Construction started this fall on Cabo Riviera, a 900-acre resort and residential community on a five-mile strip of white-sand beach east of Los Cabos in Baja California.
Plans calls for two luxury hotels; a Mediterranean-style village with shops, restaurants, dozens of private homes and condominiums; a Pete Dye-designed golf course; and a 285-slip marina.
The setting is the East Cape of the Baja peninsula along the Sea of Cortes, about a 45-minute drive from Los Cabos Airport.
"The market is demanding a pristine and secluded luxury project on the Sea of Cortes at Los Cabos, and we are responding," said Gary Jacobs, one of Cabo Riviera's investment partners.
The setting is ideal for a low-density luxury resort because of its white-sand beaches, calm waters and fishing and boating opportunities, he said.
"This is a stretch of five miles of white-sand beaches where the waters are safe for swimming, unlike the waters at Cabo, where swimming is dangerous about 90% of the time because of the choppy waters of the Pacific Ocean," said Jacobs.
The East Cape area is sparsely populated, attracting sportfishermen, snorkelers and windsurfers. "It's in the heart of the best fishing and snorkeling in all of Baja," he said.
There is a small town, La Ribera, "a fisherman's village that is much like what Cabo was in 1971," said Jacobs, a banker who said he first saw the potential of Cabo tourism in the early 1970s, before there were paved roads, electricity or a commercial airport.
Developers want to retain the small-town, low-key atmosphere.
The planned community will feature a marina village with residences and commercial buildings built along narrow, cobblestone walkways with archways and an "Old World" atmosphere of St. Tropez, Portofino and St. Bart's, he said.
The development is a joint venture among several partners, including Grumar S.A., a Mexico City-based company headed by Mariano Mariscal, who developed high-end projects in Los Cabos and several other Mexican beach resorts. The U.S.-based partners include Jacobs, Hank Sames, Ben Barnes and James Sharp.
The group is not releasing the cost of their investment in the project.
This fall, sales of private home lots and construction of the first phase of the marina was started. Work on a five-star, beachfront hotel is expected to begin in the second quarter of 2009.
Jacobs said he and his partners have signed a letter of intent with a luxury hotel company but could not yet release its name.
In addition to the 150-room hotel, the company will manage 200 adjacent residences, all on 40 acres of beachfront land at the corner of the north jetty of the marina.
The master plan also calls for a second phase of construction that will include a four-star hotel and 11 man-made islands lined with private villas, each with their own private dock for personal watercraft. A total of 1,600 homes and hotel rooms are planned.
Jacobs said that despite the economic downturn, the investors see a great deal of long-term potential in the Cabo area for a high-end development because of its proximity to the U.S. and because the beauty of the area makes it a draw to fishermen and boaters.
The area is considered one of the top sportfishing destinations in the world and has long drawn fishermen, but growth has been hampered because of a lack of marina facilities, which required that charter and private fishing boats had to be moored off shore.