Carlos Slim Buys Struggling Mexico Development

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Mexico tourism officials have confirmed that billionaire Carlos Slim, one of the richest men in the world, has bought the Loreto Bay Resort, the struggling project on the Sea of Cortez.

Details of the transaction were not disclosed, but State Secretary of Tourism Ruben Lugo Reachi told reporters that Mr. Slim's company, Grupo Carso, would have the "necessary resources" to jump start the project.

The seller was Mexican home builder Homex, which has been going through its own struggles recently. The company posted a 10.1 billion peso ($796 million) loss for the second quarter, as sales slumped and the government switched subsidies from rural to urban areas.

Loreto Bay, which debuted in 2004, is an ambitious attempt to create a master-planned development targeting international buyers in a remote area of Baja California, north of La Paz. The Trust for Sustainable Development (TSD), working with Mexico's tourism agency Fonatur, planned to build a $3 billion residential resort with 6,000 homes, golf courses and hotels on 8,000 acres.

The development was billed as a model for sustainable projects, with the residential areas designed around new urbanism principles, with an emphasis on dense neighborhoods with walkable areas, organic farms and a large portion of the land set aside for a nature preserve.

The project attracted an investment from Citibank and international media attention. But in 2009 developer TSD Loreto informed owners that all operating and construction activities for Loreto Bay would be suspended "due to the challenging situation in the international real estate and financial markets."

"Several potential buyers and investors have visited the project over the last few months, yet in the context of the current economic crisis and credit shortage, the project has been unable to secure a buyer or new investor," the developer said.

Homex bought the project in 2010, including the hotel and land. But the market has been slow to recover and Homex confronted its own cash problems.

Mr. Slim is reportedly a frequent visitor to Loreto Bay, where he is known to park his yacht. His company is buying the Loreto Bay Golf Resort and Spa, undeveloped lots, and designated land marked for future development, according to media reports.