In a July 24, 2008 post, Mexico Law Blog questioned the viability of the ambitious 6,000-unit Loreto Bay tourist development project called Loreto Bay, located on around 8,000 acres adjacent to the hamlet of Loreto on the east coast of the Baja peninsula.  Although the project, particularly its goal of self-sustainability, is impressive, its timing is unfortunate.

The San Diego Times has reported that the project developer, TSD Loreto Partners, S. En C. por A. (”TSD“), has sold fewer than 800 units and suspended construction and operations.  The report also said that Fonatur, Mexico’s tourism development agency, was asking for “custody” of the project so that it could reopen a golf course and a hotel while TSD searches for a buyer.  The principal lender for the project is Citigroup Property Investors.  Whether TSD has breached its loan covenants is unknown, but highly probable. 

StarkSilverCreek.com reports that TSD is subject to a lawsuit in Arizona, in which Baja Developments, LLC, a New York limited liability company, alleges breach by TSD of a services agreement and seeks damages in excess of $7,000,000.  According to a detailed article about the Loreto Bay project in the Phoenix Business Journal, Baja Developments, LLC was a company formed by The Trust For Sustainable Development (note the “TSD” initials), a Canadian non-profit, federally chartered land and community development corporation, that arranged financing for the Loreto Bay project.

Starwood Hotels & Resorts (NYSE: HOT) announced on November 7, 2008 the debut of its St. Regis brand in Latin America with the opening of the St. Regis Punta Mita Resort, a joint venture between Starwood Hotels & Resorts and Ideurban Consultores, which constructed the project, according to a company press release. 

The resort is located in Bahia de Banderas, in the Riviera Nayarit, just north of Puerto Vallarta.

The land on which the resort is located is owned by Grupo 1818, S.A. de C.V., a company owned by a group of undisclosed Mexican real estate investors.

Hilton Hotels Corp. announced plans to build 60 hotels in Mexico over the next five years as part of its plan to quadruple its presence in Latin America and the Caribbean, according to a report in today’s El Financiero. 

Hilton currently owns 19 hotels in Mexico, which operate under various brands, including the Hampton Inn and Homewood Suites marques. 

Hilton was acquired by Blackstone Group in October 2007 for approximately US$26 million.