Loreto Bay, a planned eco-friendly community in the Baja Sur California peninsula about 750 miles south of San Diego whose owners had visions of becoming a rival to Los Cabos, has hit a speed bump. TSD Loreto Partners, its development group, announced that all construction activity would be suspended as of June 6, and that Loreto Bay Resort -- home to a 155-room hotel and 18-hole golf course with views of the Sea of Cortez -- would close.Â
The cause, not surprisingly, is the stumbling economy. As this story in the San Diego Tribune explains, the development has sold fewer than 800 of its planned 6,000 lots, and its primary lender is Citigroup Property Investors, whose parent bank has been hit hard by the recession.
There is some good news: The story reports that Fonatur, the tourism development arm of the Mexican government, wants to take over and reopen the Loreto Bay Resort's hotel and golf course until a new buyer can be found.
"The golf course is an important attraction in Loreto, and its loss would be a great blow, from which this tourist destination would not easily recover," said Narciso AgÃºndez, governor of Baja California Sur.
Last year, in happier economic times, the New York Times profiled Loreto Bay, its history and its development plans, in a story you can read here.Â