Plaza el Ghosto Is Back!

Unfinished hotel on the marina front will soon be brought to life

Eduardo Sanchez Navarro, CEO of Grupo Questro, the largest tourist developer in Los Cabos, assured us the abandoned building that sits on the main drag of the Cabo marina will “shortly” be restored and a new resort will be open by the end of next year or early 2020. We say more likely “longly” and it’s about time.

PlazaElGosto.JPGHe also dodged the question of how much the Questro group will invest, but he did say, “we have an ambitious project that will remodel the surrounding area and will have a pretty trolley that will take passengers around the project and the Malecon.” He left the back door open for escape with the caveat, “if the process of authorization by the city advances smoothly.” The city is unlikely to say no to Sanchez Navarro, so this time it looks like a go.

The property has been abandoned since 1994 when the peso was suddenly devalued, and investment money evaporated. Work on the partially completed building was stopped and the lending bank foreclosed on the property. Banks in Mexico are different than banks in the United States. In the U.S., bank owned properties are treated like a hot potato and they get the unwanted properties off the books as quick as they can make it happen. It looks bad on the balance sheet. Not so in Mexico, where the banks are unwilling to take a loss, preferring to keep the defunct property on the books forever or until they can sell it at least break even.

As if that wasn’t bad enough for all of us who have to look at that eyesore, the developer left without making final payroll. So now the union stepped in demanding a chingo of money before releasing it. Mexican payroll goes on forever until finiquito is paid. That’s their final payment, which can be substantial if the employee has been there a while. That final balloon payment is Mexico’s version of unemployment: Mexican workers get their unemployment in one big bundle. What could go wrong there?

So back to the Plaza El Ghosto story. For many years the union fought the banks for control of the property. The union finally won at the supreme court level, but they were in no position to finish building it. Enter Grupo Questro, who bought it from the union. Next their engineers surveyed it to see if it needed to be torn down or if it’s still structurally sound, and that took most of a year.

Turns out it’s sound, and now construction is off to the races.

Of course it’s going to be timeshare. Most hotels here are timeshare, because that’s where the money is. Grupo Questro’s other downtown property is Casa Dorada and that’s a timeshare/hotel. ,