Puerto Penásco, Mexico: Boom Time for “Next San Diego”

As the last edge of sun slipped into the Sea of Cortez on a Saturday night in October, the Old Port corner of Puerto Peñasco, Mexico, kicked into high gear. Bunches of sunburned tourists rolled in, fresh from the beach, poring over vendors’ seashell necklaces and slipping into open-air cafes for fish tacos and margaritas. It was a classic seaside resort town scene: casual, small and quaint.

But peer west from the water’s edge, toward Puerto Peñasco’s extended arm, Sandy Beach, and you see a starkly different vista taking shape: a jagged wall of a dozen massive new condo-hotel resorts, in varying states of construction, rising toward the sky like a new Cancún. To the crowds of sun-loving tourists who are now flocking here from the United States, the development is a welcome new addition to Puerto Peñasco, or Rocky Point, as it’s called in English. The town – blessed with a surreal desert-meets-sea landscape, balmy year-round temperatures, English-speaking expatriates and an intact Old Port fishing village – has lured a mix of Arizona retirees and spring break revelers for years. Now, with its growing crop of new restaurants and upscale resorts that please middle-American tastes and budgets, Rocky Point is a draw to more vacationers.

“Every week, there are more visitors,” said Germán Palacio Jiménez, who runs the Point, Malecón Fundadores, 200, (entrées $10 to $14; all prices are in dollars), a year-old waterfront seafood spot. “We’ve had customers from Colorado, New Mexico – even New York.” Other new places offer everything from Mexican fusion to the European cafe fare of Coffee’s Haus, Boulevard Benito Juárez, 216B; (52-638) 388-1065. The most expensive meal is $7. Although the narrow beaches here are coarse and beige – more like New Jersey than the Yucatán – this is the closest shoreline to Arizona, just 225 miles from Phoenix. And the town, an hour south of the border, is in Mexico’s free zone so tourists from the United States need no special permits.

“This place is like the next San Diego, but with bigger bang for your buck,” said Mike Callaway, 48, a government employee from Tucson. He was sipping a Corona on a recent afternoon at the Sonoran Sun, where he paid $230 a night for his suite. The property is one of three new luxury Sonoran Resorts on Sandy Beach that are also hotels.
Real estate prices are still affordable compared with those of other beach resorts, making it relatively easy to snag a beachfront condo. The Sun’s rental manager, Roberto García, said that the 228 units sold out in seven hours last summer at an average of $300,000 each. That’s the typical price for a waterfront condo, with annual appreciation rates of about 25 percent in the last two years, said Brad Henderson, sales manager for Coldwell Banker.

Meanwhile, plans for Puerto Peñasco and its surrounding deserts continue to expand. There are more than 40 large-scale developments in construction or expansion, plus three new golf courses and six more due.

A small airport for charter flights now offered by Westwind Air Service (each flight is priced separately) reopened in September after a $2.5 million renovation; an international airport has a projected opening date of 2008. Also being built is a scenic coastal highway that will link Puerto Peñasco with cities to the north and south.

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