Americans look to the next Baja boom town

Prices are not the only thing changing in Baja. The buyers are different too. Fifteen years ago, when Tijuana-based real estate agent Nicolas Renard started selling property in Baja, he says, "... it was just a few retirees. " But today, he sees younger and wealthier buyers. "They are looking to make a profit, and this is a clear opportunity," says Renard.

Arturo Rolland, a real estate agent based in San Diego, is seeing another trend - that of Mexican-Americans entering the market. It's a group with growing income, he says, that has not forgotten its roots. "They want to be back in Mexico, but not too far away from their families in the US."

Loreto was identified by FONATUR, Mexico's tourism development agency, more than 20 years ago as one of five prime tourism and investment destinations in Mexico, along with Cancún, Los Cabos, Ixtapa-Zihuatenejo, and Huatulco.

Infrastructure, including an international airport, was put up here in preparation for fast development. But, while those other destinations blossomed, Loreto was left behind - until Butterfield and his team entered the picture.

"Loreto is the most beautiful, the friendliest, and it's outside the hurricane belt. It was always supposed to be the best destination of them all," says Victor Manuel Castorena Davis, a member of Loreto's urban development commission "Many of us felt jealous of those places which did develop ... but we have learned from others' mistakes and we are now going to do it right." Loreto's time, he says, "has finally come."

Most Loretans say they are enthusiastic about the economic opportunities large scale development projects like Loreto Bay will bring to their region. After all, ten years ago Los Cabos was similarly a small town of 15,000. Today, it's a city of 160,000, with cinemas, shopping, much improved education and healthcare systems, and a per capita income of $17,000, compared to $6,000 nationally.

But others are wary of the downsides of such fast growth, and worry it will do everything from create traffic jams and sewage spills to deplete the clean water, overtax the police force, marginalize the local population, and generally ruin the tranquility and beauty that made the place attractive in the first place.

A group of professors at Harvard University's design school have even put together a report called "Loreto Alternative Futures" which warns of the ecological, visual, social, and economic risks posed by the Loreto Bay plan.

Rodolfo Palacois Castro, general director of budget in town, grew up in Cabo San Lucas. "We used to go to the beaches there with family," he says. "Now, they have all been privatized by the resorts. There is no room for us." The same thing, he worries, is about to happen to Loreto.

Sergio Morales Polo, president of a local ecological group says he is not opposed to the entire project, just to its scale. "What's wrong with 3,000 houses? With a nine-hole golf course? What about moderation?" he asks.

Butterfield, who is also president and founder of the Trust for Sustainable Development in Victoria, British Columbia, says he can understand some of these concerns, but promises his project will be different - responsible, creative, and attentive to the ecological and social needs of the place. He has hired a former director of Earth Day international as the project's full-time vice president for sustainability, and brought in several well-known environmentalists as consultants and in-house watchdogs. They are working on plans to renew natural estuaries here, and regenerate native mangrove forests so as to enhance the rich marine and bird life of Loreto. "We want to do 'good,'" says the developer.

Anne Thanhouser, a 52-year-old assets manager from Portland, Ore., came down to Loreto on a whim last year. Like the Butterfields, she too was looking for a dream home. She found it in lot 103. Her three-bedroom house will be ready, she is told, in two years. Meanwhile, she comes on visits: to get to know the beach, look at her plot and the floor plans, and get lightheaded with excitement all over again. "It's perfect," she says. "Its hard to believe what's happening here."

• Ms. Harman is Latin America bureau chief for the Monitor and USA Today.

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