New America Media/PBS NewsHour, News Report, Jose Luis Sierra, Posted: Sep 16, 2010
ROSARITO BEACH, Mexico—Walking or driving down boulevard Benito Juarez, the main street of Rosarito Beach, gives no hints of the struggles this tourist community has been fighting for the past four years.
As the sun sinks over the Pacific Ocean, neon lights advertise hotel rooms at competitive prices. Restaurants from French, Japanese, or local cuisine that offers rabbit, snake, quail, goat or deer meat— as well as the typical hamburger or Mexican menus—entice customers with margarita specials. Bars and discos compete for customers with loud music. If you care to ask, locals will advise you about the best choices.
If things get a little out of hand, "tourist police" will show up and make an effort to help you feel safe.
The town has a population of about 130,000 residents—14,000 of them U.S. citizens living here permanently. It gained fame in the 1920s for being a favorite spot for Hollywood legends like Frank Sinatra and Marilyn Monroe, and now is advertised as the closest place south of the U.S.-Mexico border where tourists can enjoy the good life at affordable prices.
But locals say things have changed, as they recall the period of 2006-2008, when a violent crime was reported on an average every two hours.
Tourism, with a little more than 1 million visitors a year and the main staple of the local economy, has gone down more than 50 percent. Hotels, restaurants and just about every business related to the service industry faced the choice of closing or reducing staff and scaling down operations.
But the final blow came with the burst of the local real estate market bubble, a little more than three years ago.
Nobody saw it coming, after years of brisk sales of condos and villas along Rosarito Beach. There was a splashy announcement that billionaire Donald Trump would lend his name to a lavish coastal condo-hotel project, 10 miles south of the border on the outskirts of the town. Developers took Trump's move as a sign of confidence and began a frenetic pace of construction.
Thousands of U.S. retirees flocked to the area by the busload in search of an opportunity to own beachfront property at prices impossible to find north of the border. As side benefits, they saw the opportunities of a much lower cost of living, low property taxes, and the option of renting out their property when not in use.
"We originally built out our office space to support 30 to 60 agents. And currently we are running around 10, six. So that's basically what the marketing is supporting right now," said David Biondolillo, a real estate agent in charge of a five tower luxury condos by the beach, with prices ranging from the low $200,000 to $460,000.
Happy to get by, and with most of his 600 units already sold, Biondolillo is one of the lucky few. He said that more than 200 projects with permits already approved had to be shut down for lack of financing. That includes the project to which Trump had lent his name. It now resembles an empty pit.
For now, just as in the United States, a new market is emerging. Buyers are beginning to scout for foreclosure properties, or properties that are being offered for 30-40 percent under their original price, as developers scramble to recoup whatever they can from their investments. Still, perception plays a key role in this strategy.
"True, we had a problem with police corruption and crime four years ago, and that's one of the reasons I ran for mayor," said Hugo Torres, just a few months from finishing his second stint in that post. Torres is also owner of the Rosarito Beach Hotel.
"People ask me constantly if Rosarito is safe. My answer is always yes. It is as safe as any other city in the world. It is a matter of common sense. If you deal with drugs or are involved in any type criminal activity, you will never be safe, no matter where you are," said the 74-year-old mayor.
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