of foreign direct investment than any other Latin country, and a current political climate that is more pluralistic and open to investment than any other of the last seven decades, investing in Mexico today offers high rewards with limited risk.
The peso is strong. Direct foreign investment is at an all-time high. It all bodes well for your investment here. You don't have to worry about radical revaluation of the currency, or that social unrest will unseat the government. Mexico is well positioned for growth.
Why Investing in Mexico Makes so Much Sense Right Now
Investing in any foreign country comes with certain risks. There's the strength of the country's currency to consider, the health of its economy, its openness to foreign investment, its relative political stability, the transparency of its laws. In many places around the world, the risks are high in nearly all of these categories.
Expanding Global Trade Relations
Mexico shares more than a 2,000-mile border with the United States. Yet many people have strikingly outdated conceptions of Mexico. The fact is that since the passage of the North American Free Trade Agreement (NAFTA), Mexico has been, and continues to be, a major player in Western Hemisphere and world politics and economics.
Post-NAFTA Mexico boasts an incredibly resilient economic environment. In the 13 years NAFTA has been in effect, foreign investment has almost doubled, from $5-6 billion to $10-12 billion a year. In 2001, inflation in Mexico fell to a 30-year low, and the flow of foreign capital into the Mexican stock market rose more than 6%, helping make it the seventh best performing stock market on the planet. In 2002, Standard and Poor's and Fitch and Moody's upgraded Mexico's sovereign debt to investment grade, and foreign direct investment rose almost 11% over 2001 levels, totaling more than $30 billion in June of that year. And in 2003, JP Morgan added Mexico bonds to its Government Bond Index, making them attractive to institutional investors.
Also in February 2003, The Wall Street Journal published an article entitled "Mexico Real Estate Is a Haven for U.S. Institutional Investors." Here's an excerpt: "War anxieties abroad, sluggish returns at home, and Mexico's recent recognition as investment-grade by all three major U.S. credit-rating agencies are behind the surge of U.S. institutional cash seeking a haven in Mexican real estate. According to industry analysts in both countries, more than $1 billion has washed into Mexico from U.S. institutional investors over the past eight months, and a lot more is on the way."
Mexico's Strong Peso
Mexico's peso is strong and has remained so against the dollar over the last few years. The peso has been buoyed in part by the significant foreign investment in Mexico and also by recent capital flight from Argentina. A strong local currency bodes well if you're considering a direct investment in Mexico. You won't have to contend with the wild swings in property pricing that you might find elsewhere.
Infrastructure Improvements to Further Facilitate Mexican Investment, Trade, and Tourism
The last two presidents have seemed committed to allocating funds for new and expanded roads, ports, and telecommunication infrastructure. This goes hand in hand with increased privatization, which will allow concessions in the national airport network and the telecommunications sector. The idea is that all of those improvements will further encourage and facilitate commerce.Following in the footsteps of Acapulco and Cancún, the Costa Maya project is the newest government-backed tourism initiative. Located along the last undeveloped swath of Mexico's Caribbean coast, just north of Belize, this project is already attracting private investors--both large and small. A privately owned pier at Majahual is welcoming cruise ships, and work is underway to bring electricity and better roads to the region.
Why You Should Consider Investing in Mexico Real Estate
Although the Mexican government does not offer any direct incentives to promote investment in Mexico, there are many benefits to purchasing real estate in this country. The property taxes are miniscule compared with the U.S. and Canada, usually costing just a few hundred dollars per year. It is also very easy to be exempted from paying the capital gains tax--you just have to prove that you resided in the property for at least six months. The appreciation in many areas, especially on the coasts, can be very high, with 50% or more per annum being a realistic number. And above all, buying Mexican real estate is safe and easy, with more and more financing sources available to U.S. and Canadian residents through both U.S. and Mexican banks.
The Best Places in Mexico to Buy Real Estate (and Enjoy Life)
Wherever you go in Mexico, the friendly people will charm you, the natural beauty will seduce you, and the remarkably affordable cost of living will entice you to stay. As is true in any country, real estate in some areas is more affordable than in others. And different places, of course, appeal to different people. If you want extensive infrastructure, ease of access, an established expatriate community…you can have all that. On the other hand, if you're looking for a little slice of deserted beach away from it all, you can find that too…and all of it at surprisingly reasonable prices.
International Living.com
Mexico's Vibrant Economy and Strong Peso Make Investing in Mexico Particularly Safe
With its growing GDP, a higher level of foreign direct investment than any other Latin country, and a current political climate that is more pluralistic and open to investment than any other of the last seven decades, investing in Mexico today offers high rewards with limited risk.
The peso is strong. Direct foreign investment is at an all-time high. It all bodes well for your investment here. You don't have to worry about radical revaluation of the currency, or that social unrest will unseat the government. Mexico is well positioned for growth.
Why Investing in Mexico Makes so Much Sense Right Now
Investing in any foreign country comes with certain risks. There's the strength of the country's currency to consider, the health of its economy, its openness to foreign investment, its relative political stability, the transparency of its laws. In many places around the world, the risks are high in nearly all of these categories.
Expanding Global Trade Relations
Mexico shares more than a 2,000-mile border with the United States. Yet many people have strikingly outdated conceptions of Mexico. The fact is that since the passage of the North American Free Trade Agreement (NAFTA), Mexico has been, and continues to be, a major player in Western Hemisphere and world politics and economics.
Post-NAFTA Mexico boasts an incredibly resilient economic environment. In the 13 years NAFTA has been in effect, foreign investment has almost doubled, from $5-6 billion to $10-12 billion a year. In 2001, inflation in Mexico fell to a 30-year low, and the flow of foreign capital into the Mexican stock market rose more than 6%, helping make it the seventh best performing stock market on the planet. In 2002, Standard and Poor's and Fitch and Moody's upgraded Mexico's sovereign debt to investment grade, and foreign direct investment rose almost 11% over 2001 levels, totaling more than $30 billion in June of that year. And in 2003, JP Morgan added Mexico bonds to its Government Bond Index, making them attractive to institutional investors.
Also in February 2003, The Wall Street Journal published an article entitled "Mexico Real Estate Is a Haven for U.S. Institutional Investors." Here's an excerpt: "War anxieties abroad, sluggish returns at home, and Mexico's recent recognition as investment-grade by all three major U.S. credit-rating agencies are behind the surge of U.S. institutional cash seeking a haven in Mexican real estate. According to industry analysts in both countries, more than $1 billion has washed into Mexico from U.S. institutional investors over the past eight months, and a lot more is on the way."
Mexico's Strong Peso
Mexico's peso is strong and has remained so against the dollar over the last few years. The peso has been buoyed in part by the significant foreign investment in Mexico and also by recent capital flight from Argentina. A strong local currency bodes well if you're considering a direct investment in Mexico. You won't have to contend with the wild swings in property pricing that you might find elsewhere.
Infrastructure Improvements to Further Facilitate Mexican Investment, Trade, and Tourism
The last two presidents have seemed committed to allocating funds for new and expanded roads, ports, and telecommunication infrastructure. This goes hand in hand with increased privatization, which will allow concessions in the national airport network and the telecommunications sector. The idea is that all of those improvements will further encourage and facilitate commerce.Following in the footsteps of Acapulco and Cancún, the Costa Maya project is the newest government-backed tourism initiative. Located along the last undeveloped swath of Mexico's Caribbean coast, just north of Belize, this project is already attracting private investors--both large and small. A privately owned pier at Majahual is welcoming cruise ships, and work is underway to bring electricity and better roads to the region.
Why You Should Consider Investing in Mexico Real Estate
Although the Mexican government does not offer any direct incentives to promote investment in Mexico, there are many benefits to purchasing real estate in this country. The property taxes are miniscule compared with the U.S. and Canada, usually costing just a few hundred dollars per year. It is also very easy to be exempted from paying the capital gains tax--you just have to prove that you resided in the property for at least six months. The appreciation in many areas, especially on the coasts, can be very high, with 50% or more per annum being a realistic number. And above all, buying Mexican real estate is safe and easy, with more and more financing sources available to U.S. and Canadian residents through both U.S. and Mexican banks.
The Best Places in Mexico to Buy Real Estate (and Enjoy Life)
Wherever you go in Mexico, the friendly people will charm you, the natural beauty will seduce you, and the remarkably affordable cost of living will entice you to stay. As is true in any country, real estate in some areas is more affordable than in others. And different places, of course, appeal to different people. If you want extensive infrastructure, ease of access, an established expatriate community…you can have all that. On the other hand, if you're looking for a little slice of deserted beach away from it all, you can find that too…and all of it at surprisingly reasonable prices.
Thursday, April 17, 2008
Possible Pemex Reform
Mexico's Calderon Attempts Oil Reform
Oxford Analytica 04.11.08, 6:00 AM ET
Mexico's President Felipe Calderón on April 8 sent an ambitious oil reform to the Senate. If approved, reform of state oil monopoly Pemex should attract private investment--domestic and foreign. However, approval probably will face legal challenges and political resistance--both in parliament and on the streets.
Government moves to liberalize Pemex had been awaited for weeks. The bill sent to the Senate on April 8 is ambitious enough to boost oil production and reserves through increased partnerships and contracts with other energy companies without seeking to amend the constitution. It would also allow Pemex to become more operationally and administratively autonomous.
Political savvy.
Calderón showed his political experience--particularly as a parliamentarian--when preparing and presenting reforms:
--As he lacks a working majority in Congress, the government negotiated beforehand with the center-left Institutional Revolutionary Party (PRI), a successful strategy when pursuing fiscal reform.
--Unless political developments force its leaders radically to change position, most PRI legislators probably will support the government. Publicly, PRI chiefs will criticize the proposal and seek amendments, while also arguing that it represents progress and deserves support.
--Calderón himself sent the legislation, staking his own political capital--he could have sent it through legislators from his center-right National Action Party (PAN).
No constitutional hurdle.
No constitutional change was proposed, but several laws were modified, the most important of which regulates Pemex's operations. Therefore, a simple majority in Congress can approve it (not the two-thirds required for constitutional changes). This makes acceptance easier for the PRI leadership, which had ruled out supporting changing the constitution (that gives the state exclusive oil ownership)
--The proposal was sent to the Senate, which has fewer members and is easier to negotiate with. The PAN has 52 of 128 senators, so needs only 13 additional votes. The PRI has 33 senators and the National Alliance Party (PANAL), which supports Calderón, one. Support from the Green Party (six senators) can also be negotiated. The other three parties, most important the center-left Party of the Democratic Revolution (PRD), follow defeated presidential candidate Andres Manuel Lopez Obrador. The government probably will not try to negotiate with them.
--Senate approval would create momentum in the Chamber of Deputies, where the PAN has 206 of 500 seats (the PRI has 104, PANAL nine, the Green Party 19, and a small party with four deputies may support Calderón). The PRD and its allies hold 158 seats.
Contract tweaking.
The most significant and controversial change the government seeks would allow Pemex to establish agreements to pay contractors according to performance. This is a proxy for risk-sharing deals, which formally remain forbidden:
--No Pemex partner could expect a share in oil discovered or extracted.
--New contracts are expected to allow Pemex to establish joint ventures that would facilitate exploitation of deep-sea oil deposits, which requires technology that Pemex largely lacks.
While the government would have preferred risk-sharing contracts, this is unacceptable to many PRI members.
Refinery construction.
Another crucial change would allow companies other than Pemex to build and manage oil refineries, with Pemex keeping full ownership of output:
--The government thus avoids the massive investment needed to build them, while slashing gasoline imports. Pemex currently imports 40% of gasoline products, selling them at a loss.
--The government estimates three new refineries being built over the next decade.
Greater autonomy.
Additionally, Pemex would be allowed a separate legal framework for contracts, procurement and operations from that regulating the rest of government, allowing greater managerial independence and more flexibility to reinvest profits. Additionally, the company will face a gradually reducing tax burden.
Citizen bonds.
Calderón also announced that Pemex would issue "citizen bonds"-- debt with yield tied to company performance. The main aim probably is to create a public perception of being a stakeholder in the company, rather than helping Pemex finance operations.
Lopez Obrador offensive.
Lopez Obrador is expected to attack the government, which he has sought to destabilize since it took office. Pemex represents his best chance to do this, as for many Mexicans it is a nationalist icon:
--Claiming repeatedly that the administration aims to "privatize" the company, he has staked political capital on derailing liberalization, however timid.
--He has organized "oil defense brigades" that probably will block infrastructure and, crucially, the Senate and the Chamber of Deputies, to protest against the proposal and obstruct legislators.
Oxford Analytica 04.11.08, 6:00 AM ET
Mexico's President Felipe Calderón on April 8 sent an ambitious oil reform to the Senate. If approved, reform of state oil monopoly Pemex should attract private investment--domestic and foreign. However, approval probably will face legal challenges and political resistance--both in parliament and on the streets.
Government moves to liberalize Pemex had been awaited for weeks. The bill sent to the Senate on April 8 is ambitious enough to boost oil production and reserves through increased partnerships and contracts with other energy companies without seeking to amend the constitution. It would also allow Pemex to become more operationally and administratively autonomous.
Political savvy.
Calderón showed his political experience--particularly as a parliamentarian--when preparing and presenting reforms:
--As he lacks a working majority in Congress, the government negotiated beforehand with the center-left Institutional Revolutionary Party (PRI), a successful strategy when pursuing fiscal reform.
--Unless political developments force its leaders radically to change position, most PRI legislators probably will support the government. Publicly, PRI chiefs will criticize the proposal and seek amendments, while also arguing that it represents progress and deserves support.
--Calderón himself sent the legislation, staking his own political capital--he could have sent it through legislators from his center-right National Action Party (PAN).
No constitutional hurdle.
No constitutional change was proposed, but several laws were modified, the most important of which regulates Pemex's operations. Therefore, a simple majority in Congress can approve it (not the two-thirds required for constitutional changes). This makes acceptance easier for the PRI leadership, which had ruled out supporting changing the constitution (that gives the state exclusive oil ownership)
--The proposal was sent to the Senate, which has fewer members and is easier to negotiate with. The PAN has 52 of 128 senators, so needs only 13 additional votes. The PRI has 33 senators and the National Alliance Party (PANAL), which supports Calderón, one. Support from the Green Party (six senators) can also be negotiated. The other three parties, most important the center-left Party of the Democratic Revolution (PRD), follow defeated presidential candidate Andres Manuel Lopez Obrador. The government probably will not try to negotiate with them.
--Senate approval would create momentum in the Chamber of Deputies, where the PAN has 206 of 500 seats (the PRI has 104, PANAL nine, the Green Party 19, and a small party with four deputies may support Calderón). The PRD and its allies hold 158 seats.
Contract tweaking.
The most significant and controversial change the government seeks would allow Pemex to establish agreements to pay contractors according to performance. This is a proxy for risk-sharing deals, which formally remain forbidden:
--No Pemex partner could expect a share in oil discovered or extracted.
--New contracts are expected to allow Pemex to establish joint ventures that would facilitate exploitation of deep-sea oil deposits, which requires technology that Pemex largely lacks.
While the government would have preferred risk-sharing contracts, this is unacceptable to many PRI members.
Refinery construction.
Another crucial change would allow companies other than Pemex to build and manage oil refineries, with Pemex keeping full ownership of output:
--The government thus avoids the massive investment needed to build them, while slashing gasoline imports. Pemex currently imports 40% of gasoline products, selling them at a loss.
--The government estimates three new refineries being built over the next decade.
Greater autonomy.
Additionally, Pemex would be allowed a separate legal framework for contracts, procurement and operations from that regulating the rest of government, allowing greater managerial independence and more flexibility to reinvest profits. Additionally, the company will face a gradually reducing tax burden.
Citizen bonds.
Calderón also announced that Pemex would issue "citizen bonds"-- debt with yield tied to company performance. The main aim probably is to create a public perception of being a stakeholder in the company, rather than helping Pemex finance operations.
Lopez Obrador offensive.
Lopez Obrador is expected to attack the government, which he has sought to destabilize since it took office. Pemex represents his best chance to do this, as for many Mexicans it is a nationalist icon:
--Claiming repeatedly that the administration aims to "privatize" the company, he has staked political capital on derailing liberalization, however timid.
--He has organized "oil defense brigades" that probably will block infrastructure and, crucially, the Senate and the Chamber of Deputies, to protest against the proposal and obstruct legislators.
Wednesday, April 16, 2008
Positive News For Two Projects
Tuesday, Apr. 15, 2008
Strategic Capital Solutions Affiliate Agrees to Acquire Equity Interest in Luxury Resort Development Project in Puerto Penasco, Mexico
SCS Expands Its Reach Throughout Latin America
NEW YORK — SCS-Strategic Capital Solutions, LLC ("SCS") (www.strategiccapitalsolutions.com) today announced the signing of an agreement by its affiliated real estate investment group for the acquisition of a significant equity interest in the luxury resort development project known as "Villa Cortez" located in Puerto Penasco (Rocky Point), Sonora, Mexico.
The agreement is subject to certain conditions, including the completion of a construction loan for the first phase to be provided by SCS and the procurement of an experienced hotel management group to operate the project. Several management groups have expressed interest. No Further details were disclosed.
"There is no comparable development currently within the Puerto Penasco market. Design development has been completed, engineering work is virtually complete, and preliminary site preparation has commenced. We believe Villa Cortez is a unique project due to its pristine location, relatively undeveloped surrounding areas, and prime oceanfront location," said Edward O. Mehrfar, Senior Managing Director of SCS.
Villa Cortez will consist of five buildings spread over a 34-acre parcel, with 600+ lineal feet of beachfront. The first building, which is almost sold out, consists of luxury condominium residences that are expected to be managed and branded by an international hotel operator. The remaining buildings will feature ocean views, transitional resort architecture with a Mexican flair, cobblestone roads, extensive walking paths, a spectacular world-class pool area, and spa and banquet facilities - in a secure, guard-gated environment.
"This transaction highlights our commitment towards sponsoring and financing quality projects in Mexico, and throughout Latin America," says Daniel Leski, senior member of the SCS business development team. "We believe that the Latin American markets still offer tremendous investment opportunities."
ABOUT SCS-STRATEGIC CAPITAL SOLUTIONS, LLC
SCS specializes in providing competitive financing solutions for commercial transactions and real estate projects worldwide. An acknowledged leader in bridge lending and special situations financings, the SCS team includes attorneys, investment bankers, and analysts. SCS has the experience to handle basic transactions promptly, and the passion to solve the most complex.
SCS-Strategic Capital Solutions, LLC Edward O. Mehrfar, Managing Member 212-379-1250 info@strategiccapitalsolutions.com www.strategiccapitalsolutions.com
Omega Annouces an International Joint Venture Development With BBB Development in Puerto Penasco, Mexico
April 09, 2008: 04:07 PM EST
Omega Commercial Finance Corp. (OTCBB: OCFN), a high/yield commercial real estate finance company that specializes in lending to middle market borrowers, is announcing a joint venture development with BBB Developments. Jon S. Cummings IV, President and CEO, has executed a Joint Venture LOI with Chris Crane of BBB Developments. The project called Los Corrales Condominiums is a 308 unit direct ocean and beach front condominium development located in Puerto Penasco, Mexico just 4 hours south of the Arizona border, in the free trade zone also known as the Gulf of California/Sea of Cortez.
Omega has been engaged for two years to arrange the initial construction and land "take-out" financing for BBB Developments. Despite the lack of interest by Omega in the US condominium market, this opportunity has opened their eyes to the strong international resort destination market, specifically in Puerto Penasco. Lisa-Babbage Jackson, Omega's real estate analyst and board member with over 25 yrs of expertise in the real estate industry, was presented a feasibility report that had a quote from a recently published article by the Wharton School of Business stating, "The real estate boom is under way in Latin America -- with Mexico being the region's biggest winner." This boom is evidenced in part by Marriott Hotels announcing a newly planned development of a 4-diamond/star hotel just minutes away from the Los Corales site and Puerto-Penasco (Rocky Point) announcing the opening in 2009 of international flights from major cities.
Omega presented to Chris Crain the opportunity for a joint venture rather than the traditional financing structure. Omega will be responsible for the $61 million construction costs and receive 45% of the net profit from the sales. This was a "No Brainer" for Omega, considering 108 of the units are pre-sold with hard contracts in place which represent $38 million in sales. BBB Development has been self-funding this operation from their own capital and groups of personal friends and family members. BBB Developments acquired the property from the Godoy family for $11.4 million through seller financing, also increasing the property's market value from $12 million to a recently appraised value of $18 million. Omega estimates generating a two -year annualized IRR of 25% or $39.5 million in net profits. Omega anticipates construction to start once they have their overall high/yield commercial real estate credit facility in place within the next 30 to 90 days. Jon S. Cummings III, the Chairman of Omega, has noted that, "We believe this will benefit our shareholders both over the near and far term while generating attractive returns. In addition, the joint venture is expected to generate significant capital to redeploy into supplementary high/yield commercial real estate financing opportunities."
Safe Harbor Statement: The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain of the statements contained herein, which are not historical facts, are forward-looking statements with respect to events, the occurrence of which involve risks and uncertainties. These forward-looking statements may be impacted, either positively or negatively, by various factors. Information concerning potential factors that could affect the Company is detailed from time to time in the Company's reports filed with the Securities and Exchange Commission. Contact:Omega Commercial Finance Corp.(305) 677-0306
Strategic Capital Solutions Affiliate Agrees to Acquire Equity Interest in Luxury Resort Development Project in Puerto Penasco, Mexico
SCS Expands Its Reach Throughout Latin America
NEW YORK — SCS-Strategic Capital Solutions, LLC ("SCS") (www.strategiccapitalsolutions.com) today announced the signing of an agreement by its affiliated real estate investment group for the acquisition of a significant equity interest in the luxury resort development project known as "Villa Cortez" located in Puerto Penasco (Rocky Point), Sonora, Mexico.
The agreement is subject to certain conditions, including the completion of a construction loan for the first phase to be provided by SCS and the procurement of an experienced hotel management group to operate the project. Several management groups have expressed interest. No Further details were disclosed.
"There is no comparable development currently within the Puerto Penasco market. Design development has been completed, engineering work is virtually complete, and preliminary site preparation has commenced. We believe Villa Cortez is a unique project due to its pristine location, relatively undeveloped surrounding areas, and prime oceanfront location," said Edward O. Mehrfar, Senior Managing Director of SCS.
Villa Cortez will consist of five buildings spread over a 34-acre parcel, with 600+ lineal feet of beachfront. The first building, which is almost sold out, consists of luxury condominium residences that are expected to be managed and branded by an international hotel operator. The remaining buildings will feature ocean views, transitional resort architecture with a Mexican flair, cobblestone roads, extensive walking paths, a spectacular world-class pool area, and spa and banquet facilities - in a secure, guard-gated environment.
"This transaction highlights our commitment towards sponsoring and financing quality projects in Mexico, and throughout Latin America," says Daniel Leski, senior member of the SCS business development team. "We believe that the Latin American markets still offer tremendous investment opportunities."
ABOUT SCS-STRATEGIC CAPITAL SOLUTIONS, LLC
SCS specializes in providing competitive financing solutions for commercial transactions and real estate projects worldwide. An acknowledged leader in bridge lending and special situations financings, the SCS team includes attorneys, investment bankers, and analysts. SCS has the experience to handle basic transactions promptly, and the passion to solve the most complex.
SCS-Strategic Capital Solutions, LLC Edward O. Mehrfar, Managing Member 212-379-1250 info@strategiccapitalsolutions.com www.strategiccapitalsolutions.com
Omega Annouces an International Joint Venture Development With BBB Development in Puerto Penasco, Mexico
April 09, 2008: 04:07 PM EST
Omega Commercial Finance Corp. (OTCBB: OCFN), a high/yield commercial real estate finance company that specializes in lending to middle market borrowers, is announcing a joint venture development with BBB Developments. Jon S. Cummings IV, President and CEO, has executed a Joint Venture LOI with Chris Crane of BBB Developments. The project called Los Corrales Condominiums is a 308 unit direct ocean and beach front condominium development located in Puerto Penasco, Mexico just 4 hours south of the Arizona border, in the free trade zone also known as the Gulf of California/Sea of Cortez.
Omega has been engaged for two years to arrange the initial construction and land "take-out" financing for BBB Developments. Despite the lack of interest by Omega in the US condominium market, this opportunity has opened their eyes to the strong international resort destination market, specifically in Puerto Penasco. Lisa-Babbage Jackson, Omega's real estate analyst and board member with over 25 yrs of expertise in the real estate industry, was presented a feasibility report that had a quote from a recently published article by the Wharton School of Business stating, "The real estate boom is under way in Latin America -- with Mexico being the region's biggest winner." This boom is evidenced in part by Marriott Hotels announcing a newly planned development of a 4-diamond/star hotel just minutes away from the Los Corales site and Puerto-Penasco (Rocky Point) announcing the opening in 2009 of international flights from major cities.
Omega presented to Chris Crain the opportunity for a joint venture rather than the traditional financing structure. Omega will be responsible for the $61 million construction costs and receive 45% of the net profit from the sales. This was a "No Brainer" for Omega, considering 108 of the units are pre-sold with hard contracts in place which represent $38 million in sales. BBB Development has been self-funding this operation from their own capital and groups of personal friends and family members. BBB Developments acquired the property from the Godoy family for $11.4 million through seller financing, also increasing the property's market value from $12 million to a recently appraised value of $18 million. Omega estimates generating a two -year annualized IRR of 25% or $39.5 million in net profits. Omega anticipates construction to start once they have their overall high/yield commercial real estate credit facility in place within the next 30 to 90 days. Jon S. Cummings III, the Chairman of Omega, has noted that, "We believe this will benefit our shareholders both over the near and far term while generating attractive returns. In addition, the joint venture is expected to generate significant capital to redeploy into supplementary high/yield commercial real estate financing opportunities."
Safe Harbor Statement: The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain of the statements contained herein, which are not historical facts, are forward-looking statements with respect to events, the occurrence of which involve risks and uncertainties. These forward-looking statements may be impacted, either positively or negatively, by various factors. Information concerning potential factors that could affect the Company is detailed from time to time in the Company's reports filed with the Securities and Exchange Commission. Contact:Omega Commercial Finance Corp.(305) 677-0306
Wednesday, April 2, 2008
Puerto Peñasco: Next Stop For Huge Cruiseliners?
By Ivan Bravo LopezIssue #449
There is a possibility that a harbor to accommodate large tourist cruises will be built in Puerto Peñasco, said the Federal Tourism Secretary Rodolfo Elizondo Torres, during a work tour he had on Tuesday 20 of November in this harbor.
After performing the official ceremony to inaugurate the SARE offices, the Tourism and Bussiness Center at the City Hall, in an interview for this newspaper, the Tourism Secretary mentioned that several conversations had been held with the Governor of Sonora Eduardo Bours Castelo to study the possibility to bring to this market large tourist cruise ships.
"We are thinking about the possibility to develop a harbor for cruisers, this is what we have been discussing with Governor Eduardo Bours, it is only an idea, so in simple terms we have to study it, see what possibilities are there, personally it seems to me a good option and we must follow the procedures to see if it is really convenient, to see how large an investment is necessary, what markets we must take into our aims", said Rodolfo Elizondo Torres, Tourism Secretary.
He also added that implementing casinos in Puerto Peñasco is viable, but nowadays it depends more than ever on the Mexican Congress to obtain authorization for their operations. He also recognized that is not necessary to install casinos to attract more tourism, since Puerto Peñasco has already on its way as a tourist development and the casinos will be only one more choice to offer to national and foreign tourist developers.
"In Mexico we already have the lottery, bingos, horse racing, and other types of gambling, I believe it should be formalized to exist a law which clearly states the legal framework for this issue. Casinos are not always the detonator for a tourism development, the development of Puerto Peñasco has already 'blasted off' and it will be only another option for tourists", he said.
On its own, Elizondo Torres pointed that the expansion of the checkpoint at the Sonoyta border with Lukeville will 'favour without a shadow of a doubt' the tourism in Puerto Peñasco, since tourists will avoid 4 or 5 hours of waiting in line to enter our country. "We need to invest more on the need of a transformation to get a more smooth flow and not to wait for things to be more complicated as they are now, is a project which does not depend exclusively on the Federal Government and the Federal government, because it s a bi-lateral project", said Elizondo Torres.
Finally, the Secretary of Tourism said that the creation of the international airport will be an extra boost for the economy, since it will allow entry in a more active market, and not only the frontier market, but it will give a different kind of growth to Puerto Peñasco.
There is a possibility that a harbor to accommodate large tourist cruises will be built in Puerto Peñasco, said the Federal Tourism Secretary Rodolfo Elizondo Torres, during a work tour he had on Tuesday 20 of November in this harbor.
After performing the official ceremony to inaugurate the SARE offices, the Tourism and Bussiness Center at the City Hall, in an interview for this newspaper, the Tourism Secretary mentioned that several conversations had been held with the Governor of Sonora Eduardo Bours Castelo to study the possibility to bring to this market large tourist cruise ships.
"We are thinking about the possibility to develop a harbor for cruisers, this is what we have been discussing with Governor Eduardo Bours, it is only an idea, so in simple terms we have to study it, see what possibilities are there, personally it seems to me a good option and we must follow the procedures to see if it is really convenient, to see how large an investment is necessary, what markets we must take into our aims", said Rodolfo Elizondo Torres, Tourism Secretary.
He also added that implementing casinos in Puerto Peñasco is viable, but nowadays it depends more than ever on the Mexican Congress to obtain authorization for their operations. He also recognized that is not necessary to install casinos to attract more tourism, since Puerto Peñasco has already on its way as a tourist development and the casinos will be only one more choice to offer to national and foreign tourist developers.
"In Mexico we already have the lottery, bingos, horse racing, and other types of gambling, I believe it should be formalized to exist a law which clearly states the legal framework for this issue. Casinos are not always the detonator for a tourism development, the development of Puerto Peñasco has already 'blasted off' and it will be only another option for tourists", he said.
On its own, Elizondo Torres pointed that the expansion of the checkpoint at the Sonoyta border with Lukeville will 'favour without a shadow of a doubt' the tourism in Puerto Peñasco, since tourists will avoid 4 or 5 hours of waiting in line to enter our country. "We need to invest more on the need of a transformation to get a more smooth flow and not to wait for things to be more complicated as they are now, is a project which does not depend exclusively on the Federal Government and the Federal government, because it s a bi-lateral project", said Elizondo Torres.
Finally, the Secretary of Tourism said that the creation of the international airport will be an extra boost for the economy, since it will allow entry in a more active market, and not only the frontier market, but it will give a different kind of growth to Puerto Peñasco.
Tuesday, April 1, 2008
Investment Properties Are Selling Again
Sales are up in Puerto Penasco, Finally! With the downturn in the United States Economy and the falling dollar; sales in Puerto Penasco have been slow up until the last two months. Prices have dropped and flattened out and buyers have stopped waiting and are coming back down and taking advantage of the lower prices. Baby boomers, now is the time to buy... If the trend stays on the upswing prices will definitely start climbing again. I have buyers scheduled to come into town the next three weeks from Canada, Oregon, and Oklahoma. The word is out! Puerto Penasco is a safe place to invest and the prices aren't going to get any better than now. If you are on the fence it is time to really consider an exploratory trip down south and see why Puerto Penasco is Mexico's fastest growing home market.
Coastal Highway
The coastal highway north of town is moving again at full speed. Most of the road is complete and the engineers are hard at work in the dune area laying a foundation to get ready for pavement on a desolate and silty stretch located between Puerto Penasco and El Golfo Santa Clara. I will have more information on the progress soon and I will keep you updated as to when it is expected to be ready for use. Also, the lower coastal highway is being cut into the earth down by Deseboque. Both of these highways will bring a tremendous increase in visitor traffic into Puerto Penasco from both Mexico and California.
PPAREA Declines Merger
Today the Puerto Penasco Area Real Estate Association (PPAREA) declined the proposed merger between the local AMPI chapter with PPAREA. The institutional members decided if the AMPI companies wanted to be on the local Flex MLS system they would have to join the Broker - Agent based organization PPAREA. For the consumer this is an important decision by PPAREA not to merge. This should encourage the non PPAREA companies to join and represent their clients to their fullest potential by being on the Flex MLS. This link gives a complete list of professional organizations on the Flex MLS http://www.rockypointmultilist.com/ . Please take a moment and see who is on the list of MLS professionals, especially if you are thinking of buying or selling a home. Please do not sell yourself short...
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