Taking Baja South

They arrive by land, air and sea, with visions of the good life dancing in their heads. At first, their numbers are so small as to be barely noticeable. But within a few years they may end up taking over your street, your colonia, practically your entire town. They bring their curious native customs with them—skinny Frappuccinos, “personal watercraft,” wireless Internet access—and replant them in foreign soil. Relentlessly, they remake the landscape in their own image, transforming derelict colonial-era manses into stunning million-dollar homes, and majestic swaths of lonely seaside acreage into $300-per-round golf courses. And though many of them make a diligent effort to learn the local tongue, befriend the natives and blend into their adopted country, others stubbornly resist assimilation: hanging out in their gated compounds with other English-speaking exiles, eschewing the local coffee shops and taco shacks in favor of Starbucks and Burger King, plowing their SUVs like woozy battleships through the narrow streets of picturesque 17th century towns.

Even before last year’s massive demonstrations in downtown L.A., in which hundreds of thousands of people took to the streets to protest what they regard as draconian immigration policies, U.S. politicians, the media and the public have fixated on the flow of human traffic across the border. But far less attention has been paid to a parallel phenomenon with equally profound implications: the growing hordes of U.S. residents who are roosting throughout Mexico and, to a lesser degree, Central and South America.

Today, an estimated 500,000 to 1 million Americans—or, as Mexicans refer to them, norteamericanos—along with roughly half that many Canadians make their homes in Mexico, either as permanent residents or part-timers. Though many of the newcomers are semi- or fully retired, others hold FM2 and FM3 visas that permit them to work in their new country. And though the Mexican Constitution places certain restrictions on them, such as prohibiting involvement in Mexican politics, norteamericanos generally enjoy open, privileged lives compared with the millions of Mexican illegals skulking in the shadows of the underground U.S. economy.

In coming decades, these middle-class transplants and rat-race dropouts are expected to surge to perhaps 10 times their current number, as home equity-rich baby boomers from places such as San Diego and Tucson go searching for second (or third) homes in the expatriate hot spots of Ensenada-Playas de Rosarito, San Miguel de Allende, Puerto Vallarta, Merida, Mazatlán, Oaxaca, the Lake Chapala region outside Guadalajara and at the southern end of Baja California Sur.

If the northern Baja corridor of Tijuana-Ensenada-Playas de Rosarito was the Normandy beachhead of the U.S. invasion, then Baja California Sur is the real estate equivalent of the Battle of the Bulge. It’s ground zero of a symbolic showdown pitting advocates of culturally and ecologically sensitive, sustainable growth against U.S. transplants and aggressive developers who are bent on the Florida-zation of one of the planet’s truly remarkable corners. Americans who want coastal Mexico to become a Southern California satellite, packed with strip-mall mini-marts, glib housing projects and yacht-crammed marinas, are facing off with Americans who understand that—despite their wealth and the advantages that come with holding a U.S. passport—they still are guests of another country with its own rich culture, where few qualities are more highly prized than good manners and humility.

Only about two hours by air from LAX, the southern tip of Baja Sur already is turning into a surrogate Orange County or Malibu. Plenty of boldfaced names have vacationed there: Tobey Maguire, Jessica Simpson, Lance Armstrong, Bill Gates. John Travolta reportedly celebrated his 50th birthday at the ultra-exclusive One&Only Palmilla resort.

Plans call for the area—which promotes itself as an “elite” and “high-end” destination—to swell by hundreds of thousands of people in coming years. Hotels and private homes are rising fast on stunning, once-desolate beaches, even while much of Baja Sur remains short of potable water and electrical hookups. Workers are pouring in from other parts of Mexico, many of them now living in shacks, but hoping eventually to ascend to the lower middle class, as some laborers in Cancún and other tourist-hungry parts of Mexico have done.

The question about all of this rapid development and purported upward mobility is, of course: At what cost? And who will pay it? Can Mexicans and Americans work together in Baja California Sur to create a culturally vibrant community based on mutual respect that boosts both groups’ overall quality of life? Or is Baja California Sur merely the next Cancún or Baja Norte waiting to happen, the next missed opportunity for creating something more imaginative than another expat Sun City-by-the-Sea?

From the dusty front stoop of the Cabo San Lucas fish market she runs with her husband, Juana Cota can see the mushrooming of the American dream, south-of-the-border style.

Cota’s small store sits on Avenue Leona Vicario, one of the main commercial drags traversing the sprawling shantytowns that encircle this booming leisure world for U.S. vacationers, businessmen and retirees. Far in the distance, you can see the dramatic rock formations that give the area its photogenic fame, as well as the proliferating luxury hotels and condo developments that cater to foreign sun-seekers. Cota inhabits a very different world, where the houses are slapped together out of scraps of wood, cardboard, concrete bits and whatever else is on hand, and most roads are pitted, unpaved dirt. One recent afternoon, a woman still wearing her white waitress tunic trudged past a mountainous open-air dump near Cota’s store on her way home from work.

You might suppose that such striking social inequalities would breed resentment toward wealthy American interlopers. But for many Mexicans here, the opposite appears to be true. Though their jobs pay very little by U.S. standards—typically between $137 and $186 a month, plus health benefits—restaurant waiters, hotel workers and private housemaids working in Cabo San Lucas now are able to buy or upgrade homes in the working-class neighborhoods of Lomas del Sol, Caribe and Palmas. (According to Mexico’s labor department, the minimum wage in Baja California Sur is about $4.57 per day, and the average for hotel and restaurant workers in Cabo San Lucas and San José del Cabo is $6.22 per day.) Many of her family members have been employed in such work, and Cota herself previously worked as a maid for a U.S. couple.

Though many people from Mexico’s impoverished rural areas risk their lives crossing into the United States in search of work, Baja California Sur actually attracts laborers from other Mexican states such as Sinaloa, Sonora and Jalisco. They’re lured by wage scales that are typically double or triple what they left behind. “God willing that a lot of tourism will come,” Cota says. “Without North Americans, we wouldn’t eat.”

Whatever your views on the Treaty of Guadalupe Hidalgo, the North American Free Trade Agreement or the movie “A Day Without a Mexican,” there’s no denying the growing interdependency between the U.S. and its southern neighbor. In raffish border zones and hedonistic beach resorts, day-tripping tourists and college kids on spring break bring not only noise, trash and sometimes obnoxious behavior, but also desperately needed jobs for Mexicans. In more genteel enclaves, such as Puerto Vallarta, Cuernavaca and the exquisite provincial cities of Oaxaca and San Miguel de Allende, Americans have sent housing prices soaring, but also have supported many local charitable and cultural projects, including schools and health clinics.

Mexicans welcome the higher living standards and abundant conveniences (smoother roads, safer hospitals) that Americans have brought with them. In places such as the southern tip of Baja California Sur, practically everyone—from car rental agents and charter fishing boat operators to strolling musicians and massage therapists—depends on Yankee dollars to survive.

“What foreigners bring to the country is to lift the quality of life. They invent, they create sources of work,” says 52-year-old Manuel Sanchez Icaza, who owns Mexico Lindo, a store that sells jewelry, watches and art at an American-style shopping mall that faces the marina in Cabo San Lucas. He reckons that “99% of our market is North Americans.”

But norteamericanos leave a big footprint in less appealing ways. In “God and Mr. Gomez,” Jack Smith’s 1974 book about the rewards and trials of building a weekend home in Mexico, the late Times columnist summarized the demographic and cultural tsunami already sweeping across Baja. “It was obvious,” Smith wrote, “that Baja had been discovered by a new wave of Americans; not the hardy lovers of the wilderness, but the affluent ones who wanted to get away, though not too far, and in comfort. The dam was busted; the boom was on.”

Smith was writing about the northern cap of the nearly 800-mile-long Baja peninsula, near Ensenada, where he and his wife built their home. Today, the boom that Smith observed more than 30 years ago is still going strong, and the $10,000 that he and his wife originally budgeted for their getaway hacienda might not cover the cost of a gated community’s guard shack. The average price of a new condo in Baja Norte is $300,000. Donald Trump recently broke ground on a luxury development, the Trump Ocean Resort Baja, north of Rosarito, that will include upscale restaurants, a spa and more than 500 condos costing (for the project’s first phase) from $279,000 to $3 million apiece. Though ripple effects from the U.S. mortgage-lending crisis are likely to wreak havoc on the Baja Norte vacation home market, this is likely to be a temporary blip in the continuum of frenzied development.

Some partisans of the area extol the gentler, more authentically Mexican character of certain slices of Baja Norte, particularly the Valle de Guadalupe wine-growing region that extends from Ensenada north toward Tecate. But to all intents and purposes, Baja Norte is becoming an extension of the San Diego-Tijuana megalopolis, where many expats go for their healthcare, banking and other services.

Then there’s Baja California Sur.

A torrid, rocky outcrop more island than peninsula, studded with cactus taller than an NBA forward, Baja Sur is still otherworldly and magnificently untamed in many spots. Though other parts of Baja Sur are rapidly opening up to development, the most aggressive entrepreneurship is occurring at the southern extremities, between the state capital of La Paz and the tourist-friendly twin cities of Cabo San Lucas and San José del Cabo. Separated by about 20 miles, these cities are merging into a single metro area known as Los Cabos, with a current estimated population of 180,000.

Like a two-faced pre-Columbian deity, the southern end of Baja Sur has dueling personalities: the bone-dry Pacific side, as beautifully spare as a Renaissance monk’s cell, lined with gorgeous, isolated beaches that hide treacherous rip currents; and the somewhat lusher Gulf of California (Sea of Cortez) side, where the water lays as flat as in a bathtub. Historically, the area was lightly populated compared with the mainland Indian empires, and the Spanish conquerors later brought diseases that decimated the indigenous population. Baja Sur’s current population is only about one-sixth of Baja Norte’s, and even today the region is cloud nine for backpackers, bird watchers and fishermen and a playground for the whales and other deep-sea royalty that make it their home.

Yet stretches of lower Baja Sur began to resemble Baja Norte during the 1990s. Hummer and Cadillac dealerships line the highway between San José del Cabo and Cabo San Lucas. All the major hotel chains, including Sheraton and Westin, have staked out their little (or not so little) piece of the action along the seafront. Cruise north along the Pacific coastal road toward the small, artsy town of Todos Santos and you’ll see dozens of unfriendly signs warning visitors away from propiedad privada—private property. Here and there, bulldozers can be seen flattening out the remaining irregular terrain.

Baja Mexicans have had mixed feelings about the changes in their state since at least the mid-19th century, when William Walker, the delusional, pro-slavery American soldier of fortune briefly captured La Paz, intending to set up a republic with himself as president. Today, some Baja Sur Mexicans feel that many U.S. transplants are more concerned with tee times and cheap lobster dinners than with how their swelling presence is affecting local property values and eroding Baja’s vulnerable ecosystem.

J. Pablo Uribe Malagamba, the 30-year-old northwest representative of the Mexican Center of Environmental Right, a national independent organization that monitors environmental law enforcement, thinks that most American arrivals don’t have a clue about how they’re contributing to Baja’s ecological degradation. The three biggest problems facing the region, he says, are tourist development, overfishing—by both commercial and sports fishing fleets—and an energy infrastructure that is inadequate and often disruptive to wildlife.

“In the middle of the desert"—which, essentially, is what Baja California Sur is—"you don’t have water, you don’t have electricity, you don’t have a highway, you don’t have drainage,” Uribe says.

Still, the Mexican government’s tourism development arm, Fonatur, has been pushing foreigner-related development up and down the Baja peninsula since the early 1990s. First came new highways, airport expansions and a rash of partially subsidized hotels. Now, Uribe says, under a plan initiated by former President Vicente Fox called Escalera Nautica, or Nautical Stairway, Mexico intends to build 17 marinas along the length of Baja, among whose principal customers will be U.S. yachtsmen wending their way down the Pacific from Orange County and San Diego harbors.

Slowly but steadily, the interiors of Baja Sur’s larger cities are becoming low-wage workers’ residential districts, encircled by hotels and homes for the affluent, Uribe says. If Baja Sur isn’t careful, he believes, it could wind up becoming another Cancún or, worse, Acapulco. Once the domain of rich Mexicans and in-the-know Hollywood stars, Acapulco today is a snarl of traffic-clogged streets and overbuilt beaches where sewage overflow is a constant headache and the bodies of drug-war victims occasionally wash up on the beach. Apart from the college crowd, Americans are staying away in droves, preferring more pristine coastal areas. Today, Acapulco is mainly a weekend and holiday haunt for middle-class families from Mexico City. Uribe pronounces Acapulco’s eulogy: “It developed and developed and developed until it died.”

Like Acapulco and Cancún before it, Baja California Sur initially attracted an exclusive, discriminating clientele. But its growing popularity, stirred by the pressures of globalization, has opened the door to a more generic corporate culture catering to bigger crowds.

One result of this transition, as Jack Smith lamented about Baja Norte, seems to be that those first-wave Americans who are drawn to Mexico out of a sense of adventure and a desire to explore another culture gradually find themselves surrounded by second- and third-wave Americans who are more interested in re-creating their old Newport Beach or Phoenix lifestyle than in bonding with the locals. Ironically, you’re more apt to hear this complaint from another American or a Canadian than from blue-collar Mexicans, who generally strive for diplomacy.

“There are Americans who are here but not here, not interested in making Mexican friends, not interested in learning the language,” says Debbie Stewart, owner of the refurbished Hotel California and adjoining 120-seat restaurant and bar that, collectively, provide the single largest nonagricultural source of employment in Todos Santos. A pleasant, low-key town of about 10,000, Todos Santos provides a stark counterpoint to bustling Los Cabos. A number of U.S. artists have settled in the area, and there are several galleries sprinkled around the town center.

As warm and hospitable as she is opinionated, Stewart and her late husband, John, both Canadian, moved to Baja from an island in British Columbia in the late 1990s at the urging of John’s business partner. After living in Cabo San Lucas for three years, they moved to Todos Santos in August 2001 and purchased a “beat-up pile of rubble” that had once belonged to a Chinese immigrant known as “Chino” Tabasco. “No money had been put into it for years,” Stewart says.

When John died last year, Debbie turned to Alejandro Blanco, the hotel’s young, bilingual manager, for help. Blanco, a Chihuahua native, had introduced his bosses to a more profound understanding of true Mexican culture than they’d experienced in cosmopolitan Cabo San Lucas.

Thanks to a complete makeover that Stewart credits to her husband’s vision, the Hotel California—which, contrary to local folklore, did not inspire the Eagles’ ‘70s pop hit—is now the epitome of Mexican-Canadian-California casual chic. Naturally, this has made it catnip for globetrotting Hollywood: Goldie Hawn has lunched there a few times, Jude Law brought his parents and Shania Twain camped out in the penthouse while doing a photo shoot. Vanity Fair also featured the hotel in its pages.

Yet the Hotel California retains a relaxed, cross-cultural ambience that reflects the Stewarts’ desire to fit into their new home. Part of the reason the couple moved from Cabo San Lucas to Todos Santos, Debbie says, was because John wanted their young daughter “to be part of the Mexican culture and not some little gringa chick running with her American friends in Cabo.”

Blanco, for his part, says he appreciates the Americans he does business with but finds them “cold.” “But let’s be honest,” he says with finality, “without Americans we wouldn’t have any business.”

The current state of southernmost Baja Sur leaves John R. Solís Batllía in a frame of mind somewhere between pride and repentance.

“I’m the guy who [messed] up Cabo!” announces Solís, a real estate developer and president of the Coordinating Council of Los Cabos. A trim, wry Texan of Mexican-Spanish ancestry, the 55-year-old has a knack for wielding irony like a blunt weapon. He also doesn’t suffer fools and likes to quote the Italian Marxist Antonio Gramsci, which makes an interesting counterpoint to the golfing paraphernalia that decorates his office just blocks from San José del Cabo’s historic center. He first moved to the Los Cabos area in 1991 as an employee of the Koll Co., the Newport Beach-based construction and real estate development outfit. His mission, he says, was to make Los Cabos fertile for future development as a tourist and residential destination by establishing a network of local infrastructure. “Basically, we’re the group that detonated this whole thing.”

Today, Solís understands all too well the Faustian trade-offs that capitalist expansion requires. From a string of sleepy fishing villages, Los Cabos has grown into what Solís and others predict soon will become a single metropolitan area of several hundred thousand people. This is the first project he’s been involved with, Solís says, where he has stuck around long enough “to see the aftermath” of a social upheaval that he helped set in motion.

Now retired from Koll, but still a partner and advisor to an ongoing Koll project, he married a Mexican woman with whom he has a 3-year-old son. Solís says that “my social conscience was awakened” to the need to prevent Los Cabos from suffering the same “collapse that historically has collapsed every tourist destination in Mexico: Acapulco, Cancún.” To avoid that end, the Coordinating Council of Los Cabos, which he helped found, is developing a plan based on the projected growth of the area through 2025. Proyecto Los Cabos 2025 calls for using a half-percent of the local 2.5% employment tax to meet the region’s needs.

It won’t be easy, he admits. Some local investors care only about maintaining their properties, without regard for the greater common good. Even modest residential lots now regularly go for $350,000, while a beachfront lot at one guard-gated community with a private golf course and beach club recently sold for $4 million.

“The dichotomy between the haves and the have-nots is very pronounced in Mexico, to the point of being very dangerous,” Solís says. “No streets, no sidewalks, people living in cardboard—that’s what nobody wants to see.”

The one place in Baja California Sur where Mexicans still seem to be hanging the “Mi Casa Es Tu Casa” plaque for Americans is Lomas del Centenario, a 270-unit housing development rising on the outskirts of La Paz. In July 2003, Money magazine named La Paz one of eight great retirement destinations: “La Paz is more a Mexican city than an expatriate’s haven,” the magazine cautioned, “but for those who love magnificent seaside sunsets, sugary beaches, sailing, diving—and the ability to stretch a retirement dollar till it squeals—La Paz is a superb choice.”

I drove there one soggy August morning, dodging the remnants of Hurricane Dean, to meet Hector Raul Canseco Castro, the architect in charge of Lomas del Centenario and current president of El Colegio de Arquitectos (College of Architects) de Baja California Sur.

About 70% of foreigners living in metropolitan La Paz are from the U.S. and most of the rest are Canadian, Canseco said. His clients are not the super-rich but rather people of means in search of second homes in the $200,000 to $400,000 range who value the libertades—literally “liberties,” but more colloquially, “freedoms"—that a tourist-friendly Mexican state such as Baja California Sur can provide them.

What exactly does that mean, I asked while driving to a nearby expat community with Canseco and his personable young colleague, Mario Rubio Cota, a supervisor with Construcciones Masocco, which is developing Lomas del Centenario. Plenty of wide- open land, Rubio said. No meddlesome homeowners’ councils telling you what color to paint your house.

It was those kind of libertades, said Rubio, a La Paz native, that drew him back to his home state after several years working in L.A. and Denver. In Mexico, he explained, nobody yells at you if you want to play your stereo late at night or keep 10 dogs on your property. But at the same time, he and Canseco insisted, Lomas del Centenario complies fully with all the state and federal environmental regulations, and they have taken pains to preserve as much of the indigenous desert flora and fauna surrounding the development as possible.

We pulled up to one of the 50 or so existing homes, which resemble a New Urbanist version of a Mexican colonial-style house, complete with ornamental cupola and brightly painted in traditional Mexican colors. Wealthier buyers can add extras, such as a spare bedroom, a separate mother-in-law unit or a rooftop deck. The men offered to show me one of the larger models, belonging to an American couple who weren’t at home. Just as he was about to unlock the front door, Rubio paused. “It’s a funny thing about this couple,” he said. “He’s a Minuteman, but he’s retired in Mexico. It’s a very nice couple, everything that is the opposite of what the group represents. Very adaptive to the community.”

Gazing past the home’s swimming pool, toward the distant mountains that rise over the bay of La Paz, I pondered the idea that a member of the armed U.S. citizens group that patrols the border to prevent desperate Mexican illegals from crossing into the U.S. has opted to spend his golden years in the very same country those immigrants are trying to escape.

Rubio told me that the Minuteman and his wife speak a little Spanish and want to learn more. He said that they and other Americans are constantly asking for his perspective on the immigration debate that’s raging across the border. “That’s their mentality,” he said. “Adapt to the culture as opposed to having the culture adapt to them. And that’s the kind of thinking you find throughout with the Americans retiring in Mexico.”

Perhaps. But as Jack Smith suggested all those years ago, once the dam busts, cultural sensitivity gets swept up with everything else in the surging financial flood. That may not seem like a problem for the millions of Americans looking forward to spending the third stage of life whacking golf balls and sighing over romantic Cabo San Lucas sunsets. But even with the badly needed cash flowing from the north, it might be understandable if the Mexicans of Baja California Sur occasionally fantasize about building a wall of their own.