TWENTY kilometers (12 miles) south of Loreto, two-thirds of the way down the Baja California Peninsula, Mexico's National Trust Fund for Tourist Development (Fonatur) is busy creating a little Venice, complete with a charming network of canals and bridges. But Puerto Escondido, Fonatur's marine city, has some things the Italian Venice doesn't have: a marina for 500 boats, a new five-star hotel, one North America's best natural harbors, and sunshine year round.
Developed by private investors from France, the United States, and Mexico, in participation with Fonatur, the project is being planned by the same French architects who designed the successful Puerto Banu development in Marbella, Spain, now one of Europe's busiest yacht harbors.
Puerto Escondido will have a uniform Mediterranean style, combining private residences with hotels, condos, private docks, a golf course, and an airstrip, as well as the marina. Some canals and bridges are already completed and lots are for sale now. The plan calls for completion of the complex by 1990, and the condos will not go on the market until their construction begins.
The city is surrounded by unique land formations, part of the Sierra de la Giganta, a mountain range that resembles a series of giant heads dotted with walking-stick and candelabra cactus.
The closest large city is Loreto, setting for another Fonatur development. Loreto's mission, built in 1697, is a major sightseeing attraction in this dusty town, which resembles a 19th-century US frontier town, with old cars substituting for horses. A luxury hotel, the El Presidente, sits on the beach across from a tennis complex.
Created in 1974, Fonatur has financed the construction of more than 75,000 new rooms and the remodeling of more than 12,000 others in developing areas of Mexico. It has been involved in the development of such well-known resort areas as Canc'un, in Quintana Roo on the Caribbean coast, and Punta Ixtapa, in the state of Guerrero on the Pacific coast.
Mexico has stern laws intended to prevent any foreign takeover of Mexican land in so-called ``interdicted zones'' within 100 kilometers (62 miles) of the border or 50 kilometers of the coast. For a long time this virtually prevented foreigners from legally owning property and resulted in land being purchased through ``name lenders'' -- Mexican citizens who allowed property to be purchased in their names. This often resulted in fraud, since the foreigner had little legal recourse if he or she was cheated.
Since 1971 it has been possible for foreigners to purchase real estate in the interdicted zones, provided the purchase is made through trusts. These allow a foreigner to acquire the right to use the property for a 30-year period, with a Mexican bank acting as the fiduciary.
So Americans who wish to buy vacation homes in Mexico can now do so legally, though there is still a lot of paper work involved. And Fonatur's sales offices will help with that.