Monday, February 7, 2011

Will Trump Bring Jobs to Puerto Penasco?

A lot has been written about Donald Trump Jr.'s December visit to Puerto Penasco, which has caused a great deal of excitement in all quarters.

If you hadn't heard about it, let me recap briefly. In early December Trump Jr., an executive vice president at The Trump Organization, made a business trip to Puerto Penasco along with Lawrence Glick (vice president of The Trump Organization), Jeremy Blackburn (CEO of Titan Atlas Manufacturing) and Camilo Benedetti (Yun Investment Fund Capital, an investment banker for the Trump Organization).

They spoke with the Mayor, tourism officials and private businessmen, flew over the area for an aerial view, waxed enthusiastic about investment opportunities, had a great time and then went to Hermosillo to talk to Governor Guillermo Padrés Elías. A posting from Trump about the trip landed on Twitter over the weekend: “Most amazing weekend in a while in Mexico,” he wrote. “Biz trip turned weekend at a new friend’s ranch. Just awesome time in the desert.”

At the end of it all, Mr. Benedetti said they are very interested in financing infrastructure such as roads, ports and aqueducts, as well as tourism and housing developments, and that public projects could begin sometime this year.

It is possible that project specifics could be made public as soon as this spring.

That all sounds as if they are serious about investing in Puerto Penasco, which of course would be a good thing if it comes to pass.

Most of the attention to this news has involved speculation on what the Trump Organization's possible investment might mean to the real estate/tourism industry.

I'm more interested in a slightly different aspect of the affair, something mentioned almost in passing by most of the gringo media but of major importance if it comes to pass. That something is related to building and improving infrastructure, such as roads, ports, aqueducts, bridges and so on, as well as low income housing.

To my mind, this is at least as important as the building of resorts/hotels/condos for tourists because it means jobs for local workers and, as Sonora's Governor and Puerto Penasco's Mayor have mentioned, it would also provide financial stability to the community as the US economy begins to improve and vacationers/home buyers begin to find their way back to the area.

And these jobs would not only be longer term, they could be present throughout other areas in the state of Sonora. And of course visitors will also benefit from the improved infrastructure, so it's a win-win situation.

Governor Padres has said he wants to explore other vocations in Puerto Penasco, that he wants investment in building to generate some employment.

José Inés Palafox, Secretary of Infrastructure and Urban Development, has acknowledged that there is a significant investment of an individual who wants to create low- medium and high-income housing, though he did not say who that individual is. He says such investment will "inject movement in the State" as well as improve infrastructure in the downtown area of Penasco, as is currently occurring in the Malecon/Old Port, and all of that will help maintain credibility and trust and calm investors.

They are clearly looking at a revitalization of the economy through infrastructure construction, a solid idea that does not depend solely on tourism for the provision of jobs.

As regular readers of The Tides know, I've long been an advocate of responsible development in Puerto Penasco, starting with a proper infrastructure that could support a growing visitor/resident base. (See A Cautionary Tale of Two Cities for example, or Improving the Infrastructure of Puerto Penasco.) The past city administration started the city along that road, and the present administration under Mayor Zepeda has continued it, and I applaud them for it. But there is a limit to the funding available for those projects, especially since the collapse of tourism and real estate development taxes in the area put a big bite on the city's coffers.

There's a lot that needs to be done: Water, roads, electricity, proper planning for neighborhoods, beautification and on and on. With solid funding available in a private/public partnership to address those issues, plus a gradual resurgence of American and Canadian tourism, Puerto Penasco can thrive again-- for the long term.

And of course, with several defunct or drowsing resort projects on the market for pennies on the dollar, I'd expect Trump to be looking at some of those as well. One can only hope that attention would also be paid to environmental issues in the fragile ecosystem we inhabit, which is not a trait that the senior Trump has been famous for if I may speak frankly.

So I'm cautiously optimistic about the whole thing. A rising tide floats all boats, and all that. But I urge against over-excitement at this stage, or listening too intently to the unrealistic real estate euphoria that already seems to be bubbling up again. "Invest now! Rocky Point is the next Cancun/Cabo/Vallarta! Don't miss out!" Etc. I believe Rocky Point's resurgence will be gradual and will take several years.

So when you hear promotions that sound a bit over the top to you, just keep in mind that old Italian proverb: "The braying of an ass does not reach Heaven..."
Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover. -Mark Twain