Dispute raises questions about Arizonans' land investments in Sonora

The Arizona Republic

Arizona investors have poured tens of millions of dollars into beachfront homes, hotels and land in Puerto Peñasco, Mexico, only to see their cash swallowed up by developers who never built the projects.

The issue is raising questions about the security of property investments south of the border, and Arizona's two U.S. senators sent a letter of complaint to the Mexican ambassador.

The development in question, known as Playa Norte, or North Beach, lies at the end of a dirt road about 12 miles from Puerto Peñasco, or Rocky Point, in the state of Sonora. It has a projected value in the billions of dollars and covers 7,500 acres.

Scores of families and retirees have mortgaged homes or risked life savings for a piece of the Playa. A number of American developers also bought prime seaside land, planning to build and sell vacation homes to other Arizonans.

They all believed literature published by government agencies, including the Arizona-Mexico Commission, saying that Mexico's bank trust system safely ensures property rights to Americans. The system has certainly worked for thousands of U.S. citizens who bought Sonoran properties without problems.

But the Mexican developers at North Beach began raking in U.S. dollars in 1998, then hunkered down amid multiple lawsuits that have clouded title and blocked all construction.

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