Mexico Mega Resort Project: Risky Business for Investors and the Environment

LA PAZ, MEXICO - A proposed Baja California mega tourism project near the oldest and most important coral reef system in the entire American Pacific is a risky investment and threatens to undermine the local eco-tourism based economy, according to an investor risk advisory released today by Natural Resources Defense Council.

“Cabo Cortés is the wrong type of project, in the wrong place,” said Amanda Maxwell Latin America project director at NRDC. “Cabo Pulmo is a conservation success story on a local, national and international level, and scientists call it the world’s most robust marine reserve. Building a mega-resort in the area presents far too many risks and uncertainties for such a vulnerable – and valuable – natural ecosystem.”

A Mexican subsidiary of Spanish developer Hansa Urbana intends to build a large-scale tourism and real estate complex called Cabo Cortés in Mexico’s Baja California Peninsula near Cabo Pulmo National Marine Park, one of the healthiest coral reef systems in the world, and a UNESCO World Heritage Site and a Ramsar Wetlands of International Importance Site. 

The US$2 billion dollar proposed project would be comparable to Cancun and include lots for 15 hotels and other lodging, equivalent to about 30,000 rooms. It will also include two 27-hole golf courses, two million square feet of commercial and office space, a 490-slip marina on the Gulf of California, a private jet strip, and desalination and water treatment plants – all located on nearly 4,000 hectares.

According to NRDC’s investor risk analysis, Hansa Urban’s Cabo Cortés Project in Baja California Sur Investor Risk Advisory, the size and complexity of the project, coupled with the developer’s current financial situation, would require third-party investment in order for the company to make the Cabo Cortés proposal a reality. Yet, the viability of the project is threatened by significant risks, including serious environmental threats to critical conservation areas and several political, legal and market hurdles that make the project an unwise investment. 

Hansa Urbana is a risky corporate partner. In Spain some of its real estate development projects have been the subject of controversy and legal investigations, and its Mexican subsidiary submitted a grossly inadequate environmental assessment for Cabo Cortés, revealing the developer’s poor planning.  Environmental impacts the developer failed to properly address include toxic nutrient release from the golf courses, water pollution from marine dredging and construction and the project’s impact on the region’s already taxed water supply. 

Additionally, there are significant legal hurdles that have made this project politically controversial. Irregularities with the project’s environmental impact analysis and multiple legal challenges from members of the community and local organizations could delay the project’s operation for years, if not prevent it entirely. Moreover, a surplus of resorts already in the region presents a market risk.

“Tourism, especially coastal tourism, depends on a healthy environment to be viable over the long-term. What’s more travelers increasingly want their hotels and resorts to be environmentally responsible,” said Carolina Herrera Latin America advocate at NRDC. “Investors looking at the Cabo Cortés project need to know that it’s just far too risky a project that simply shouldn’t move forward.”   

Cabo Pulmo is home to a unique array of species, including endangered sea turtles, hundreds of reef fish, birds and marine mammals, and has become a major tourist draw and the centerpiece of the area’s economy. After irresponsible fishing practices that degraded the marine ecosystem, conservation efforts by the community and their transition to an economy based on eco-tourism has sparked the rebirth of Cabo Pulmo.

“There are many hotels, but there’s only one Cabo Pulmo,” said Meredith de la Garza, joint coordinator of the marine conservation program at Niparajá in Mexico. “Cabo Pulmo is a unique tourist attraction and protecting this vital marine park benefits not only the local community but the thousands of tourists who visit it every year.”

Local communities that changed the foundation of their economy from fishing to eco-tourism, remain opposed to any project that would threaten the park’s sensitive marine life. A development of the type and scale of Cabo Cortez would directly threaten the very natural elements that are a major tourism attraction for the region.

For a complete assessment of the risks associated with the proposed Cabo Cortés project, Hansa Urbana and CAM, see full report here:

http://www.nrdc.org/international/12051001.asp

Read OnEarth’s piece about Cabo Pulmo:

http://www.onearth.org/article/sea-of-wonders

To learn more about Cabo Pulmo:

http://switchboard.nrdc.org/blogs/cherrera/

http://switchboard.nrdc.org/blogs/amaxwell/