Regional News Topics, the San Felipe Economy and more.....
...by Tony Colleraine .... contact
Sunday 27 June
As I mentioned on May 16th, over a hundred dissatisfied house and land purchasers have contacted the Mexican Federal Consumer Protection Agency (PROFECO) and filed claims against several of the real estate developers in this region. Profeco has been attending meetings in San Felipe on Saturday mornings to take documentation of complaints from individuals who have not received the services and the property titles that are due them under the terms of their purchase contracts.
At yesterday's gathering, however, the meeting blew up as one of the people filing complaints with the agency reportedly berated the officials for the lack of progress. There was a lot of name-calling and the Profeco agents packed their bags, said they would cancel the next meeting that was scheduled for 17 July, and left town. One should never be discourteous to federal officials; they are doing a very difficult job and any loss of papers in a shuffle can set a case back for years! Be friendly and understanding with everyone you interact with. The Mexican culture is one of openness and friendliness and people will do whatever they can to help you if you get into trouble. You should understand that you are not singled out for slow treatment just because you are an American, even local citizens struggle with the paperwork and the bureaucracy in getting permits and approvals. In some cases, a small token of appreciation for help can work miracles.
As with all disputes in Mexico, it is unrealistic to expect that there will be rapid action on any matter of this type. Official investigations take months, sometimes years, to complete. Records must be researched in the state archives and the voluminous transcriptions of all legal documents prepared by the Notarios must be examined page-by-page. Even though computerization of records is being undertaken as part of the move away from physical paper, much of the documentation must still be obtained in the form of certified copies from the archives.
One thing that foreigners in San Felipe do not understand is that if you make a xerox copy of your fideicomiso, or of any receipt, for use as evidence in a complaint with a government agency, that copy will generally not be accepted unless it has been certified as being a true copy of the original. Typically, this means that you will have to make a trip to the Public Records office in Mexicali and will have to present your valid visa for identification. They will make the needed copies on their authorized machines and will stamp official seals and add the registrar's signature to each side of every page.
If you ever need a copy of your fideicomiso, for example to get the water company to install service to your house, you would be well advised to order several certified copies at the same time. You will eventually have a need for them. Certified copies are expensive (around $20-40 dollars each) but I estimate that during my time in San Felipe, I have needed six such copies for one agency or another. My advice is to visit Yolanda Tafoya at Yetmail and get her to order copies of your documents before you have a crisis.
A note for Arizona residents who prefer to come to San Felipe via the San Luis crossing: The US Customs and Border Patrol is working on a SENTRI lane there and they expect that it could be in operation around September. Make your application for a SENTRI pass now.
Quite surprisingly, another old press release for the Mi Casa del Mar development in San Felipe has been published again with a date of 28 June 2010. This press release ..>> is many years old and I had a note on it from Dave La Barre back on 5 May of this year. It is of historical interest only.
Wednesday 23 June
Sorry to be slow in posting. This job is very stressful at times. Some days I get 60-80 emails coming in from people who all want to complain about things (the usual topics - garbage, poor service, dirty hotel rooms, real estate problems, border crossings, crime in Mexico, more real estate problems, ripoffs here/there, earthquakes, hotel reservations, additional real estate problems, missing relatives.....you name it). When I can find some non-controversial topic, I will put a new article up.
To keep you going, here is a picture from our archives of the 1960's of the old movie theater on Av. Mar de Cortez between Bancomer and the Corona bar:
Wednesday 16 June
There was another earthquake, this time of magnitude 4.8, only 46 miles west of San Felipe in the mountains. It was felt by a few people but since it occurred during siesta time (at 3:32 p.m.) most effects went unnoticed. No damage has been reported.
The price of regular gasoline in the border region continues to be around 50 US cents/gallon cheaper in Mexico. Now the Ministry of Finance and Public Credit is considering that they should try to maintain parity with the US price to stop people coming across from California and loading up with cheap gas. This was tried some 3 years ago when the price differential rose to over $1.20/gallon during the rapid spike (and subsequent decline) in costs in the USA. There has already been an outcry from the unions that this will trigger an inflationary cycle in a time when there are insufficient jobs. My guess is that the matter will be dropped.
On another matter, however, the Mexican government is moving swiftly. Regulations go into effect next Monday to restrict excessive cash dealing in US dollars. The government has found that there is $10-25 billion dollars circulating in the economy that cannot be accounted for by normal commerce. It is presumed that the bulk of this cash is from money laundering. It is unlikely that the regulations will affect any Americans living in San Felipe; people with accounts at a local bank will be able to deposit up to $4000 dollars in cash monthly. Those without accounts will be able to change $300/day or $1500/month into pesos. Separate categories will be established for businesses, particularly if tourist-related, and those amounts will be much higher. Note that electronic transfers and normal commercial paper transactions are not affected by these new regulations. The target is cash transactions.
Monday 14 June
10:30 p.m. update - Another large earthquake, Magnitude 5.7, occurred about 9:30 p.m. this evening, this time in Southern California close to where Route 98 from Calexico joins Interstate 8 to San Diego. Reports of the shaking came in from throughout Southern California and Northern Baja. It was felt in San Felipe and some pictures hanging on the walls were jolted and skewed. No other apparent damage at this time.
Another moderate earthquake occurred just after midnight Monday on the Mexicali road, close to where the existing repairs are being made. Although it was widely felt in the Mexicali Valley, the Imperial Valley, Yuma, San Diego, Tijuana and Ensenada, we have no reports of shaking or damage in San Felipe.
This magnitude 4.7 quake is one in a series of aftershocks that are a consequence of the great M7.2 event on Easter day. This continued seismic activity is likely to go on for many months as the earth settles down and I would expect that even after the road repairs are done, the asphalt surface in this area, some 40 km south of Mexicali, will continue to be distorted and possibly broken by similar events.
For San Felipe, a disturbing new scientific survey on the survival of the Vaquita in the northern Gulf has recently been published. The Vaquita (Phocoena sinus) is a small, very shy porpoise that is only known to exist in the waters off and north of San Felipe. Around 10 years ago a survey indicated that some 600 individuals still survived but the data released from the latest survey made in 2008 is setting the number down to 250.
Vaquita caught in gill net
The Mexican government has made major efforts to stop the gill net fishing and has defined a "no fish" zone off San Felipe (where the breeding grounds of the Vaquita are found) and in the Biosphere reserve north of San Felipe. Commercial fishing licenses have been bought up and the ones that remain are supposed to use nets with escape hatches for the dolphin. Local fishermen complain that these new nets are much less efficient at catching fish and shrimp and they say their income has been reduced by over 50% as a result.
The ecology of San Felipe is important to us all and the fate of the Vaquita, and also the endangered Totoava, is of national and international importance. Pollution of the Sea of Cortez must be reduced and overfishing of the resources needs close attention. At the same time, unless we allow fishermen to go out and make limited catches, we will never get any relaible data on whether the stocks are increasing or dwindling. Tony Reyes used to speak eloquently on this subject - limited sport fishing in the northern Gulf would be the very best way to keep tabs on what was happening to our environment.
See the Vaquita article here..>> and one of our old pages on this ..>> and some old articles on the Totuava (totoaba)..>> and ..>> and ...>>
Thursday 10 June
I drove up to Mexicali last Friday and was surprised to see that there was relatively little work in progress on the road widening project around the junction with the Ensenada Road, 30 miles north of town. A couple of small road rollers were working and around 15 men were engaged on the structure for the new military checkpoint building. It seems that a few kilometers of the new pavement is finished but not open to traffic.
Work in progress on the military checkpoint building
When I got to Mexicali, I asked a friend to give me a rundown on what was going on. He made a call and then explained the contracting system to me: Contracts are awarded with specified payments made by the government each month provided the contractor stays on schedule. If the contractor is ahead of schedule, however, he waits for the payment to be made before starting the next section of road. In other words, the (fairly conservative) schedule must be followed and there is no incentive to complete work early. This is a great pity as it appears that the entire project could be finished faster and probably months of inconvenience to the traveling public could be eliminated over the life of the project. In any event, it would really help tourists if road sections were opened as soon as they were ready to eliminate as much driving on gravel roads as possible.
The road section around km40, where the Easter earthquake caused damage, is a mess. A lot of work is in progress there and the temporary gravel "hardpack" is deeply rutted. My car scraped bottom in a couple of places. I am assured that this will be corrected quickly. I was not comfortable driving at more than 10-15 mph on this section, but big 4WD trucks were flying past and kicking up all sorts of stones. Be very careful in this area, you could get a broken windshield!
km 40 road surface heading north - lots of ruts and loose gravel
One of my neighbors also gave me a report on the road south of Puertecitos to Bahia San Luis Gonzaga: Everything is wonderful down to El Huerfanito and maybe 3 miles further south. For the next 23 miles the road is very rough and a big truck with 4 WD is the best vehicle to make the journey.
Last weekend, 4-6 June, was the Baja 500 out of Ensenada. A good crowd of race spectators stayed in San Felipe and hotel occupancy was a respectable 70%. Ensenada reported 90% occupancy which surprised me. I would have thought that they would have been completely sold out. It seems that a lot of spectators must have camped out along the course. Tourism estimated that 100,000 people came to watch the race!
Thursday 3 June
Already the crowds of the Memorial Day weekend are a memory and the realization has set in that the end of the tourist season has arrived. True there will be a blip for July 4th but the long, hot, summer is just around the corner. I took a walk along Mar de Cortez today, the street one block inland from the Malecon where all the tourist shops are located. It is a very sorry sight. Many stores have already gone out of business as a result of the recession and now a second wave of closures is here as owners reluctantly face the realization that the summer season is not likely to be any better than it was last year. It is particularly disappointing to see merchandise being packed up into boxes and carried out to trucks and vans, and signs being taken down for some of San Felipe's premier startup stores that had offered a welcome relief from the ubiquitous T-shirts, blankets and fireworks. I know that many of these owners put a lot of energy, time and money into bringing new and exciting art and collectibles to this region and they must be feeling the same pangs of frustration and disappointment that I felt when I closed the Net office at Plaza Canela last December.
Probably one in four stores along the avenue is now closed. Even the fabled Beachcomber nightclub is up for sale. I stopped to get some amoxycillin and tylenol at a drug store - they had neither. It is too expensive to stock items that have a limited shelf life; the drug manufacturers will not take them back. Along the back streets, small hotels are offering special mid-week promotional rates - $450 (about 36 dollars) for a single room! It is just too expensive for travelers in this down economy, yet they cannot do it for less because of the expense of doing business in San Felipe.
Why do the local commerce and tourism officials not have a plan to increase travel and business here? For years I have pondered this and made suggestions at the interminable meetings that used to be held to promote the region.
Back in the 70's and 80's, even into the early 90's, camping, fishing and the outdoor experience was what brought people to San Felipe and made money for the town. Snowbirds came by the thousands from October to May and occupied every camping spot along the beaches. They were frugal but every penny they spent went into the local economy. The shrimp fishing industry was fantastic and San Felipe azuls set the standard on the Chicago futures market. During the summers, the fisherman was king and sportfishing in San Felipe was an experience that was coveted by every angler. Old Tony Reyes used to talk to me about the people who would make the pilgrimage here for a trip on his boat and when I brought the internet to town, his was one of the businesses that benefitted significantly from the international exposure.
Then came the real estate boom. The amount of money that could be made was so enormous that snowbird tourism, shrimping and fishing were absolutely insignificant. They only brought in a few million a year compared to hundeds of millions that was possible for land developments. The beachfront RV camps and parks disappeared almost overnight. Even El Dorado, which had been on track to become possibly the largest RV park in North America, changed direction. Unfortunately, most of the money did not stay in San Felipe. Take a stroll through downtown and you find that it is pretty much the way it was 20 years ago. In fact it may even have declined a bit, back then we had a movie theater.
San Felipe needs to attract new types of tourism. Possibly it needs to get back to some of its basics again. For the coming winter we need some RV parks to bring back the Snowbirds - decent places such as what used to exist at the Marina Resort and Cachanilla. We need to re-establish the connection with the Sea of Cortez for the visitor - maybe a daily ferry service to Puerto Penasco.
We need to face the realization that with border crossings becoming more and more time consuming, visitors from San Diego and LA are not going to be able to justify 14 or more hours driving for a weekend vacation. We need flights to San Felipe!
IF we had an airport with flights to San Diego and IF we had some decent meeting rooms, we could host small business conventions here. There are plenty of high-tech and biomedical research firms in Southern California that would jump at a secluded and safe place to hold workshops and San Felipe, with its isolation and military checkpoints, is very much a "gated community".
Tijuana has recently become a major player in the medical tourism field. People come from all over the USA to stay in a downtown hotel (with day trips to Rosarito) while they have various surgeries, dental and optical work done at half the price they pay at home. San Felipe could certainly attract visitors wanting dental work done who could have a weeks stay at a beachfront hotel while undergoing a crowning experience. After all, that is what I am doing here right now!
Tuesday 1 June 2010
It has been interesting to see how the Memorial Day weekend worked out. I talked to quite a few visitors, stopped at a few campos, and also have been getting plenty of follow-up emails. My general observation is that it has been a very successful weekend for the local businesses here in town. Liquor stores and food markets did well; beachfront condos and hotels did extremely well with essentially 100% (or more!) occupancy; waterfront restaurants offering value deals also did wonderful business. Trinket shops sold plenty of low-priced souvenirs but I was surprised by the number of comments that people made about the display of "poor taste" T-shirts sporting foul language. These may have been popular a few years ago but are definitely not the style that families with children want to be bombarded with when walking along the street.
Beachfront hotels like the Sanddollar (above) were extremely popular
Many places that were a block or two off the main drag were very quiet. There were less campers along the beaches this year - probably an indication that this demographic found it already too expensive to make the trip to San Felipe.
Comments on San Felipe and its standing as a place for a long weekend vacation were vey positive. The town was seen as being well cared for (garbage disposal is a notable exception!) and well secured by military and police patrols. However, almost universally, there were objections to the sectioning off of the Malecon for the Fiesta del Mar event. Visually, it looked like a bunch of old tents held together with yellow police "do-not-cross" tape; very unappealing. The fact that the organizers required you to pay admission to enter this tented-off area struck many visitors as the last straw. Even with an admission price of only a couple of dollars, a family group would not pay that price. Indeed, many people looked through the gaps in the tents and decided it was not for them. The open beaches with the pleasant evening breezes and a spectacular full moon rising was a far more satisfying experience.
Another general comment was that there are no dumpsters around San Felipe for depositing garbage in. This has always been a problem when we have a holiday weekend. I have seen departing families just dump their bags of trash on the side of the road out of frustration.
Another San Felipe tradition that has gone is the coco-locos at Reubens. Even though that establishment, and Kikis next door, was full with happy campers, the closing of the restaurant and bar, and the demise of the famous drink, will be missed.
The famous Reuben's sign
By noon on Monday, the majority of visitors had checked out and were on their way back home. Some reported very thorough searches at the military checkpoint and everyone who contacted me complained about the border wait times. A family returning to San Diego said they spent nearly eight hours on the road, almost three in the line. I would say that one of the most needed improvements in the tourism infrastructure is a better way for motorists on the highway to get information on the crossing times at all of the Baja California-to-California ports of entry. Even when I called the Tourism department in Tecate and Mexicali, they do not have a clue about the crossing times. They should put the 078 cost-free telephone number to better use and have a "real time" announcement of what the wait times are for San Ysidro, Otay Mesa, Tecate, Calexico West, Calexico East and Algodones. That way, people headed out of San Felipe could make a decision on the road as to which way to turn as they approach Mexicali. (Don't get me started on the Telnor system where an inarticulate person mumbles into a microphone every 15 minutes. It reminds me of a railway station announcement out of the 50's where you are lucky to catch 10% of the information.)
Sunday 30 May
It is interesting to walk round town and see what is happening. Some merchants are doing excellent business while others are very quiet. Value has become paramount for the recovering economy and it is very clear that visiting family groups are looking for good deals with friendly service. A restaurant offering a "decent" free drink with a meal does much better than one giving free fried botanas. A plate with the fish or shrimp matched with fresh vegetables is preferred to one piled high with beans and rice. For a change, I dined at a restaurant one block off the Malecon tonight and had the most truly awful meal that cost me 30% more that my usual, excellent, fare at Rosita's.
Saturday 29 May
I have a request for help to locate a missing relative. "My Grandfathers name is Ocie Julius Taylor, He is 83 years old and drives a gray Cadillac CTS 2004. We know he has a house or condo over in San Felipe, Mexico he has been living there quite a while, for about 5 years now and this is the first time that so much time goes by withouth us hearing from him...." If anyone has any contact information for Ocie Taylor, would they let me know?
Town is busy today and there is plenty of quad action on the beaches. Liquor stores and mid-range restaurants are doing extremely well. Most of the condos around town are rented out and it always amazes me how many people can pack themselves into a 3 bedroom unit! As one beachgoer commented "....it gets the cost for a weekend away from LA down to $150 per person"!
Friday 28 May
The town is filling up rapidly as visitors stream in for the three day holiday. Indeed, the Malecon has quite a traffic jam of the size we have not seen since Easter. Performance stands and booths are being set up for the Fiesta del Mar that will be inaugurated this evening. Travelers checking in report that at 6 p.m. the traffic southbound into Mexicali downtown is backed up to Interstate 8. Such border crossing delays are contributing to killing the tourist traffic to San Felipe and other border towns. The Mexican SIAVE system needs a major revision to make it work efficiently, just as the US border port of entry needs five times the number of lanes it presently has to ensure that travelers do not spend hours in line waiting to re-enter the US.!!
Perhaps it is just a coincidence but the number of families who have driven here in their Hummers is amazing. Maybe there is an owners convention going on. Regular gasoline is selling for about $2.39 dollars/gallon equivalent, up mainly because the pesos' value has been slowly strengthening against the dollar. A quick survey of the hotels indicates that most will be full or close to full and some 3000 people should be spending money here for the holiday. This should bring some $400,000 dollars into the community. We expect that temperatures along the beaches will be in the high 70's and there should be enough wind for Hobies and kitesurfers. The deserts will see temperatures in the mid 90's.
In Mexico City, the government has published the long expected notice in the Diario Oficial de la Federación that will require a doctors prescription for antibiotics starting on Monday 23 August 2010. We also anticipate filings to restrict the sale of other classes of pharmaceuticals to be published in due course. The result will be that all pharmaceutical medications will require prescriptions within two years.
The Governor of Baja California, José Guadalupe Osuna Millán, in his capacity as vice president of the Border Governors Conference, confirmed that the Mexican leaders will not attend the next meeting in Phoenix, Arizona, that is scheduled for September. They are requesting a change of venue to a more friendly state. The Governors of Texas, New Mexico and California reportedly support relocating the conference.
Tuesday 25 May
Today is the day declared as "A day without a Mexican" along the border as a reaction to the "Ley Arizona". All Mexicans have been urged to avoid crossing into the USA for shopping and conducting business for a 24 hour period. The crossings in Mexicali have been almost empty of traffic as seen in the photo below from La Voz.
Even so, the wait times are around 20-30 minutes at noon as the US border agents struggle to maintain slow transit times by increasing the inspection thoroughness. Business should be back to normal tomorrow. I know that many of our readers are incensed by boycotts like this, claiming that the new Arizona law is totally in keeping with the need to verify that workers are legally in the USA. However, the perception in Mexico is that this measure is aimed directly at singling out Hispanic people.
Meanwhile, in San Felipe, the streets, shops and restaurants are very quiet now that the snowbirds have left and the influx of campers expected for the Memorial Day weekend has not yet started. On the Mexicali-San Felipe highway yesterday, I measured a traffic flow of around 20 vehicles/hour and many of those were commercial delivery vehicles. Holiday visitors should come and take advantage of the beautiful climate, the deserted beaches and the excellent bargains that are available. Take the discount coupon on our front page to Rositas and get a fantastic deal on the garlic shrimp dish.
Saturday 22 May
More than 8000 aftershocks from the Easter Day 7.2 magnitude earthquake have now occurred. This morning, around 10:30 a.m., two shocks in the 4.5-5.0 magnitude range occurred near the El Centinela mountain between Mexicali and La Rumorosa, almost directly on the border between Mexico and the USA. They were felt in El Centro, Mexicali, San Diego, and as far north as Malibu. I did not notice them in San Felipe. No new reports of damage have been made in Mexicali though some cracks have been seen in structures in the village of Santa Isabel, west of the city. The earthquake activity appears to have migrated from south of Mexicali (the Borrego fault), along the Laguna Salada fault and is now heading to the Elsinore fault in San Diego (see my diagram of 22 April below). As always, take caution when driving as any of these earthquake shocks can cause damage to the roadway that could give you a substantial jolt.
Friday 21 May
I want to clarify that the comments of 16 May, about investigation of real estate developments are primarily concerned with the developments that sprang up during the boom. In attempts to cut corners and speed up sales, several of these started offering real estate before they had all the permits required by the government. If you are buying a lot from a private buyer, your concern will be to make sure that the paperwork on your lot is in order, for example that the lot has (or can obtain) a fideicomiso. Papers and titles will be recorded in Mexicali and you will see the seal and signature of a Notario on the papers. The Notario files the papers and makes sure that taxes have been paid. Visit the Notario and retain him to verify that everything is in order.
I have been getting a lot of questions from visitors planning to come to San Felipe for the Memorial Day weekend about the state of the road after the earthquake and also on the safety of traveling here. First, on the safety of travel in Baja, there are no problems in the Mexicali-San Felipe corridor. The drug-war stories that keep appearing in the US press are primarily referring to the situation in the city of Juarez, across from El Paso, Texas. Baja California is quiet and safe. Even the battles that were occurring in Tijuana a year ago are no more. In fact, tourism to Tijuana is on the upswing as citizens and visitors are coming back to the tourist areas and the city is putting on a lot of summer festivals, expositions, book fairs, theater, sporting and cultural events. For events and more details, see the Secretary of Tourism website here ..>> . This, more than anything, illustrates the building in confidence and attitude towards travel from California to Baja that is occurring.
When you cross the border from Calexico to Mexicali on the trip to San Felipe, perhaps the most noticeable thing is how clean and well-kept Mexicali is considering that a huge, magnitude 7.2 earthquake, occurred less than 2 months ago. The streets are in good condition and you will be hard-pressed to find visible damage to buildings. Everything has stood up extremely well and repairs have been addressed promptly and efficiently. Mexicali has a strong and vibrant community that is very proud of its place as the center of government for the state. Law and order here is strong and efficient. You need have no fear of driving in Mexicali - just obey the laws and observe speed limits. If you have any problems, call 078 on your cellphone once it has registered on the Mexican system. This cost-free call will put you in contact with friendly, helpful, bilingual personnel from the Tourism department that can get you help or give you directions anywhere in the State. Incidentally, there are many excellent restaurants and places to stay if you decide to stop for a while. (The COTUCO Mexicali website is hard to recommend as a source of information but you can check it here..>> ) One of my favorite places to eat is the Laguna Azul seafood restaurant on Independencia just east of Rio Mocorito, about 3 km from the Lucerna Hotel. The shrimp coctails are amongst the best I have ever had - if only we had a branch in San Felipe! You can park across the road in secured parking; the attendant always appreciates a tip. Check out the aqueduct behind the restaurant. This is what conveys the Colorado water to the treatment plant just across the road. In times past, you could occasionally see cars that had fallen in the canal as the drivers had lost control along the narrow roadway along the banks.
As you proceed south on the road to San Felipe you will encounter the first major roadworks around km40, south of the turn-off to Los Algodones, and close to the epicenter of the earthquake. You will notice ripples have developed in the asphalt as the ground rose and fell during the event. This section of road was scheduled for "4-lane" conversion, so the government decided to do both the repair and upgrade work at the same time. You will be diverted off to a very rough stretch of hardpack for a few miles and the restoration work will be to your east (picture below). If, like me, you are susceptible to strong vibrations, use the bathroom before leaving Mexicali.
Many construction trucks are going back and forth along with the visitor traffic so just be patient and go with the flow (15 mph). The surface has a lot of sharp stones and rocks in it and if you go too fast you risk shredding your tires! In this region, the ground sank several feet and caused the irrigation canals to flood the area. You can see dry canals in places as you go south. It is worth noting that the economic damage caused as a result of the earthquake (around a thousand million dollars) is mostly from the devastation of the agricultural region of this part of the Mexicali valley, not because of building failures in Mexicali. There will be a major impact on vegetable prices later this year.
Once you get past this section of the road repair, and on to the Rio Hardy area where you see the last vestiges of the Colorado next to the road, you are all through with earthquake damage. The route is then clear to San Felipe, though there is still an off-road diversion north of the Ensenada road where the road-widening program is continuing.
Marvel at the beautiful overpass at the junction with Mexico route 3 and also the new buildings that are rising for the military checkpoint search area.
Sunday 16 May
During the real estate boom a few years ago, land and properties were selling like hot cakes. Americans, Canadians and others were coming to San Felipe for a weekend and putting down deposits of tens of thousands of dollars to reserve their place in the line. Those were the days of easy money. Anyone with a house in the USA could get money out of the equity in their existing property almost without paperwork. Real estate offices in Mexico were taking orders over the phone and many purchases of land were made "sight unseen". There were some real estate salespeople who were rumored to be making commissions of several million dollars a year!
Amid all of this intense speculation, delays occurred and errors were made in doing the paperwork but the foreign buyers were told not to worry - this is the way we do things in Mexico. People who had saved for their retirement and had always been so careful about how they spent money, had researched every investment that they had made; people who were not fools and prided themselves on being savvy negotiators, were swept up in all of this hype and frenzy. They saw the dream of San Felipe and their house on the beach or on the fairway and they knew that they had to seize the opportunity while it was available. Due diligence was a phrase that had no place in the market at that time.
Here we are three years later and now the true magnitude of the problems is being slowly uncovered as the "paperwork" makes its way through the system. Many buyers have discovered that the money they gave to a salesman in exchange for a "contract" has gone. The fideicomiso that they were promised was never applied for or the permits to obtain it were never validated. Various developments were not properly authorised by the Mexican government and land sales to foreigners were not legally possible. Of course, there are many legitimate real estate developments that were correctly established and had the required four levels of sign-off to ensure that a legally binding contract could be issued. People who invested their money in these are secure.
Lawsuits are now in the works against the non-compliant developments and a "collective action" is underway seeking those people who have been defrauded. Meetings are being held with the Mexican consumer affairs agency (PROFECO) which is working closely with the federal and state prosecutors in Mexicali to resolve the issues. It is expected that these actions will strengthen the ability to pressure non-performing developers to resolve issues with clients. If you, or someone you know, has paid money to a developer but not received the services or title you were promised, you should look at this website and contact the people there for further information (Note that I have no affiliation with this person/group and, as with all matters involving disclosure of personal and financial information, you should exercise "due diligence"): http://www.sanfelipedevelopments.com
Monday 10 May
Happy Dia de las Madres!
The National Institute of Statistics, Geography and Informatics (INEGI) has announced that the Mexican national census will be conducted between 30 May and 25 June this year. This event is conducted every ten years to get the number of people living in Mexico and their characteristics. Interviewers will come to every home and ask a series of questions on earnings, education levels, sex, food consumption, housing characteristics, and more. The census team will wear official uniforms and display identification credentials. They are instructed to be friendly and behave in a moderate way. If they do not get to interview you on the first visit, they will return as many times as necessary in order to obtain the information. Staff training is currently underway, no word if they will be bilingual.
There have been press reports in the past week of American citizens being fined heavily at the border crossing from Los Algodones to Winterhaven (Andrade) for not declaring prescription drugs. One elderly woman was fined $11,780 dollars by customs agents for smuggling 984 pills, another 89 year old man tried to smuggle a couple of hundred Valium tablets and was fined $2000. The head of the Border Patrol in Andrade said that US residents must know and follow the procedures for bringing prescription drugs back to the USA.
Major facebook and Twitter groups are organizing a boycott of Arizona on 23 May because of the new laws targeting hispanic individuals in that state. Economic impacts are already being felt with the cancellation of around 10 million dollars in conferences and meetings and the loss of 7000 American jobs because of declines in tourism trips by Mexicans. The Mexican government has put Arizona on a "do-not-visit" list because of the possible harrassment and arrest of Mexicans caused by the new law.
A luxury cruise ship with 1000 passengers visiting Puerto Penasco over the weekend collided with the pier and with five shrimp boats while docking. The passengers were shaken up but managed to get ashore for emergency Margaritas. Everyone was in high spirits when they returned to the ship in the evening. The cruise ship business is becoming a major player in the economy of Penasco. What a pity we do not have a deep water port in San Felipe.
Thursday 6 May
The Mayors of some 70 California cities are meeting with their counterparts of the five cities of Baja California on Friday 7 May in Rosarito to discuss common problems of tourism, trade and crime. At the top of the agenda is a discussion of what to do about the increasing delays in crossing the border. The wait times for northbound vehicles now is commonly 2-4 hours during busy times (up from an average of 45 minutes in 2005), and when the Mexican government fully implements the SIAVE screening system, huge delays are expected for traffic headed into Mexico. (Currently this system is still in test at the California-Baja border and delays after 3 p.m. each day at Tijuana are already around one hour.) Businesses on both sides of the border are suffering as discretionary shopping trips are rapidly declining. Tourists, along with medical and dental appointments, are also heavily impacted by unpredictable wait times on both legs of their trips. The impact of border delays on commerce is staggering. Figures from a 2007 study by San Diego Association of Governments identified job losses in San Diego County at about 35,000 persons and $2.71 billion dollars productivity loss; in Baja the corresponding numbers were 8,300 jobs and $1.49 billion dollars. It is believed that the current numbers are around double the 2007 numbers.
We can only hope that the Baja California representatives will make the strongest possible case for speeding up the screening process by both the US Border personnel and the Mexican Government inspectors. One possible outcome is that the Mexican government will institute a system similar to the US SENTRI pass where prescreened individuals driving specially tagged vehicles will be able to use a fast-track lane at designated border crossings for a few hundred dollars/year fee. Unfortunately, these systems do nothing to help the casual tourist family who may wish to make a trip across the border just a few times a year, or the regular traveller who wants to bring unscreened family members for a trip to Baja.
Wednesday 5 May
On the 22nd. April, I referred to a press release (4 May 2010) from Dave LaBarre of Mi Casa del Mar. Dave has since written to me and told me that this press release was from 2006 and should be disregarded. I will quote his letter below:
Tony Colleraine and all my friends in San Felipe:
In the last few weeks I have received e-mails with an attachment of a Press Release regarding the Beach Front Community at La Hacienda that was originally sent out in early 2006. It is certainly not true today. We don’t know who has been sending it out but it definitely was not sent out this year by me.
I have not authorized anyone to write or send out any Press Releases for the last couple of years. If you see or hear of any thing like this please contact me and I will tell you if there is any truth to the rumor.
As always I can be contacted at my same old e-mail and phone number. Please contact me if you think that I can help solve any particular problem.
I wish you all the best in these very troubling times.
Dave La Barre
Monday 3 May
A couple of weeks ago there was a bi-national conference at UCSD in San Diego to discuss the US health care reforms, the inclusion of the 30 million citizens currently not covered by insurance and the possibility of using cross-border health care facilities to provide more cost-effective medical attention to US retirees.
From personal experience, I can speak of the frustration of having to travel back to California for treatment when I am taken ill in San Felipe. There are also many cases of US residents here being charged several thousands of dollars for air-evacuation to San Diego hospitals in the event of a stroke or heart attack.
Over a 25 year period of observing the health problems of US citizens (and other foreigners) coming to San Felipe, I can identify the following broad categories of need:
1. Younger adults, age range 35 to early 50's, possibly with families, coming to settle in San Felipe. This group is healthy enough to get by with just occasional visits to a local doctor for outpatient treatment of an infection or wound. Frequently, they do not maintain any medical insurance coverage back in the USA and they rarely have any major life-threatening condition. They pay the modest out-of-pocket expenses themselves - generally amounting to less than a few hundred dollars a year.
2. The early retirees, age range 50 - 70, who maintain health coverage from their former employer and then transition to Medicare. They buy or build a house in San Felipe and live in relative comfort without major health problems. Cuts and scrapes, falls and minor infections are again dealt with locally and they may be able to get reimbursed for emergency costs by their US insurance carrier. For more serious or chronic problems, they travel to the El Centro or San Diego regions for treatment by their health provider. Some even enroll in the Mexican health insurance system and get treatment at the San Felipe clinic or are sent to the Mexicali hospital for more extensive procedures. (By contrast, most Mexicans who can afford the payments buy Mexican heath insurance policies so they can see more skilled private doctors or be transferred to private hospitals.)
3. The over 70's. These elderly people start to have more serious problems, often involving excessive blood pressure, alcoholism, heart attacks, serious injuries, broken bones, and the onset of terrifying affictions such as Alzheimers disease. Initially, a family member or friend will see that they are taken to a US hospital for emergency treatment. Occasionally a life-flight air ambulance will be called to evacuate them and their credit card will be billed for the $10,000 or more charge. Generally, this is a wake-up call for them and it becomes clear that they can no longer survive without access to a competent and well-equipped medical facility that is less than one hour away from their house. Ultimately, we see many people in this situation having to sell up and move back "home" to live with their children or in assisted living facilities.
The debate over health care recognized many of these problems and that action was needed for Americans seeking medical attention while visiting or living out of the country. President Felipe Calderon is expected to make a proposal to President Obama on health care for Americans in Mexico when they meet in Washington later this month. However, sources close to the situation say that the US Congress is unlikely to approve of any use of Medicare funds in Mexico until hospitals can be certified to be delivering services of equivalent quality to those that would be provided in a US hospital. This becomes a catch 22. If Mexican hospitals are required to meet the same standards and certifications as their US counterparts, there will be negligible cost-savings for the US tax payer, and there could be opportunities for a significant increase in fraud at the same time. US insurance companies appear to be unanimously against sending money to foreign institutions, and medical facilities near the borders fear a reduction of customers and revenue in their area.
previous months news - the Mexicali earthquake and its aftermath
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