Mexico City’s Hopes for Urban Renewal Rise With a New Hotel

After years of decline brought on by urban flight and a devastating earthquake, this historic capital is trying to rescue itself from squatters, hawkers and thugs--and could soon make considerable headway.

The central district’s first major hotel in decades, a 467-room Sheraton, is scheduled to open in December opposite Alameda Park, potentially attracting as many as 5,000 tourists and conventioneers at a time, and with them loads of cash.

One hotel doesn’t make a renaissance. But proponents hope that it will start the process by attracting tourists and introducing businesspeople to Mexico City’s redevelopment potential. Despite its reputation for heavy smog and high crime, the capital’s ornate palaces, churches and plazas evoke Spanish colonial grandeur like few other cities in the hemisphere.

“This could be Madrid or Paris,” said Alejandro Encinas Rodriguez, the city’s economic development director. “But we have not developed our potential. What the center lacks is life, and for that we need people--and that’s what we want to attract.”

Mexico City’s current situation is dire. It and other Latin American capitals have decayed into what one historian has described as “post-apocalyptic.” After dark, the 120-block historic center is a ghost town, with vagrants and patrolling cops the main signs of life.

“At night it’s completely deserted. . . . People don’t feel safe,” said Gustavo Ortiz Acosta, owner of an imported foods store downtown. He said many downtown apartment buildings are now used as warehouses.

Adding to the eeriness is that 16 years after a massive earthquake killed more than 10,000 people, whole blocks of downtown remain razed and vacant, or littered with damaged buildings. The result--an increase in squatters and crime--has been devastating for businesses. Half of all retail and office space is vacant.

“We’re down 80% [in sales] since the earthquake. This used to be our Wall Street. But there is no tourism, and without tourism you might as well close,” said Moshe Rosenberg, 87, owner of a jewelry store on Avenida Juarez since 1941.

But the city, which is a federal district similar to the District of Columbia in the U.S., will soon launch an offensive to reclaim downtown and spur its renewal. To make visitors feel safer, the city plans to announce as early as next week that it will assign 1,500 more police officers to guard “tourism corridors” encompassing prime architectural monuments, Encinas said. There has already been a crackdown on street vendors, called ambulantes, who clog sidewalks, attract crime and make life miserable for traditional retailers.

To boost longer-term development, Encinas said, the city will soon offer new incentives to attract businesses and residents, including property and payroll tax exemptions for two years. There’s no shortage of housing for the would-be gentry: The historic center has lost a third of its population since 1980; it’s now home to 200,000.

No one expects any short-term miracles--vitality has been waning for decades, and it could take that long to restore it, said Roberto Eibenschutz Hartman, an urban specialist at the Autonomous Metropolitan University in Mexico City.

“If we think we can inaugurate the new era in six months, we are going to be disappointed,” Eibenschutz said.

Others, including UCLA urban planning professor Edward W. Soja, say the “de-densification” of Mexico City and other big cities in North and South America may be irreversible. Social trends--such as growing income gaps and the increased use of cars--are difficult to buck.

“People with enough money are able to escape to protected ‘privatopias,’ walled-in communities where they can abandon all civic responsibility, work selfishly in their own benefit and in isolation from civic responsibility,” Soja said. “This is the dynamic of what’s going on.”

Mexico City also has its own unique set of problems, chief among them the seismic instability of the area, illustrated by the 1985 earthquake and by the fact that the city sinks a fraction of an inch a year, thanks to persistent overuse of aquifers beneath the capital. This creates an immense design problem for any architect--and a source of worry for any bank considering making a construction loan.

So it was all the more surprising when the $65-million Sheraton project, called the Centro Historico Hotel and Convention Center, broke ground last year. Its design, a Mexican innovation, allows the plane of the hotel to be altered in response to seismic fluctuations, using 469 adjustable concrete pylons that can be jacked up or sawed off as the ground shifts below.

“It’s the most modern anti-seismic system available. You can adjust the whole building as the land settles,” said Juan Hidvegi, the Sheraton’s general director.

Mexico City has enough other problems to exasperate the most enthusiastic urban renewal advocates. More than 60% of the buildings in the historic center are intestate--meaning they were not disposed of legally in wills left by their deceased owners. As a result, those who claim to own them lack clear title.

Rent control is in effect in most of the historic district, meaning owners of buildings with the most potential for gentrification have little incentive to invest because they can’t raise rents to recoup their costs. This leads to a vicious cycle of steadily deteriorating properties that become attractive to a poorer and poorer class of renter, Encinas said.

Extremely rapid and unplanned growth on Mexico City’s periphery also has placed a burden on downtown. The sprawl provided little in the way of retail outlets or services, so an estimated 2 million citizens, most of them poor, come to the center for shopping, medical care and other services.

“The poor continue to use the center as a great nucleus of commercial interchange,” Eibenschutz said, causing congestion and encouraging the proliferation of the ambulantes, many of whom sell stolen or smuggled goods. That drives “people of higher resources” away from downtown, he said.

The upcoming round of incentives follows several other government efforts to stimulate redevelopment in the capital, most of which had limited success.

In the early 1990s, Mexico gave developers zoning breaks that enabled them to build higher-density offices and commercial space outside the formal historic center if they invested in rehabilitating a historic building. About 200 such structures were restored and rented by corporations or government agencies.

But this did little to create middle- and high-income housing, which is what the historic zone sorely lacks, said Jorge Legorreta, an architect, former city council member and host of a TV show about the city’s history.

The city now prohibits new housing construction except in a central zone that includes the historic district, a rule designed to boost downtown investment and discourage sprawl. But the program has only led to higher downtown real estate prices and illegal building elsewhere.

Real estate consultant Ari Feldman, general director of the Mexico City-based MIHC consulting firm, says foreign investor interest in the capital is increasing.

“Mexico City is a hidden jewel. It’s a place to invest in today or tomorrow, but you will be investing in it,” Feldman said. He predicts the Sheraton will return the area around Alameda Park to “its former grandeur.”

Interviewed near the Zocalo, the enormous central plaza that is this city’s historic heart, tourist Rebecca Grob, 19, of Hampshire, England, said she sees the city’s potential.

“It’s a lot more scummy” than Paris or London, she concluded, but “if they cleaned up, it’d be really nice.”

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Alison Trinidad of The Times’ Mexico City Bureau contributed to this report.