Saturday, July 30, 2011

Fiesta de Cortez Update: What's the Scoop?

This article about the Fiesta de Cortez in Puerto Penasco was recently published at Reprinted with permission

Something interesting is going on in dusty little Puerto Penasco (aka Rocky Point), up near the top of the Sea of Cortez just 60 miles south of the Arizona border. It involves Daniel Chavez Moran, founder of the Mayan Palace Resorts/Grupo Vidanta, and the Fiesta de Cortez resort.

A little history is required for this (grab a snack and put your feet up...). Way back in the early days of Chavez's empire what eventually became the Mayan Palace/Grupo Mayan/Grupo Vidanta was known as Grupo Vidafel.

It all started in 1974 with the Paraíso Mazatlán (Mazatlan Paradise), a resort located at the far north end of the Golden Zone in Mazatlán. This resort was a pioneer development for timeshare in México. Construction of a second resort named Paraíso del Mar (Sea Paradise), located on the same property, began in 1979. That resort opened its doors to the public on June 15th, 1980.

Grupo Vidafel (Vida Feliz, or Happy Life) began in 1984 with a resort named the Costa Brava Hotel which was built a few steps from the Paraíso del Mar. The resort's name was later changed to Vidafel Mazatlán. Today this resort is known as Sea Garden.

Then the group made a move into Puerto/Nuevo Vallarta, and began its massive expansion.

Got it so far?

Well, before Vidafel expanded to Vallarta, and before it began its Mayan Palace Resort in Acapulco (which was responsible for the name change to Grupo Mayan), Chavez opened a small resort in Puerto Penasco called the Fiesta de Cortez. He also purchased 25,000 acres about half an hour south of Puerto Penasco where he eventually built a Mayan Palace Resort-- he was always ahead of his time in his choice of locations.

That massive resort development, now called La Jolla de Cortes, has a Jack Nicklaus golf course and an international airport, and is also slated for luxury resorts, several real estate communities, lakes and canals interconnecting the Nicklaus Design and Greg Norman golf courses, five-star beach clubs and high-end retail, and more.

You can see the man thinks big.

Anyhow, sometime in the late 1980s or very early '90s, timeshare sales began at the Fiesta de Cortez. Though it never took off in a big way, that's where things first got interesting.

There had long been rumors that there was some kind of bad blood between Daniel Chavez and his brother Ignacio. Whether it's true or not I have no idea, but at some time around 2006 Ignacio ended up in control of the Fiesta de Cortez and the grapevine said it had something to do with a settlement between the brothers.

With the big real estate boom ongoing, Ignacio decided to renovate the property and add new condos. He obtained a condo regime designation from the state of Sonora, which authorized him to sell the individual condos.

At the same time that he was pre-selling full ownership condos, he was also selling 10-year right to use timeshare weeks at ridiculously low prices. Meanwhile, he had a contract with Mayan Palace to house their OPCs on the property.

Let me just say things didn't go well. It seems that Ignacio's son, Eduardo Chavez, had been selling timeshares and full ownership to Arizona residents (many of them elderly) at least as early as 2002-2003, using a rental pitch and promising a return on investment. But several of those people (one of whom spent a whopping $100,000 for a condo that was never built) never saw their title, one had his supposed purchase sold out from under him, and in all it was a huge mess.

In one case a couple was allegedly told by Eduardo they would own their condo free and clear and could sell it, likely making a tidy profit as real estate prices climbed. In addition, he asked for a loan to help pay for upgrades on the property, offering the penthouse as collateral.
The repayment terms, according to the contract signed and notarized in Tucson, were for 60 monthly payments beginning Dec. 15, 2003.
Subsequently, the penthouse was sold to a different investor and both the timeshare profit payments and the loan payments soon stopped. The Fiesta de Cortez was partially closed.

In 2007 Ignacio and FIESTA DE CORTEZ HOTEL URBANIZADORA VACACIONAL DE PUERTO PENASCO, S.A.,DE C.V. were served with a cease and desist from the Arizona Department of Real Estate. Among other things, the cease and desist said:

Mr. Chavez-Moran (owner of Fiesta) engaged in offering to sell, or advertise the selling of condominiums offered by Fiesta for a development known as Fiesta De Cortez Suites and Hotel Resort aka Fiesta Golden Resort (the "Property"). The "Property" is located in Puerto Penasco, Sonora, Mexico. Mr. Chavez-Moran failed to notify the Commissioner of the intent to sell condominiums or ever applying for a subdivision Public Report [A Public Report serves as license to a subdivider to sell and market (wherein disclosures are made) in order to protect the consumer.] with respect to the "Property". Further, he failed to file copies of advertising materials used in connection with sales of condominiums with the "Property."
Arizona Consumers who have filed complaints with the Department have lost approximately $378,318 earnest monies due to illegal activities of Mr. Chavez-Moran.
As the complaints piled up, Ignacio said that he was sorting through the contracts his son had written and promised that everything would be resolved. At least one of the people with such a contract subsequently filed a lawsuit in Arizona charging Chavez with breach of contract, consumer fraud and racketeering.

Shortly after the cease and desist was delivered, the Fiesta de Cortez corporation was dissolved, and Ignacio filed for a name change to Golden Hill Boutique Resort. That didn't help much, because by 2008 the whole global real estate market was in free fall, the economy was tanking and Puerto Penasco's boom was essentially over. Ignacio's hoped-for boom was over, too. The Fiesta de Cortez, which was already partly closed, stayed partly closed.

Fast forward to 2011: Whew! Word on the street is that Daniel Chavez Moran/Mayan Palace has taken control of the Fiesta de Cortez again (what IS it called these days?), and plans are reportedly being made to fix everything there (and boy oh boy do things need fixing!).

It is true that there are actually some satisfied condo owners at the property, and some of the original timeshare owners also make an appearance there. It is also true that besides the Fiesta de Cortez, the only other active timeshare property in the area is the Mayan Palace. (The planned ILX resort in the Las Conchas area never made it off the ground, and when Diamond Resorts Intl. bought ILX out of bankruptcy DRI declined to include that land parcel in the purchase).

So with both the Mayan Palace and the Fiesta de Cortez, Grupo Vidanta is the only timeshare game in town and probably will be for some time.

OPCs are still being housed on the property and there are rumors about new timeshare sales and/or using it as a hotel OPC location to book prospects out to the Mayan. What will Chavez do with the Fiesta de Cortez? That's what I'd like to know...


That's what I'd like to know, too. Has anyone taken a look at the place recently? Are there any signs of activity? Contact La Huerita at
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