posted November 03, 2003 11:49         

NOPALÓ, Mexico - Slowly but surely, acre by acre, Mexico's
Baja Peninsula is becoming an American colony.

For Sale" signs
are sprouting all over the 800-mile-long peninsula,
offering thousands of beachfront properties. Americans are
snapping them up. They have already created communities
where the dollar is the local currency, English the main
language and Americans the new immigrants transforming an
old culture.

"Everything's for sale, every lot you can imagine," said
Alfonso Gavito, director of a cultural institute in La Paz,
the capital of Baja California Sur, a state with 400,000
citizens and some of the last undeveloped beaches in North
America. "It's like 20 years of changes have happened in
three months."

This new land rush, involving billions of dollars, tens of
thousands of Americans, and hundreds of miles of coastline,
is gaining speed despite the fact that Mexico's
Constitution bars foreigners from directly owning land by
the sea.

Mexico's government wants foreign capital as much as
Americans want a house on the beach - maybe more. So it
worked around the Constitution. In 1997, it changed the law
to allow foreign ownership through locally administered
land trusts. A Mexican bank acts as trustee, the foreigner
its beneficiary.

It took about four years before that new system worked
smoothly. But now, most often, it does. One result has been
a boom in migration, speculation and permanent vacation.
"It's human greed - it's human nature," said David
Halliburton, who owns a hotel outside Cabo San Lucas, on
Baja's southern tip, where uncontrolled growth already
strains the social fabric. "The amount of money coming in
here through overzealous developers and buyers is
staggering."

Baja is closer by land and air to the United States than it
is to the rest of Mexico; state officials recorded more
than 30 million trips by Americans who spent well over $1
billion last year. They say they have no idea how many
Americans are living in Baja today, because a certain
number are illegal immigrants who never register their
presence. Anecdotal and statistical evidence suggests that
the number is more than 100,000, probably far more, and
growing fast since the Sept. 11 attacks and the souring of
the economy in the United States two years ago.

"Since 2001, we have seen a boom in real estate sales, and
the full-time population of Americans is growing rapidly,"
said Tony Colleraine, an American in San Felipe, about 160
miles southeast of San Diego. He said about one-quarter of
the town's roughly 30,000 residents were Americans, many of
whom want to "get away from the regulations and rhetoric,
and get out of the bull's-eye" in the United States.

In Rosarito, an hour's drive south of the United States
border, about one-quarter of the 55,000 residents are
Americans. "An increasing number of Americans are moving
here to escape their government's policies and the costs of
living," said Herb Kinsey, a Rosarito resident with roots
in the United States, Canada and Germany. "They find a
higher standard of living and a greater degree of freedom."

At least 600,000 Americans - again, an acknowledged
undercount based on government records - are permanent
residents of Mexico. That is by far the largest number of
United States citizens living in any foreign country.

Americans living throughout Baja say their new neighbors
include professionals in their 30's and 40's putting down
roots, not just retirees in recreational vehicles. In
Rosarito, the new home buyers include lawyers and members
of the military who commute across the border to San Diego,
where housing costs are about five times higher. A pleasant
house by the Pacific in Rosarito can cost less than
$150,000; property taxes are about $75 a year.

The Americans living in Rosarito set up a municipal office
in April. Two members are Ed Jones, an entertainer, and
Rita Gullicson, a teacher.

Americans "want to claim Baja as part of the United States,
and they always have," Ms. Gullicson said. Mr. Jones
finished her thought, saying, "And now they are doing it
with money."

Baja's future, Mexican officials say, lies in American land
investment. The government strongly promotes foreign direct
investment, which is the only reliable source of economic
growth in Mexico.

Here in the empty streets of Nopaló, the future is coming
on fast. A totally American town is about to be built.

The site of a failed government-backed tourist development,
Nopaló, which means "place of vipers," lies just outside
the town of Loreto, founded in 1697, population 11,000.
American and Canadian developers plan to build 5,000 new
homes for 12,000 fellow citizens.

Their master plan depicts a particularly affluent suburb,
with houses selling for up to $2 million each. The
developers plan to break ground in January. They envision a
$2 billion investment over 15 years.

"People will come by the hundreds of thousands" to Baja,
said one of the developers, David Butterfield. "Mexico
gives you an opportunity to build something you cannot
build in the U.S. or Canada today. You cannot build great
things in America today. Regulations and litigation prevent
change."

There are limits to change in Baja, too. They are set by
nature. It rains five inches a year or less in many parts
of the peninsula. A barrel of water here is effectively
worth more than a barrel of oil, and it takes many millions
of gallons to sustain a golf course, much less a suburb.

There is no drinking water in Loreto - it is piped in from
16 miles away - and no place for thousands of construction
and service workers to live. Many Mexicans wonder if the
new community will truly be the "sustainable development"
its backers promise. "I'm not sure there's anyplace in the
modern world that's sustainable," Mr. Butterfield said. "I
hope we're going to create one."

Homero Davis, Loreto's mayor, supports the project,
somewhat warily. "The quality of life is a moral issue
here," he said. "The culture is at stake. We don't want to
be like Cabo San Lucas," where hotels and condominiums have
swamped what was once a little village.

But that scale of development is precisely what Fonatur,
the federal agency that promotes tourism in Mexico, has in
mind for Loreto and the rest of Baja.

Fonatur, which conceived and built mega-resorts like
Cancún, envisions marinas for American yachts, four-star
hotels and fancy golf courses ringing the peninsula in a
plan called the Escalera Náutica, or Nautical Ladder, which
involves $210 million in public money and hopes for $1.7
billion in investment from developers.

"The whole premise of the Escalera Náutica is to create a
land rush, and I'm not sure that's good for anybody," said
Tim Means, who has lived in La Paz for 35 years and runs a
respected ecotourism outfit called Baja Expeditions.

Baja was isolated from the outside world until the
government paved a road through the peninsula in the 1970's
and 80's. The road connected Baja more closely to the
United States than to the Mexican mainland. That connection
is deepening as more and more Americans move here. So is a
sense of remoteness, of difference, from the rest of
Mexico.

"People on the mainland don't know we exist," said Doris
Johnson, the daughter of a Mexican mother and an American
father, who runs a hotel in Mulegé. "They ask, `Do they
speak Spanish in Baja? Do you need a passport to go there?'
"