By: Eduardo Vallejo Vazquez

As part of our informative work, we have been presenting interviews held with important figures on the economic scene of Puerto Peñasco in order to get their points of view concerning the current situation we are facing. On this occasion, we sat down with Engineer Fernando Anaya Millán, general director of Sonoran Resorts, who has contributed to tourism development of Puerto Peñasco through the construction and commercialization of two of the most important tourist complexes.

JoinUs: First of all, I’d like to thank you for your time in granting us this interview and secondly, get your perspective on the current crisis and that of investors who have bought condominiums from you.

Fernando Anaya: In the case of Sonoran Resorts, we finished the last of our projects about a year ago and delivered from November, 2007 to March, 2008, practically just as the economic crisis was being declared. Fortunately, we had already had sales prior to the crisis, though 2008 represented a slow time for sales. Well…slow because perhaps we were accustomed to growth here in Peñasco, with high demand and few offerings, a time when we were lucky enough to sell many condominiums in only a few hours. One could say that the “glory days” in Puerto Peñasco were about four years ago. However, last year it became a Peñasco where the prices began to alter and now it is a market that has gone through an adjustment; prices have moved in such a way that there is only room to grow from here on out.

JoinUs: When you mention this about adjustments, are you talking about lowering the price on condominiums?

Fernando Anaya: Precisely. Much of our competition has lowered their prices, the financial crisis obliges you to cover your fixed expense and continue with your investments. However, in not having sales obviously you are obliged to provide specials, propose discounts, make offers, lower interest, extend financing for down payments from one or two months to six months to a year. In our case, when I talk about adjustments this is not necessarily the direct lowering of prices; obviously, for every development this is the last thing we want, or what our clients that have already bought from us want. But at the same time, we have to make it easier to buy our products, make it more elastic. For example, these might include an offer of a better rate if you pay quicker, offering more time for the deposit if you’ll purchase, offering furnishings included in the condominium if you buy or if you purchase before a certain date. It’s not necessarily that I’m going to go down 50 thousand dollars or give a 20% discount, this would make the property acquire more value than the price itself. Our way of competing here in Peñasco is taking care of those that buy from us and those we’d like to buy from us; that’s why I say in the end, greater value over the price has caused a price adjustment on the market. If these same policies are continued during this, and perhaps next year, then there will be room to allow for growth in prices and therefore added value - perhaps not within the range of 10 to 12% annually as we experienced the year before last, but still a positive added value. Beginning in 2010 there will be value added growth, therefore this adjustment allows for the opportunity and convenience for those that are looking to acquire properties.

JoinUs: In this sense, for people who are interested in acquiring property, is there a guarantee concerning ownership of the land and regarding everything having to do with the procedures, or is the financing structured as it is in the U.S.?

Fernando Anaya: It’s definitely similar to that in the U.S. However, I believe it may be a little more entailed because in order to develop a project with the magnitude of Sonoran Resorts, many licenses and permits are required including those from the fire department, city hall, state government, civil protection, federal environmental protection office, etc. There are a tremendous number of rules and requirements that have to be met by the developer, assuring that the land has no liens on it, that it’s subdivided, and that there’s a condominium regime in place. Developers must present binders measuring up to a foot of paper, consisting of plans and official stamps from a variety of offices. It’s important that whoever comes here to buy be assured that whoever is selling has a sales permit and that they have the authorization agreement from the State. With these two requirements in place, the buyer can be assured the developer has all the papers, permits, deposits, and everything.

JoinUs: In order to guarantee that what the buyer receives is completely legal in all aspects?

Fernando Anaya: That’s right – solely by possessing the authorization agreement from the state government (buyers) can be sure (the developer) meets all requirements.

JoinUs: In looking at the market, what do you think about this year?

Fernando Anaya: I think it is adjusting, like a natural selection. As Darwin would say, the big and strong are going to survive and the weak are going to disappear, although the big ones are not necessarily the strong ones within this natural selection. Those that are able to adapt by lowering fixed expenses and increasing sales in order to remain profitable during 2009, well that’s who is going to be able to continue. There are projects that are on hold and this does not necessarily mean that their dead. One has to be more creative in order to get ahead. Much like in a time of drought, we’re going to have to hibernate and once the “rain” returns the area will once again flourish; this is what’s happening in Puerto Peñasco, we’re entering a phase of hibernation and when we see the necessary conditions on the market we will bloom once more.

JoinUs: With respect to safety, which is a theme that has been highly discussed with respect to the poor image that has been formed in the U.S., warning visitors about coming to Mexico, what do you think about this as you have been living in Puerto Peñasco for quite some time and selling condominiums to people from the U.S.?

Fernando Anaya: There are various points of view surrounding this theme, from the perspective of one looking in and that of one looking at the real situation. In particular, I’m referring to the U.S. news that points to a Peñasco along the lines of Juarez or Tijuana where there are problems with organized crime, conflicts between drug cartels, and fights between drug traffickers. In that case, it would seem that Peñasco is the same and truthfully this is not the case at all. From the inside, and after having lived here for many years, I can guarantee you that Peñasco does not have the problems of organized crimes or fighting between drug cartels nor shoot outs, nor any of that which unfortunately is occurring along different parts of the Mexican border. What is happening is nothing more than actions by the federal government in combating this, and unfortunately there is no other way to confront these issues. What problems are there in Peñasco? There’s a tourist that goes through a red light and instead of writing up a ticket, (the police) asks them for a bribe; these were the most serious problems of corruption in Puerto Peñasco from September to October last year. Yet, beginning in November and December, through the help of our Governor and following our requests, and I can say through my own personal request, they replaced the director of public safety with Captain Barranco. As of December, he has cleaned up and improved the department considerably, eliminating these types of problems

JoinUs: So really there aren’t any dangers here facing visitors?

Fernando Anaya: A week ago we met with various reporters from the Arizona Republic and some of the U.S. clients were saying things like, ‘I have a home in San Diego and I can’t let my children roam around the beach alone there but in Peñasco they can be alone on the beach without any problems, I consider Peñasco safer than San Diego,’ so what more of an example do we want?

JoinUs: Is there anything else you’d like to tell our readers?

Fernando Anaya: More than trying to convince them to buy, I’d like to invite them to come to see and learn. It’s different when someone tells you about the good or the bad without having the opportunity to come and really see for yourself. Come savor what Puerto Peñasco really is. It has impressive natural beauty, in no other area – or in few areas – do the desert and sea come together as they do here; very few areas offer the development of tourism infrastructure as we do here. Come stay as guests at any of the existing resorts, or even as investors; as visitors to the area they are going to have a great time, there are recreation areas, beaches, restaurants, and night clubs - as investors the recent price adjustments will allow them to buy inexpensively so that in the future they can sell for more and earn a profit. Obviously, it’s a good business all the way around. I once heard that millionaires are made by buying low and selling high, and right now Peñasco has very attractive prices.

By dzmdendro