Developers Rushing to Get Dibs on Spectacular North Baja Coast : Mexico: Condos and resorts are multiplying. Often, buyers are Southern Californians seeking better value and change of scenery.

Great natural splendor unfolds as Route 1 runs south from San Diego down the Baja California coastline. Soaring jet-black lava cliffs drop to the sun-dappled Pacific Ocean. Bronze pastures slope to meet the road.

Some call it one of the world’s last great coastlines.

But something else, something much less organic, is starting to fill out the 45 miles from the border city of Tijuana to the port city of Ensenada: High-rise condominiums and resorts, and banners announcing “Models Open” and “Now Showing.”

Encouraged by the loosening of Mexican foreign investment laws and improved cooperation between the United States and Mexico, developers are rushing to get dibs on their piece of Baja Norte.

“It’s bearing more fruit than anything that’s happening in the U.S.,” said Jerry Trammer, general manager of a Palm Springs developer putting up 320 homes in Baja.

In many cases, developers are selling to Southern Californians who come south seeking better value and a change of scenery.

Buyers are tempted by names like Real Del Mar. Playa Blanca. Playa Del Mar. The Grand Baja Resort. Club Morena. La Paloma. An employee at the Tijuana tourism office says he can’t keep track of all the projects that have sprung up in the Tijuana-Ensenada corridor, where 20,000 foreigners now live.

For a glimpse of the future, consider Bajamar, a 1,600-acre “megadevelopment” with its own highway exit.

Bajamar has been around since 1974, but for many of those years it sat fallow, its buildings dilapidated. Along came Grupo Situr, a Mexican developer known for large-scale resorts, with $170 million.

Grupo Situr has bold plans. By 1997, Bajamar will have more than 2,300 homes, two 18-hole golf courses, movie production studios, a health clinic, a supermarket, two artificial lakes, tennis courts and an equestrian center.

Sales to developers and home buyers are expected to generate $1.5 billion.

Four years ago, Pat and John Loukmas, who made their money in the Southern California hotel and restaurant business, ordered the home of their dreams at Bajamar--a split-level Mediterranean model with stone lions guarding the entrance and a courtyard with a fountain and native banana trees, queen palms, yuccas and agave. Villa Poseidon, they call it.

Pat Loukmas, an artist and aerobics instructor, has a fondness for Mexico born of many trips there.

“A lot of people just think of the dirt in Tijuana,” she said. “They don’t think of the beautiful areas farther south.”

It’s not just the affluent buying homes in Baja. While Bajamar says its clients are mostly middle- to upper-management types investing in weekend homes, houses start at $175,000--a bargain by Southern California standards.

Members of the middle class--schoolteachers, for example--who feel “our money is not going very far (in the U.S.) these days” are making the move, said Paul Vanderwood, a San Diego State University professor.

Baja California’s Pacific coast extends about 800 miles from the gritty and growing Tijuana to the playgrounds of Cabo San Lucas. But most of the land in between is still virgin territory, owned by small farmers and farm cooperatives.

Building in Baja isn’t a guarantee of success.

Route 1 long ago earned the nickname “Highway of Broken Dreams,” a reflection of numerous projects gone belly-up, said David G. Ellsworth, a 20-year adviser to U.S. and Mexican real-estate ventures.

Even today, unoccupied shells are a monument to developers who couldn’t raise the capital to finish their work.

“Most of the projects have been started by people with just enough money to build a gate--a fancy gate--and buy some brochures,” said Ellsworth.

Many of those that did get off the ground were poorly designed and bereft of amenities, Ellsworth and others say. Even their streets weren’t well thought-out. That’s why people stayed away.

By contrast, demand remains high for the sort of the master-planned, ultra-luxurious resort developments that are more common these days, they say, and any talk of a housing glut along the north coast is premature.

Seminars held in U.S. cities are widely attended by top builders, contractors and investors. Meanwhile, the Mexican government is trying to win foreign investors with new roads and an easing of formerly prohibitive regulations.

Between 1917--the year of the Mexican Constitution--and 1973, foreign investors had no legal way to own land in a “prohibited zone” of prime border and coastal land 100 kilometers (about 62 miles) or less from the border, and 50 kilometers or less from the coastline. That has changed, with the greatest momentum coming in the last few years.

Baja’s infrastructure has not kept pace with the country’s courting of foreign investors. Baja still relies on propane gas rather than natural gas, and phone lines are being installed piecemeal.

“We have to remember this is still a Third World country. The whole thing is not quite up to the standards we all enjoy in the U.S.,” said Stuart Ripley, president of a Century 21 real estate office in Rosarito Beach. “But it’s reliable.”