Grand Venetian Situation

Both local newspapers carried a story today about the ongoing legal battle that puts the Puerto Vallarta Hotel & Motel Association against the developer of the Grand Venetian and the past Vallarta mayor Gustavo Gonzalez. The association claims that the property on which GV is built was not zoned for condominiums but for hotels and that the permit was illegally given by the past mayor. This week their case, in its first reading, was won by the association. 

For those not aware of the Grand Venetian, this is a very large condominium development situated on the beach in what’s called the “Hotel Zone”, which stretches from the cruise ship docks to downtown Vallarta. It is located about halfway between downtown and the marina area. It has been controversial not only because of the zoning, but also because of its height at 24 floors. It established a precedent so there are now three other major condo developments in the region – Peninsula, Icon Vallarta and Tres Mares – all over 20 floors in height.

What’s this mean for the mayor and the developer? Well, it will most definitely be appealed, which can take place three times in Mexico – and this is just the first instance. A work stoppage order will most likely be issued, but the developer will come back with what’s called an “amparo”, that would allow him to continue building the project out while this case is in court.

But it doesn’t look good for Gonzalez. He issued this permit.

With regards to GV, that could prove very interesting. Not only is GV mostly built, it is mostly sold out to many individual condominium owners. Where does this put him if he has a permit from the municipality that says he can build condominiums here and to this height. Who is at fault here?

Perhaps they could settle this by turning GV into a “condo-hotel”, like the hotels found at many ski resort destinations. The developer hires a hotel operator, the owners of the condominiums would get a return on their investment by receiving a portion of the proceeds from the operation, and would also get a certain amount of time to use their condominium. For many, that could be a better deal than trying to rent it on their own. This would be fine if they bought it with the intention of renting it out, but if it was to live there full-time, that would be a problem. I would think though, that many, considering this size of the project, would be interested in renting, or a condo-hotel type operation. At least that’s one option. Going to be very interesting to see how this plays out.

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49 Responses to Grand Venetian Situation

  1. Joe says:

    John,

    Excellent website and insight into the real estate market in PV. Do you know or believe if the problems that plague GV are effecting the other condo developments in the hotel zone such as the Peninsula or Icon Vallarta? I would think that these developments should be hindered by similar permit problems since these developments are also in the hotel zone and are over 20 stories with 3 buildings in such a confined space. I have not seen any publications suggesting such problems with the zoning of these developments though. I did read an article about the Peninsula project that established a link between the developer and the family of Vincente Fox. Could this be a problem for the owners in this development? I’m not sure if the article was trying to suggest that Peninsula has been immune to the problems that plague GV because of the close relationship between the developer and the Fox family. I’m asking these questions as an interested buyer of a condo in either the Peninsula, Icon Vallarta, or Shangri-La developments.

    Thanks,
    Joe

  2. Joe says:

    John,

    Excellent website and insight on the real estate market in PV. Do you know if any of the problems that plague the Grand Venetian are also a problem for any of the other developments like the Peninsula or Icon Vallarta. I would think since both of these developments are located in the hotel zone and have 3 buildings in a confined space that are over 20 stories each, they might have many of the same permit and zoning issues. I read an article that linked the developer of the Peninsula to the family of Vincente Fox, but I’m not sure if the article was trying to imply that the Peninsula development has been unfairly immune to these problems so far because of this relationship. Do you know anything about this or similar problems or issues at other developments such as Peninsula, Icon Vallarta, Shangri-La, or Tres Mares. I am asking these questions as a potential buyer of a condo in one of these four developments.

    Thanks,
    Joe

  3. johnlifestyles says:

    As far as I know, this has been limited to GV. There are no pending lawsuits against the other projects in the area who have also built as high. I will look into this more however. It may be that GV set a precedent that allowed the others to then build that high. Shangri-la and Tres Mares are in a different zone, in Marina Vallarta, and there has been nothing brought up about them. One is built and sold out, the other well on its way.
    With regards to Peninsula and Icon, I have heard nothing against them. With regards to Fox’s involvement, I understand that it was the children of his wife, Martha, that are involved as investors.
    I have spoken to the president of the Hotel & Motel association recently about this, (he’s been very involved i the lawsuit) telling him that if their goal is to have GV torn down, this would be terrible for Vallarta, and not just for the real estate industry. He said he is well aware of this and they do have a back-up offer/ solution that could work well for all. That is good news to hear. Hopefully this can be settled amicably and soon.

  4. Joe says:

    Thanks for the information and please keep me informed via this forum if you hear anything more.

    Regards,
    Joe

  5. Tomas Hernandez says:

    More than a comment I have a question: as of this time (11/03/08), are any new developments on the GV case since the last post?

  6. johnlifestyles says:

    Sorry Tomas, nothing more to report at this time.

  7. joseph medeiros says:

    Hello John,

    I am an owner at Grand Venetian, having taken possession of .our unit back in February 2008. We have not been back to Puerto Vallarta since February. We are from Toronto. We just learned of the law suit against the developer through your weblog. Thank you for all the information you make available through your different websites They are all very valuable.
    John do you know if any owners at Grand Venetian have set up the BankTrust (fideicomisso) and do you recommend a Notary Public that we can use to do ours, as we have not done ours yet.
    What are the latest developments at Grand venetian with regards to the law suit?
    Please reply
    Thanks
    Joseph

  8. johnlifestyles says:

    There has been very little in the press or in the community with regards to Grand Venetian lately (I hope that is good news!). Information I have gotten in the past from people who are involved with the suit is that they are trying to come to some type of agreement outside of the suit, so the suit can be dropped. That’s what usually happens in these situations. After paying legal fees for a few years both sides get tired of it and end up settling. Hopefully that’s where they are at right now. With regards to which notary to use, being that I’m active working with all developments, agencies, real estate lawyers and notaries I don’t make recommendations to remain impartial. But with regards to finding a notary, Grand Venetian most likely have one that they have been working with for most of their closings, I would suggest you ask your sales representative there. A notary holds an impartial, non-biased position in this case, so its not like this would be working against you. They are just there to document the closing and make sure you receive your title, and in this case they would have all the information about the development. If you have some concern with regards to this, I would suggest talking to a real estate lawyer.

  9. Rich S says:

    Hello John,

    Thank you for this website. My wife & I purchased a preconstruction unit in the 3rd tower of the BGV in the spring of 2007. According to the association, 60 memebers of the association have met with Sr. Sacal(developer/owner) on 3-16-09 to discuss issues with BVG. The impression I got from the assocaition is that the law suit is being worked out and BVG is concentrating on completing tower #2000 and deliveries by end of May so they have the money to start on tower #3000. The goal is for tower #3000 to have the “superstructure” complleted by the end of 2009 and have the units completed by the summer of 2010. I predict it will take longer to complete tower#3000 but at least some positive news that “all is not lost”.

    • Steve says:

      Rich,

      Thank you for this update. How did you find out about the association meeting, or anything else that occurs there? We also purchased a preconstruction unit in the 3rd tower but it is so hard to find out any information on what is going on. I would imagine anybody who purchased a preconstruction unit is a bit nervous.

      • rich s says:

        Hello steve,

        this is Rich S from the puerto vallarta weblog. I am just checking in to see if you have recieved a letter from the developer demanding payment(possibly final payment) by the end of the month or the developer will cancel contract?

        If so, we need to find as many tower #3000 owners to join together and hire a lawyer from puerto vallarta to help us with this delimna.

        There has been a very recent post by another owner recieving a letter. I think there will be alot of people in a similar situation.

      • Steve says:

        Hi Rich. We were previously given an offer to upgrade to one of the finished towers so we took them up on that. It cost us more than we would have liked but we would rather have a finished unit now. The development is really nice and we try to spend as much time there as we can.

        About a month ago we only saw one person working in tower 3000. It will be some time for that tower to finish.

        Don’t know about your specific contracts but our contract did have some penalty clauses in it. I think the 21st clause allows a payment of 1% of the paid price for every six months of delay in the delivery of the unit. If the delivery is delayed for more than 12 months as of the originally agreed deliver day, the contract’s rescission and tital reimbursement of the price is available. Not sure what your contract had for the delivery date and if you have the same clauses. However, collecting from the developer on these clauses would not be easy. If you were behind in payments, they would probably claim that you have not met your terms and this clause is not enforceable.

        Another thing to try is to see if they can upgrade you to an unsold unit in one of the other towers. They were advertising some sale prices recently. You might want to phone sales department and see if they have any finished units for sale and see what the price is. Then after you have this info try to negotiate with the developer on an upgrade. If you had a one-bedroom unit, they don’t have any of these available in these towers. Don’t know if they have any two-bedrooms. Your advantage is getting a finished unit although it might cost more. Their advantage is they can collect some more of the money now and have another owner paying the association fees. This does not work for everybody and might not even be an option.

    • Lindsey/Gerry says:

      I hope this is going to Rich S. We are thinking of buying at the GV in Tower 3. We have just returned from 2 weeks in PV over Christmas and really like their development. Needless to say we are concerned about the litigation which we learned about on our return home but are wondering what you know about the status of the project. When did construction on Tower 3 begin and what time lines do you have on your possession? Do you have any other info on the litigation, is the project stalled, does the tower have to be dismantled etc.? We haven’t commited financially or signed on the dotted line yet but we would really like to buy in there however want to know all is proceeding. We’d appreciate your’s or anyone’s input.

      • johnlifestyles says:

        Rich got back with this:

        “Everything i have heard the lawsuit has been or will be taken care of. We signed 3 years ago. tower 1 & 2 have active associations so everything appears to be moving forward.”

  10. johnlifestyles says:

    Good news Rich, glad to hear this is working out, and thanks for posting to keep us informed. John

  11. Jovan says:

    The GV project will be finished, it is just taking longer than expected because of the law suits. You have to know that the Hotel Association is a heavy weight in Puerto Vallarta and runs all the local news. Just like any major power they are going to go after the condo development and make them compensate for building in their hotel zone. The lawsuit is them flexing their guns, and the situation will be settled outside of court. The 3rd tower will be completed, the Hotels will smile, the owners will smile, and all of Puerto Vallarta will smile. The owner will go away being more careful next time. BVG is an outstanding group who has built some of the top developments around. I don’t think there is much to worry about in the long run, just need some patience.

  12. johnlifestyles says:

    (This was posted earlier, but under “About John Youden”)

    My “expert and professional opinion”? Yikes. First a disclosure. Grand Venetian a clients of my company, the Vallarta Lifestyles Publishing Group and I also know the owner/developer quite well. That said…
    There has been ongoing litigation regarding the development. It has to do with what the original zoning was for the project and how high the developer could build. As it was zoned for hotel development, the H&M association wanted to see it continue to be so, as there is limited oceanfront space along this coastline. There had never, as well, been anything built to this height before, and that was challenged. Well, since then, multiple towers have gone up so that 20+ floors now seems to be the norm along this beach. Although the litigation has caused delays in construction, the delays have been overcome and construction has begun once again. And today there are two completed towers. From what I have heard, any differences of opinion on the project with the developer and the past municipal administration have been worked out with the new municipal administration that took power at the beginning of this year.
    The developer has built a number of projects in Vallarta (and throughout Mexico for that matter, although he started off here) and they have all been completed, owners have received their units, and they are projects that are well-known and continue to sell well as re-sales.
    As with any real estate development, in any location, Mexico and the USA or Canada, its always prudent to check out what existing owners have to say. I recently talked with one who said he was actually upgrading, getting a bigger unit at Grand Venetian, in one of the newer towers.
    Hey, its a great location, great views, and the developer has shown he can deliver over and over again…

  13. Steve says:

    When we were there last summer, we ran into multple people who already live in one of the towers and were buying more units for family. They were very happy there. The facilities look great. Tower 3 is probably at least a year off, maybe 18 months (in my opinion).

  14. Jean says:

    We stayed at the Grand Venetian in early Jan. and loved it. So much so tht we’ve bought a unit in Tower 1000! The unit is 1100 sq. ft. with a balcony at the front overlooking the ocean and one at the back looking out onto the Sierra Madre Mountains. Both balconies are huge. The gym is great with excellent equipment and four TV’s. The Spa is not open yet. Games room, TV room and Computer room are all well set up. There is free wireless internet that you can get in your unit and at those large gorgeous infinity pools. The location for this hotel is excellent -turn right and walk 50 min. to the charms of Veijo Vallarta or go left and walk 50 min. to Marina Vallarta. One has the old world charm the other is new and contemporary. Restaurants and bars are great whichever direction you go. Shoppin is awesome at the Liverpool store across from where the cruise ships come in. I could go on and on about this place. Love it!

    • Lindsey says:

      We really like the GV and are considering buying in Tower 3. Does anyone know if construction is underway again. There was nothing going on over Christmas and it was apparently to start up mid Jan. We are concerned the project will be on hold for quite some time yet and we don’t want to wait more than a year to take possession.

  15. Tom says:

    Hi
    We own in the Grand Venetian and as others we are very happy with our purchase but are looking to sell because of a family matter. Our 1br was mainly an investment and we have created a excellent rental history.
    The location is great and complex is wonderful.
    All our family has enjoyed stays at the Grand Venetian.
    The construction has been very slow as we have watched it all be built and the 3rd tower will be at least a year in my opinion. It will all get done but it is going to be awhile before all the grounds and buildings are completed but everything that is there already makes it a wonderful place. It is in Puerto Vallarta our favorite place.

    • Hugo says:

      What are you asking for your condo? what floor is it on, can you send me more info?
      we were there this past new years, we met a couple that own there, Paul & Sandra tower 1000
      300, they gave us a tour and we loved the place, we met mauricio (restarunt) we are intrested in buying, but we have to sell our home across the street in the new developemnet Fluvial,
      please let me know.
      Hugo 562.244.9020 California resident.

      • rich s says:

        I have a 1 br 1 bth with balcony front and mountain view back. 5th floor. Premiure location. I am thinking of selling. I want a 3br unit

  16. Jim says:

    Update to ya’ll
    Staying in PV for the last week…have direct line of sight of tower 3….work is starting every day around 9, going until 3pm….Saturday until about 12N…I’m no construction expert, but from my perspective, they are moving along at a good clip, I’ll count the floors in the morning and let you know where they’re at so far.

  17. Jim says:

    Jim here again.
    Back in NC now, but before I left I counted the floors on tower 3…they have poured the concrete on 10 and are laying the rebar for 11. There is a sizable crew arriving daily and keeping the crane operator busy….always a good sign.
    Best wishes to everyone.

  18. Tom says:

    Here is a link to a couple of pictures of the Grand Venetian. You can see the 3rd tower is moving along.
    http://www.skyscrapercity.com/showthread.php?t=188607&page=109

  19. J. Kielb says:

    Would anyone have any suggestions for 1 bedroom rentals in Tower 2000 with a balcony off of the bedroom? Thanks!

    • Tom says:

      We have a tower 1000 1br but if that will not work I can forward your email to our property manager. You can email from our website just click on my name.
      Thanks

  20. U. Harris says:

    We have a two bedroom condo in tower 1000 at the
    Grand Venetian. We are very happy with the development
    and the location is just great. I do hope tower 3000 is finished soon, but it will take a while longer. We are looking to sell our two bedroom condo because we would like to buy a three bedroom condo because we would like our family to visit us, that way we have plenty of space.

    • Hugo says:

      How much are you asking for your 2 bd condo?
      looking to buy, as soon as my house in Fluvial sells.

      Hugo
      562.244.9020

  21. Ursula Harris says:

    Hello Hugo

    Was out of the country, hence this late reply

    The condo is still for sale. If interested please give me a call tel. 847 272 1220
    or email ursula129@comcast.net

    Ursula

  22. sandi says:

    Hi,

    Can you tell us what is happening with the last tower of The Peninsula and GV, we heard that no title will ever be issued because building permit was not granted to both towers and is there a risk buying in those towers, to live, not to rent out? Apparently the new mayor is not accepting bribes.

    • johnlifestyles says:

      Ahh, that’s a good one, the new mayor is not accepting bribes!
      If a building permit was never granted, then title wouldn’t have been given to the first two towers. But these owners do have title. Some are for sale in the MLS and they don’t take properties unless they have title.
      Peninsula and GV seem to be in the process of getting this done. A slow down in sales has held back for both these towers from finishing the final steps in getting the condo regimen in place so title can be given. I’m having lunch with one of the developers next week; I’ll ask the question!

      • tom says:

        We own in the G.V. and no one has title yet. We are told by the H.O.A. that we can start the process and many have but no titles yet. You do get some papers but not title. The regime was filed and accepted but the tax authorities have not completed there part as well as a few other hurdles. So the authorities at this point are not willing to accept deeds. This has been going on for many months. It will happen but no one knows when. We all just enjoy our place in paradise. Tower 3 is moving along slowly and will be completed but it will be at least 6 more months.
        We are very happy with the location, grounds and everything. We are not full time residents but we know many and they are very happy.
        You can see the 3 tower in the back ground
        http://www.skyscrapercity.com/showthread.php?t=188607&page=125

  23. craig says:

    Looking to buy at the GV. The developer is selling one bedrooms in Tower 3 for 145,000 and up. Works out to 1600/sq m. Killer price for ocean front. It seems the developer is deep discounting remaining units to raise some capital. They want 80% down and remainder on completion in Dec,2011. After reading a bit about the goings on of the developement I am a bit gun shy. Anyone have any input on this ?

  24. Randy Lagasse says:

    We purchased in tower 3000 in 2007 as well. Paid 50% up front. Our contract wanted a further payment im November 2008 and final payment on completion in February 2008, on completion. We have witheld the final 2 payments due to the fact that they had barely started tower 3000 at that time. They are now harassing us to pay up the remainder in full as well as $9000 in late fees. Needless to say that we have hired a lawyer. I don’t know how they can expect us to pay 100% of the cost when there is no guarantee that this tower will even be finished in the next year. From what I understand the developer was a big player in Mexicana Airlines, and when we were there in Oct there was about 20 guys working on the tower and we were told that they needed $20,000,000 like yesterday. We really love the place and still want to purchase, but we are a little scared to throw good money after bad. If anyone else is going through the same problems, please comment.

    • rich s says:

      Hello Randy,

      I have just recieved a letter demanding payment by the end of the month or they will cancel my contract. I heard that the developer has sent this letter to everyone in tower #3000. I unfortunately paid 70% up front about 4 years ago. I just moved so I will need to go into storage to re-read my contract. I was told to read clause 5.b.1 of the contract in reponse to their letter demanding payment.

      I say we get as many people as we can from tower #3000 to threaten a law suit. I would like to possibly hire your lawyer, I have been given a name of a lawyer in puerto vallarta but the more owners from tower 3000 we can have with the same lawyer, the more powerfull we can be!

      Did the developer threaten to cancel your contract?

      We should all stand together on this!

      I have a contact in puerto vallarta who knows people in the asscoiation and tower #3000.

      Hope to hear from you soon.

  25. Randy Lagasse says:

    Rich,
    We have received the same letter regarding cancelling our contract at the end of the month. My partner in the condo is in PV right now and the lawwyer we have contacted is Connell and Associates. They have an office at the marina. They have a toll free number 1-866-425-0970. I would contact them right away and let them know you are having the same problem. Unfortuneately all the lawyers are away for Christmas, but the person he spoke to at the office spoke perfect english and she took all our info. Contact me by email at randyandlinda@shaw.ca. I would like to get your phone number, so we can discuss this. The more people that fight back the better.

  26. rich s says:

    To all grand venetian owners of tower 3000. The developer on December 22nd sent out a letter to all condo purchasers in tower 3000 demanding full payment.

    If you have recieved this letter please repond and I will contact you to give you your options.

    I & two others and more coming have retained a lawyer in Puerto Vallarta to challenge the developers action.

    Per the contract, the developer stated the number of units to be built in tower #3000. As most of us may be aware, the developer with out concent from owners of tower 3000 changed the layout by removing many two bedroom units and adding many 1 br units, thus reducing the other condos value. We believe this is not allowed per contract and that the devleloper may be in violation of the contract.

    This should help in our argument against the develoepr becuase he is threatning to cancel contracts that do not pay up! Can you believe this guy? He’s some piece of work..He’s over two years late with at least 1 year away from completion. Has not repsonded to most of us during this long ordeal, sends out a letter right before christmas and says pay up in 1o days or I will cancel your contract(what an ass____). I will not pay up and I am very confiedent most others will not also. We need as many people as we can to let this guy know enough is enough.

    I do hope he can come to his senses and find a way that is beneficial to everyone, including the developer himself.

    I guess we will see..

  27. rich s says:

    Any updates from anyone in regards to the demand payment letter? My last communication with BVG, I informed them that wouldn’y pay until condo is finished. I ahvn’t heard anything for about a month.

  28. Penny T says:

    Has anyone heard anything lately? We just go another email from Jaqueline Lara at BVG demanding payment. Is there a lawyer involved on our end? Can we all get together on this? We’ve paid 2/3 on tower 3.

  29. […] Grand Venetian Situation « Vallarta Real Estate Weblog […]

  30. any on selling tower 1?

  31. tom says:

    We have a 1br in tower 1000. Have a look at our website

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