EL GOLFO DE SANTA CLARA, MEXICO – Glenn Taylor stands on the beach, feet buried in sand, watching pelicans dive into the blue waters of the Gulf of California.
“I can’t think of a more beautiful place,” the Yuma developer says.
The setting, a rustic fishing village about 90 minutes south of Yuma, is undeniably idyllic. And Taylor seems particularly proud of his vision for this sun-splashed shoreline: a resort hotel, golf course and about 600 ocean-view homes.
It would be a perfect marriage of American capital and Mexican real estate, he says, creating a $75 million development.
But, like many investors tempted south of the border, Taylor has seen his dream dashed by a legal battle over land. He’s been threatened by stick-wielding squatters, victimized by vandals, spurned by Mexican police, courts and politicians.
Taylor, 59, says the squatters represent Ejido Golfo de Santa Clara, a cooperative of local shrimp fishermen. Under Mexican land-reform programs, poor farmers and other workers throughout the nation were granted communal tracts of property for their homes and sustenance.
There are about 28,000 ejidos in Mexico today, controlling half of the nation’s land mass and most of its pristine beaches. Members do not own the land, but they have exclusive right to its use. They may sell the real estate only if they complete an elaborate legal process. As a result, foreign investors have had chronic problems related to communal lands, compounded by the fact that ejidos are politically potent.
Mexico tourism officials and real-estate promoters say that property investments are safe when done correctly and that only a handful of transactions turn out to be scandalous. Still, they admit, such controversies damage economies and reputations at the worst possible time – during a recession compounded by fears about border violence.
Taylor points to a vandalized RV on his beach, the only development after five years of futile dealings with politicians, police and courts.
“If there’s anyone to be held responsible, it’s the Mexican government,” he says. “They know what’s going on, and they won’t do anything about it.”
It began in 2004 when Taylor drove south looking for a Mexican beach house.
Instead of buying a casita, Taylor wound up forming an investment group, El Golfo Properties Inc., to buy 269 acres, much of it between the main street and the Gulf of California.
Taylor says the property, with an old restaurant and some bungalows, was appraised at $300,000. He negotiated for a year with Sergio Gutierrez Gomez Sr., an agent representing private landowners. The final deal: Gutierrez’s group was to get $100,000 up front, plus 20 percent of gross revenues.
A veteran developer, Taylor did not go into the purchase blindly. He obtained title insurance and put the land in a bank trust, following Mexican laws.
Surveyors, architects and landscapers were hired to design the resort. On Labor Day weekend in 2005, Taylor began posting development signs, only to be confronted by about 40 angry locals.
“They told me, ‘You’re going to take down these signs and stop what you’re doing, or we’ll do it for you,’ ” Taylor recalls. “I called police. They wouldn’t do anything.”
Silvia Terrazas, a Mexican real-estate consultant who successfully acquired ejido property near El Golfo, says purchasers often wind up with no land after making large down payments. “There are a lot of problems with ejido land,” she says. “There’s a lot of fraud.”
Ejido Golfo de Santa Clara has 20 members who never owned the nearly 2,000 acres of disputed seashore. Manuel Lopez, the group’s president, says his cooperative was cheated by the government in 1972 when boundaries were drawn, with the beachfront going to a neighborhood collective known as Colonia Melchor Ocampo.
Ejido members sued for possession of the land. The complaint bounced through Mexico’s justice system for 16 years before the Supreme Court ruled against ejido members in 1998.
Lopez contends the government is obliged to compensate ejidatarios for land they did not receive. Until that happens, he adds, members won’t allow anyone else to use the beach.
“We accept the court decision, but we’re still fighting it,” Lopez says. “Fishermen have a right to exist, too.”
Appeals to officials
Taylor decided to give up, figuring he could collect on his title insurance. But the insurance company rejected his claim because there is no dispute that Taylor owns the land – he just can’t do anything with it because of the ejidatarios.
Taylor and a neighboring U.S. landowner wrote letters to Mexico’s president as well as to countless other authorities on both sides of the border.
In summer 2007, Sonoran Gov. Eduardo Bours assigned a top aide, Oscar Lopez Vucovich, to resolve the El Golfo conflict.
Finally, in May, Vucovich proposed a solution: Taylor and other landowners would grant Vucovich authority to sell the entire beach, with proceeds being shared.
At the time, an 83-mile highway had just been completed linking El Golfo to Puerto Peñasco, dramatically increasing the value of real estate. Taylor says some of Mexico’s most powerful economic and political figures were vying to buy up the coast. Yet the proposed deal contained no guarantee that American owners would get a fair return.
Taylor says he rejected the proposal, only to have Vucovich obtain authorization from Gutierrez, who negotiated the sale of the property to Taylor and whose group no longer owned the land.
The pact acknowledged Colonia Melchor Ocampo as rightful owner of disputed lands but gave ejidatarios a third of the money when those properties were sold.
Taylor says there was just one problem: He did not agree to anything. “We’ve been in court ever since,” he adds.
Gutierrez could not be reached for comment.
Vucovich and Sonora’s tourism director did not respond to interview requests.
“It’s a black eye for Mexico,” says Mitch Creekmore, Taylor’s agent at Stewart Title Guaranty Co. “A pathetic situation.”
Taylor’s group has invested $850,000.
“There’s too much money in it to just walk away,” he says. So he tried again for a resolution, meeting with Lopez, the ejido president, who says that Taylor isn’t the first to buy the property only to be scared off.
Lopez explains how to persuade his members: “If you come with a dollar in front of you, that’s what they like. People want to know how much they’re going to get.”