Rocky Point

Rocky Point

Sunday, June 22, 2008

I HAVE CANCER AND THEY OFFERED US A TYLENOL

I HAVE CANCER AND THEY OFFERED US A TYLENOL.


     After waiting three long months, North Beach investors hoped Sonora officials would make good on their promises of March 5 to provide some viable solutions to the problems at North Beach. Instead, as one disappointed investor put it: "I have cancer and they offered us a Tylenol".

     A meeting was held at the Arizona Department of Real Estate on June 19, 2008 for the purpose of the Sonora government addressing serious problems brought to their attention at a previous meeting held on March 5, 2008. At that March 5 meeting, Sonora government officials were made aware of problems relating to North Beach including land fraud, and an on-going law suit, tying up millions of investor and developer dollars. The officials promised that, within three months, they would investigate and provide solutions to the investors at the June 19, 2008 meeting concerning the following North Beach properties:
                                       Las Gardenias, Kasitas, Sunset Beach (North Beach)
                                                                     Playa Azul
                                                                    Riviera Real
                                                                   Playa Dorado

     Four separate ½ hour meetings were arranged by the Arizona Department of Real Estate to be held with investors and Sonora officials, leading us to believe that individual properties and their problems would be addressed. Much to the disappointment of the approximately 75 investor attendees, the Sonora officials presented the same SONORA PROPOSAL shown below. No individual properties or problems were addressed! According to the Sonora officials, they allegedly conferred with their governor, developers, private business people, and Puerto Penasco officials to come up with this proposal designed to address all North Beach investors.

Below is the proposal submitted by the State of Sonora:

                                                   MEETING WITH NORTH BEACH INVESTORS

                                           LOCATION: ARIZONA DEPARTMENT OF REAL ESTATE

                                                           June 19, 2008  PHOENIX, AZ

                                                                 SONORA PROPOSAL:

OBJECTIVE: Offer North Beach property buyers an incentive program in which they could recover up to 100% of their down payment (made in North Beach), through credit incentives applied towards the acquisition on a new property in Puerto Penasco, without declining rights to the ongoing legal process.

INCENTIVE DESCRIPTION:

1) Agreement with Puerto Penasco Developers to offer the following incentives:
        a. LAS PALOMAS: 50% credit of down payments made in North Beach properties (Las Palomas) applied towards         the acquisition of a property of equal or greater value.
         b. BELLA SIRENAS: 50% credit down payments made in North Beach Properties (Bella Sirenas) applied towards the acquisition of a property of equal or greater value, limited to $50,000.

NOTE: Both developments currently have an Arizona Subdivision Disclosure Report (public report).

2) 100% exemption of closing and transaction costs.
              a. Registro Publico de la Propiedad (Property Tax)
              b. Traslado de Dominio (Transfer tax)
              c. Honorarios de Notarios Publicos (Public Notary fees)
              d. Avaluos (Appraisals)

NOTE: There will be nominal fees that apply in some instances, in such case, Sonora will absorb all costs.

3) Possibility of a capital loss tax write off in the United States for the investment Made in North Beach (please consult your accountant and/or tax advisor).

                                All transactions under this Program must be closed before August 31, 2009.

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     Not one attendee of this meeting found anything encouraging.  We asked people from each of the 4 developments involved what they thought, and all felt it was a complete waste of time. 

      Because each meeting was only ½ hour, of which the Sonora officials took 15 minutes, and because we had questions regarding the litigation, there was little time to fully digest the offer, but upon closer examination, the following points emerged:

     " Under the BEST of circumstances, the buyer loses ½ of his down payment and if he elects to purchase a property at Bella Sirena, the maximum he can be credited with $50,000.  In most cases, the down payments at both Las Palomas and Bella Sirena were in excess of $100,000.00.
     " Both of these developments are having such a difficult time selling their properties, that any "live" buyer could most likely get the same discount. 
     " Las Palomas has just raised its Homeowners Association fees to $850.00 per month. " As a result of this increase, it has been reported that claims have been filed for refunds in the amount of approximately $4 million by people who have met the refund criteria within their contracts with Las Palomas.  

Part 2 of the proposal would be considered a step in the right direction if anyone chose to take advantage of Part 1.

Part 3 is not an offer at all from Sonora.  Anyone can investigate the possibility of a tax write off and it has nothing to do with the Sonora government participation.

      We also came up with the following questions, which we will forward to the Real Estate Department, as well as to the Director of Tourism of Sonora:

     " Is there a limit of $50,000 credit on Las Palomas as there is on Bella Sirena?
     " In the unlikely event there is any interest on any buyer's part, how is the contract between the buyer and the developer, e.g.. Playa Azul affected?  As an example, if I purchased a unit at Playa Azul in the amount of $300,000 and gave a down payment of $150,000, I am credited with $75,000 towards purchase in Las Palomas.  But what happens to the developer of Playa Azul?  Is my contract with him still in effect?  And what position does this put the developer in?
    

     When confronted with the issue of fraud being perpetrated, their excuse was that they were part of the Executive branch and not the judicial branch and there was nothing they could do for those investors who lost $2.5 million dollars in the original North Beach development. They suggested that these investors file a criminal action against the perpetrators (Martin and Grijavla). It was pointed out that the criminal statute of limitations was long past and there was an on-going lawsuit (2.5 years). These very same perpetrators named in that lawsuit had not even been served summonses to appear in court, therefore how could defrauded investors serve summonses to these individuals responsible for the fraud. They basically shrugged.  Time after time, these officials made it clear that they were the Executive branch and could do absolutely nothing about fraud. When questioned why someone from the judicial branch was not in attendance, they again shrugged. It was made clear to them that members of the judicial branch should be in attendance at any further meeting between investors and the government.
     It became clear to the officials that the media was watching very closely as evidenced by ABC News15 interviewing investors at the conclusion of each meeting. We will continue to keep pressure on the Sonora government by actively seeking media involvement including national exposure to the problems associated with Mexican real estate investments.  
  

     The Sonora officials indicated that this proposal was a first step and several other measures were allegedly being addressed by the Sonora government that they could not disclose. They indicated that there would be other meetings with investors before years' end. They were reminded that the state of Sonora as well as Puerto Penasco will continue to lose many millions of dollars in tourism and real estate investment if these problems were not resolved quickly and fairly. Until then, we will continue to discourage any investment in Mexico.

7 comments:

  1. I think this offer is such a load of baloney that it is downright sad. At this point, exactly how many people want another place in Rocky Point? I own one that I am happy with but want nothing more than my money back (or even part of my money back) for North Beach and I intend to NEVER invest in another condo in Rocky Point due to this fiasco. What corruption!!! What balls!!! Thinking anyone would want half of their lost money to go into another project. Those Mexican officials should be downright ashamed to show their faces anywhere since this offer. How stupid do they think we all are??

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  2. Are there any California residents that have been burned in Sonora real estate? The State of California would like to hear from you because they don't believe what I tell them about what is happening in Sonora nor do they believe that Arizona officials are trying to help their constituents.
    Pedro

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  3. Please keep in mind that local realtors and real estate offices warned buyers against potential problems with the North Beach Area. Many buyers were simply amazed at such super low pricing and disregarded professional advice. This happens in Arizona frequently with developers. Please do not blame the country or the State. Blame the developers. Black/White/Brown Developers that do not deliver what they promised should be prosecuted. This is not a "Mexican" issue. Try to go after a Phoenix Builder's assets if the builder was under the protection of an LLC. Same issue. Different border.

    Gia Heller
    Licensed Realtor AZ
    Sonoran Sea, Spa, Sun & Sky Top Producer
    480 626 4698
    giadisalvatore72@aol.com

    Please feel free to write/email with your questions.

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  4. Gia, You have to know that many of the first investors at NorthBeach did not purchase from a "developer" They purchased directly from the Spanish and Mexican land owners. Because you are so versed in Mexican Real Estate why don't you tell us how to file suit against the original owners of the land and get them to court when the Mexican Government has been unable to accomplish this in 9 years

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  5. Gia, I wish your first sentence were true! The people who bought Las Gardenias lots, Sunset Beach lots and Kasitas in late 1999 and 2000 looked for help within the real estate community when it became apparent that we were victims of land fraud. Not one real estate “professional” would help us. In fact, we were told in no uncertain terms by one very prominent agent that she wouldn’t help us if she could because she was too busy selling other properties.
    And, as to the “professional advice” being disregarded, we listened to the real estate people who advised us that the worst thing to do would be to sue. Had we NOT listened to that, our group would have had a lien on our property BEFORE the filing of the lawsuit now affecting the whole of North Beach. Shame on us, but spare me the platitudes regarding your colleagues!
    As for the later developments, such as Azul and Riviera Real, the prices were not super low and in fact were in line with Las Palomas and Bella Sirena. As a matter of fact, at the June 19 meeting with the Sonoran officials and the Arizona Real Estate Department, the officials pointed out that they were offering a credit towards a purchase in Las Palomas and Bella Sirena because the prices were relatively the same as those developments the buyers had put money into.

    The fact is that the lawsuit, in place now for over 2-1/2 years precludes any permits, transfers, building, etc. And the Sonora government has done absolutely nothing to see that the Defendants are served and continue to give us Tylenol for our cancer.

    Anybody considering investing in Mexico, please take this advice: a bad investment in US real estate is far better than a “good” investment in Mexican real estate.

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  6. I am from Minnesota, and we will soon be "snowbrids." I heard Rocky Point was a wonderful place for a get-away for AZ residents and we are considering looking into a fractional or timeshare type of agreement. We have never even been there, but plan to visit the first week in Feb. Your blog certainly has caught my attention! Any advice you would like to forward to a complete novice in owning or even renting property in Rocky Point would be greatly appreciated!
    Mary Lou

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  7. help, who is the contact, i have some news for owners from a bad project, your website is down, you came to our AMPI meeting asking us agents to help, there is no contact button on your site, please contact me robin@mexicanbeachbum.com today is march 31 2014

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