Edition: November 2007



 The Connection

 By Patrick Osio


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Where Is The Water?
Without it, Baja developments will die of thirst

A few years back, a real estate consultant sent me for comment a master plan for a Baja north coast development for which he was considering doing some work. The proposal looked first-class, but there was one significant omission. I returned the documents with a note asking, simply, “Where is the water?” I never heard back.

A couple of years later, while attending a real estate investment conference, I walked past exhibition booth spaces for various Baja developments, including one on the Baja north coast. It touted great homes and condos, a U.S.-administered hospital and even a medical school that would be academically tied to a U.S. medical school. Best of all, however, it seemed the developers had an answer for the water question.

The master plan showed a water reservoir of several hundred acres in size within the property. I asked the marketing director, “Where is the water for the reservoir coming from?”

The answer was a lulu: “The Mexican government has approved and allocated funds for a major desalination plant. There will be a plant near the shore, and the water then pumped into the reservoir at the rate of several million gallons a day. We have first call on it since it’s our land.”

That the Mexican government would do such a thing on private property would not be surprising if the owners of the land were relatives of the president or of the state governor or some other very big government official. But for an unknown U.S. real estate developer? Not very likely. Fortunately, potential buyers didn’t fall for the pitch and the developer retreated in due course.

Baja California’s cities, like those in California, have mostly been carved from the desert. Both gamble on finding water supplies to match their aggressive growth. But Baja is the poor cousin. Its rich cousin performs long-range planning and has first dibs on most of the water from a common source, the Colorado River. Other than that, Baja mostly depends on rain — a very spotty proposition these days.

In Baja, lack of funds plays an important role in what can or cannot be done. As long as water is not an immediate problem, the typical Baja administration in power ignores the issue. Since the last major rainfall of 2004-2005 filled the reservoirs and underground water tables — aided by Colorado River water piped from Mexicali to the Pacific Coast — not much thought has been given to future supplies. But a shortage is looming.

Ignoring the problem must end if Baja is to continue its economic growth and meet the vacation and retirement housing needs of the burgeoning baby boomers.

There is both good and bad news. The bad news is that Baja is in a drought. At the same time, the U.S. has won the right to cement the American Canal. That in turn will halt the seepage of Colorado River water into the water tables that run into the Mexicali valley, which historically have provided a significant percentage of agricultural irrigation and residential needs. The eventual loss of this water will set off a fight to lower the amount of water piped to the Pacific Coast, affecting the Tijuana, Rosarito and Ensenada municipalities that have enjoyed the excess supply.

The good news has multiple dynamics. In my opinion, awareness of the problem and commitment to long-term solutions is the most important.

The Baja north coast real estate boom giving birth to 67 projects with more than 18,000 units in various stages of planning or construction has brought together unprecedented unity and cooperation among U.S. and Mexican developers. They are urging immediate action by government.

A number of the developments have gone as far as contracting for desalination and water reclamation and treatment services for their individual projects.

Desalination and water treatment systems are making such treatments possible and affordable. Vince Chiofalo, a chemist and water systems design engineer and a principal with Acuario Mercantil, says the cost will be about $1,250 to $2,500 per home or condo, depending on the size of the project for both potable water and sewage treatment.

This cost is well within affordable parameters and likely ensures the continued long-term progress for much of the Baja boom. Hopefully this remedy will not be used by the incoming administrations as an excuse to once again ignore the overall problem. There is a growing population outside of resort enclaves that needs long-term solutions to its water needs.

Patrick Osio Jr. can be reached at posiojr@sandiegometro.com. The veteran consultant also has issued The Mexican Perspective, an intensive primer on business culture and protocol. Copies are available at hispanicvista.com/sales/book_sale.htm.


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